MN 3052 - INDUSTRIAL MANAGEMENT AND MARKETING

GROUP ASSIGNMENT

GROUP MEMBERS
CONTENTS

Critical Justification of the Company Selection 3

Key Change Identified and Analyzed 4

Impact to the Organization. 5

Impact to the Staff.. 6

Impact to the Customers. 7

Relevant Theories and facts to Support.. 7

Lewins three stage model of change. 7

Change Curve. 9

Alternatives or Improvements in Handling the Impact. 10

References. 11

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Critical Justification of the Company Selection

Dialog Axiata PLC is a leading telecommunication services provider in Sri Lanka and a
subsidiary of Axiata Group Berhad. The Axiata group is one of the largest Asian
telecommunication companies, focused in high growth low penetration emerging markets.
Dialog is the current market leader of the mobile telephony industry in Sri Lanka with 50%
market share. The current subscriber base exceeds 10.9 million and its telecommunications
infrastructure spans all provinces of the country extending 2.5G and 3/3.5G Mobile
Communications networks supporting the very latest in multimedia and mobile Internet services.
The Company also holds the distinction of becoming the first service provider in South Asia to
launch mobile 4G FDD-LTE services and provides international roaming facilities in over 200
destinations.

Dialog continuously seeks new ventures to expand its business and market. It is not
limited to retail and wholesale voice and data service. Following the vision, Dialog has entered
and operates vigorously in the area of e-commerce facilitating its customers with the first ever
mobile payment capability in Sri Lanka. The slogan The Future. Today. can be identified as
the main driving force behind the technological advancement since the commencement of
operation. At present close to 3,000 employees from all over the country are working towards
this common vision.

Dialog led by the visionary leader Dr. Hans Wijesuriya since 1994, has achieved and
continues to achieve immense success each year. Over the years Dialog is decorated with a wide
array of local and international awards including but not limited to the National Quality Award,
Sri Lankas Business Excellence Award and 3 successive GSM World Awards. Winning the
SLIM-Nielsen peoples award for Best telecom service provider in three consecutive years is a
great example to express the strength of the mobile SBU.

The vision statement of the company explains why Dialog pursues activities to thrive in
the industry and mission statement of the company details its resources and capabilities and the
intention of its business.

Vision Statement - To be the undisputed leader in the provision of multi-sensory connectivity

resulting always, in the empowerment and enrichment of Sri Lankan lives and enterprises.

Mission Statement - To lead in the provision of technology enabled connectivity touching

multiple human sensors and faculties, through committed adherence to customer-driven,
responsive and flexible business processes, and through the delivery of quality service and
leading edge technology unparalleled by any other, spurred by an empowered set of dedicated

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individuals who are driven by an irrepressible desire to work as one towards a common goal in
the truest sense of the team spirit.

The Dialog group consisting of mobile, international, television and fixed line recorded
consolidated revenue of 73.9 billion for the financial year 2015. The recent operational
improvements have also contributed to a year on year growth in Earnings before Interest, Tax,
Depreciation and Amortization (EBITDA) of 14% which accounted for 23.8 billion for the year
2015.

Key Change Identified and Analyzed

Sri Lankan telecommunication industry had to pay one of the highest taxes as a
percentage of revenue among Asia-Pacific Telecom industry due to the interim budget proposals
enforced from 1st of April 2015. SLT and Dialog had to pay about 28% and 36% of their
respective 2015 revenue in taxes and levies respectively, which was only 12% and 17% in the
previous year. Thereby Dialog group was liable to pay a total of 27.6Bn to the government of Sri
Lanka in the form of taxes and levies during the financial year of 2015. From this total 12.7Bn
were direct tax by the group including income tax and 14.9Bn were consumption taxes. This is a
14.4% increment in direct taxes compared to the previous year. Even under these recurring taxes
on the sector, company was able to earn a Net profit after tax of 5.1 billion.

The company faced a challenge of making more revenue to cope with the new tax
policies to minimize their profit reduction in financial year 2015. They choose to do this by
improving the quality and performance of the service to attract more and more subscribers to the
network which will provide a direct revenue boost. The management decided to alter the
department structure in order to increase the efficiency of the technology team to give quality
service to the consumer. Planning and operation department was separated into two separate
sections named as Dialog planning and Dialog operation. Engineers got more often distracted
with operational issues when they possess both planning and operational works, so less focus for
planning, innovation and improvement. This was almost stopped with the introduction of new
restructuring procedure. Not only that, new service departments were introduced under the group
chief technology officer as Dialog network services, Group technical delivery and Technical
support services to assist the technology team (figure 01). They also focused on minimizing the
operating cost with the separation of operation and planning division.

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 Network services division handle operational tasks of different regions which are
separated as Western central, Central, North and North central, Eastern, Western south, Southern
and Uva, Western north and North western.

Technical delivery will handle effectiveness and risk management of projects and
processes, Budgeting, performance management, skill management and training of technical
employees. It plays a Human Resource and financial role for technical projects.

Technical support services provide field support services for projects and regions. They
do site survey and acquisition and also quality assurance is part of this division. Technical
support centers also operate under this department. They perform device and equipment testing
and repairs.

These newly created service departments help to increase the performance of the Dialog
planning and Dialog Operation departments.

Figure 01: New Department Structure

Impact to the Organization

Separation of the operation and planning division has improved the overall efficiency as both
planning and operation can create more focus on specific areas through dedicated staff. With
more freedom they obtained through the reconstruction portfolio, planning staff identified
several options to increase their other income methods.

