Supplement | HBS Case Collection | April 2008

Chunghwa Telecom Co., Ltd. (B)

by Paul W. Marshall, Michael Shih-ta Chen and Keith Chi-ho Wong

Abstract

In late November 2000, Chung Telecom Co., Ltd., the once-monopolized telecom operator owned by the Taiwanese government, was on its way to privatization. Mr. C.K. Mao, Chairman of the company, was headed the job only three months earlier, after its prior chairman resigned unexpectedly in the midst of chaos brought by the resistance of its staff who feared losing their civil servant status after privatization. Also facing Mao was the forthcoming deregulation of the telecommunication industry on the island which would brought about new competitors on fixed line services, in addition to the already competitive mobile communication segment where the company's once dominant market share was heavily eroded. Mao had to decide on the pricing strategies for the company's various product lines, including fixed line, mobile services, as well as data communication. He also needed to ponder on how to revise the company's compensation system to better motivate its staff in a deregulated market and communicate all these changes to the unionized labor force.

Keywords: State Ownership; Jobs and Positions; Monopoly; Privatization; Competition; Decisions; Motivation and Incentives; Labor and Management Relations; Resignation and Termination; Compensation and Benefits; Price; Status and Position; Telecommunications Industry; Public Administration Industry; Taiwan;

Citation:

Marshall, Paul W., Michael Shih-ta Chen, and Keith Chi-ho Wong. "Chunghwa Telecom Co., Ltd. (B)." Harvard Business School Supplement 808-138, April 2008.