Restructuring / Turnaround Strategies Case Study

Case Title:

Alcatel-Lucent: Can the New Leadership Turn it Around?

Abstract:
French firm Alcatel and American company Lucent Technologies, leading global telecommunications equipment players, merged in November 2006 to form Alcatel-Lucent. This was the first merger of a major US based networking hardware company with a non-American company. Headquartered in Paris, the merged entity faced major problems such as internal clashes, cultural integration and the fear of job cuts which severely affected employee morale and productivity. The company did not realise the expected benefits and synergies of the merger. In July 2008, the company announced that CEO Patricia Russo and Chairman Serge Tchuruk would step down following losses in six consecutive quarters. Industry veteran and Dutch national Ben Verwaayen was appointed the new CEO and the French businessman Philippe Camus was made the non-executive Chairman in September 2008. The case helps to analyse whether the new bosses of Alcatel-Lucent, with the help of a new support team, could turnaround the company and make it profitable. The case also helps to understand the issues involved in turning around transborder multinational companies.

Pedagogical Objectives:

• To analyse integration issues in transborder mergers and acquisitions
• To analyse the problems faced in the context of Alcatel-Lucent's post merger scenario
• To analyse the turnaround plans of the new bosses to fix the merger.
• To analyse whether the new bosses of Alcatel-Lucent can turnaround the company and make it profitable.

Keywords : Alcatel, Lucent, Turnaround, Restructuring, Transformation, Ben Verwaayen, Philippe Camus, New leadership, Cultural clashes, CDMA (code division multiple access), Profitable, Competition, Sony Ericsson, Huawei Technologies