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 Dialogs internationally acclaimed Mobile Money Service eZ Cash, started in operating
with Etisalat and Hutch which made the subscriber base to exceed 2.2Mn. They also enabled
receipt of Foreign Direct Remittances for the service. Mobile consumers transacted a total of
Rs.11.9Bn over the eZ Cash network during the course of 2015. Dialog further expanded its
portfolio of Near Field Communications (NFC) based Cashless Transportation Ticketing
Services to include the facilitation of cashless payments via eZ Cash.

With the improvements their Digital Financial Services achieved performance milestones in
the year 2015. Their mobile based micro insurance has recorded higher growth during the year
and WoW.lk continued to lead Sri Lankas Digital Commerce market as Sri Lankas best
performing digital market place.

Operation division has established new sophisticated technologies to improve the quality of
the service to the customer. Therefore they were able to increase the number of subscribers of the
company which led to a revenue increment. The emerging segments of the group, Mobile
Broadband, Fixed Services, Pay Television Services and Digital Services has contributed
significantly to the overall growth profile delivering growth rates of 63%, 14%, 23%, and 105%
respectively. Some major operational performance increase is responsible for such growth which
was established by the more effective operation division.

With all the changes and improvements made, they succeeded in achieving revenue of
73.9Bn in financial year 2015 which was a 10% growth with respect to the previous year. This
growth helped them to create a group profit of Rs. 5.2Bn. This profit was 15% lower than the
previous year which was happened because of the taxes as well as the devaluation of the Sri
Lankan Rupee (SLR) by 9.2% relative to the US Dollar (USD) causing foreign exchange losses.
The company has succeeded in minimizing the impact to the profit due to imposed taxes by
carrying out the reconstruction of the staff.

Impact to the Staff

The restructuring procedure had some major impact on the staff. They were used to perform
both planning and operation activities during their work. With the new structure some of the
staff had to focus on operation activities and others had to focus on planning procedures.
Operation staff had to work even during night shifts and is rewarded with operational
allowances. But they may find themselves more stressed than the planning staff while planning
staff can become bored because they were used to do operational stuffs before the restructuring.

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At the initiation some resistance was shown by the staff against the restructuring due to the slight
differentiation of salaries between planning and operation sections.

Impact to the Customers

Customers get the benefit of improved services due to the restructuring. Customers were able
to purchase new packages at competitive rates in the process of company trying to increase the
subscribers. With the help of new operation division customers were able to experience reduced
process delays when receiving services.

Relevant Theories and facts to Support

Lewins three stage model of change

Lewins three stage model of change was originally presented on 1947 by Kurt Lewin.
Many of modern change models were developed based on this three stage model. Lewins model
describes the organization change using the analogy of the changing shape of a block of ice. The
model consists of three stages namely unfreeze, change and refreeze.

Unfreeze

The unfreezing stage is about getting ready for the change. It involves preparing the
organization to accept the change is necessary and motivating the organization towards the
change. Unfreeze stage also include following facts.

Define the drawbacks of existing method

Introducing new method of operating
Challenge the organizational values, attitudes, beliefs and behaviors

Change

In Lewins three stages model the change is not taken as an event. It is considered as a
process. This process is called as a transition. The change stage occurs when organization make
changes which are needed. In change stage following things will take place.

Find new ways to do things

Employees start to act and believe in ways that support the new direction

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 Employees take time to get used to the change
They need to understand the benefits of the change
Refreeze

The third stage is refreezing. As the name implies this stage involves with the establishing of
the stability once the changes have been made. Refreeze stage consist of the following things
too.

Changes start to happen and people get used to the new way of working
Introduction of new organizational chart and consistent job descriptions
Stabilizing and solidifying the new state after the change within the organization
Acknowledgement of peoples efforts reinforces their belief in future changes

Unfreezing

Define the drawbacks of existing method

In existing system operation and planning perform under a single section. Therefore, the
efficiency and the quality of service have been reduced. As a result of the tax imposed by the
government on 1st of April 2015, there is a risk of reducing the total profit of the organization at
the end of the 2015 in a considerable amount. In order to minimizing the reduction of profit it is
essential to increase the internal efficiency and seek for other financial incomes.
Introducing new method of operating
A new method is proposed to divide the existing operation and planning department into two
sections namely operation department and planning department.
Challenge the organizational values, attitudes, beliefs and behaviors

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Change Curve
The change curve is introduced in the 1960s by Elisabeth Kbler-Ross. The Change Curve can
be used to understand the stages of personal transition and organizational change. Using this
model an organization can predict how the employees will react to change. Following diagram
shows the stages of the change curve and the reaction of the employees to the changes.

The organization can use the knowledge of the Change Curve in order to plan to minimize the
negative impacts of the change and help employees to adapt more quickly to it. The change
curve consists of mainly three stages. They can be explained as follows.

Stage 1- Shock and denial

The stage 1 describes about the reaction to the change. Usually it is a shock or in denial.
The shock can be happened due to the following reasons.
Lack of information
Fear of unknown
Fear of doing something wrong.
The shock leads to temporary reduction of productivity.

Stage 2-Anger and depression

The feeling of shock and denial may often leads to anger and depression. Due to this overall
performance of the organization may reduce as the employees may tend continue the usual
behavior which is inappropriate to the new method.

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Alternatives or Improvements in Handling the Impact

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REFERENCES
[1] Annual Report 2014 - Dialog Axiata PLC

[2] Annual Report 2015 - Dialog Axiata PLC

[3] New taxes on Lankan telcos negative for the industry, Fitch says, The Sunday Times,
http://www.sundaytimes.lk/150308/business-times/new-taxes-on-lankan-telcos-negative-for-the-industry-fitch-says-
138689.html

[4] Change Management Theories and Methodologies, Fabia McLean Bourda, Tata Consultancy Services

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