At&T Consumer Product

Objective/Scope

The key requirement of this case is measuring factors of overseas manufacturing strategy, including corporation culture, local environment and culture (United States, Asia, or Mexico), company's and an executive's responsibilities and other aspects of locating plant for telephone answering machines in different places. By analyzing such implemented policies, we may have a general realization of making decisions about pay, benefits, bribery, gender-based hiring, waste disposal, and operating influence in developing countries.

Recommendation

According to the general consideration and analysis, it is best for AT&T to build its telephone answering machine plant in Mexico.

* Lowest Labor Costs

* This is a constant theme throughout the case

* Need to adapt to the new competitive telephone consumer products and stay competitive

* New competition due to several factors – mainly due to creation of the Federal Communications Commission (FCC)

Analysis

When considering A&T’s culture during the late 1980’s, specifically post divestiture, things were constantly changing. AT&T had been the world’s largest corporation with over $150 billion dollars in assets. AT&T basically had a monopoly in the market for telephone equipment and long distance service. However, with the introduction of the Federal Communications Commission in 1934, whose goal was to regulate the telephone industry, AT&T’s monopoly was about to end.

This all began with the Carterfone decision in 1968. Up until this point, all telephone sets were owned by the telephone companies and leased to the end user. Most telephone equipment at the time was manufactured by Western Electric, with whom AT&T had recently bought a controlling interest in. AT&T had refused to let non-AT&T devices connect to the AT&T system, specifically the Carterfone. AT&T’s argument was that connecting a non-AT&T device to the AT&T network could harm the health of the overall system. The FCC...