The name that to many Anglophones is an example of the failings of French management and to others a shining example of a world. 

But what lies beneath?

 

THE GOOD

Orange is a French multinational corporation working in the telecommunications sector.

By 2007 they had 121 million customers. By 2011 they had 226 million customers. As of 2013 they had 231.5 million subscribers  (Orange.com (2013-08-09).)

  Depending on criteria chosen they are in the top 10 telecoms providers in the world. It provides mobile phone, landline, IP and IP television services to name but a few and carries an AA+ credit rating.

    In 2005, it was the first operator to offer a national broadband network for mobile phones.

   The birth of this huge company began in August 2000 when France Telecom purchased Orange plc for an estimated cost of nearly €40 billion from telecoms giant Vodafone. The mobile operations of Orange and France Telecom were merged creating a new group known as Orange SA. 

   In 2006, France Telecom rebranded their internet operator Wanadoo to Orange and there followed a decisive and vigorous strategy of restructuring their business model for a more mobile centric operation.

  Orange was recognized this year as one of the world’s top telecoms giants and was ranked 7 in the most valuable telecoms brands with a brand value of $16,342. brandirectory.com/league_tables/table/telecoms-500-2013

  As of the 1st of July, 2013 shareholders voted to brand the company ‘Orange’.Marketing wise the company is seen as a success. It is established in France as the main brand for mobile, internet and TV services and recently announced full 4g access for all of Paris. Orange is a steady, if not spectacular player, on the stock market.

 

THE BAD

Orange (and France Telecom) have a distinct issue when providing services in France...customer service.

   This is an Anglophone publication so I will only quote Anglophone situations for you: From the customer who paid for their line for 5 months whilst adamant that the phone didn’t work, only to find that Orange had not connected the property to the exchange (and sent 2 engineers to the house), to the client who had their phone cut off by Orange (actually a third party) and Orange offered compensation and then withdrew the offer to a line activation taking 37 days when the line already existed.

 The fact is that with an organisation as large as Orange you have to get the basics right. Get it wrong and everything frays.

   Due to the ownership by the government of France Telecom the management missed the dot.com options on buying competitors. When they purchased Orange they paid a ridiculously high premium which was going to lead to problems further down the line. A grave misjudgement of liabilities came out in 2002, meaning repayments of on average €8 billion euros per year were required. The shares were dumped en mass (from €219 in 2000 to €6.94 on 30 September, 2002 ).

   CEO Thierry Breton obtained €45 billion from bank restructuring, the government the largest shareholder at this time and cost cutting within the organisation.

   In 2004, the government sold a holding which reduced its majority shareholding. Orange went private.

   With €15 billion to come from cost cutting in the group, radical action was required. the ‘NeXT’ scheme was implemented. 

   Approximately 10% of the workforce were cut. Management style was said to be brutal and it is said that this led to the suicides that were widely reported in media across the globe. 

   24 suicides took place by Orange employees. One suicide note read: “I am committing suicide because of my work at France Telecom. That’s the only reason.” And another, who when told that to keep their position would have to move to another town, went and stabbed themselves repeatedly in the stomach. (Nb. Suicide rates at Orange have been falling since.)

   A great headline for the press but unfair on the organisation?

   Modernisation and restructuring a company in France is very difficult. Workers rights, the 35 hour week are all bad for such a major restructuring as well as the psyche of the French and their traditional ‘family centred’ mentality. There is also a ‘power’ structure in some management styles that demands a ‘rule by fear’ outlook that is at best outdated and at worst just wrong. A meeting was held in Italy where one manager from Orange was unimpressed that staff said hello as management walked to a conference room.

   Orange were attempting to change though. 

   Mobile demand was and is outstripping fixed lines and modernization was inevitable. At the time the average age of the workforce was over 45 and re-training can be difficult with an older workforce. 

  Orange used spin to hide mass redundancies and instead asked for staff to retrain and often changed their job specifications and/or their location; stressful at the best of times. Some say this was a positive step, others claim that it was in fact a way of ‘culling’ staff to allow Orange to hire outside contractors with the skill set required and to reduce costs.

   Management members have been prosecuted, government interference is still in the background and debt ratio still needs improvement.

 

THE UGLY

I know you want the negative statements, the ‘Ugly’ of the title but I won’t do it.

  Orange has made mistakes. It’s management style has at best been handcuffed and at worst  unacceptable. The NeXT restructure was poorly handled but in a country that in business is still trying to break out into globalisation Orange has done it.

   It certainly hasn’t been pretty and without government backing (still at 27%) it may have at some stage been targeted or cut and sliced into many other providers portfolios. 

Its debt ratio is still unhealthy and its growth is under attack in France (its most profitable area) from providers such as Free; and credit agencies may downgrade again with the continuing tax issues from the 2005 / 06 restructuring requiring billions of euros to be paid. But with the Chinese and other telecoms giants gaining a foothold in the global economy, it is Orange who keep coming forward. They bought over 93% of Egypts Mobinil mobile service company in 2012 and just recently signed agreements with Samsung for cooperative partnerships. Big business is tough. In France it is tougher. 

   This is business, thousands of employees and families depend on this company and I see nothing that I don’t see in the US, 

London or Germany.

Orange are not doing great but they sure as hell ain’t doing badly!!