What Does It Mean Being a Decent Boss (A and B) - Teaching Note

Description

René Obermann knew it since his first day as Deutsche Telekom's CEO: he had to fire - or "outsource" as some top managers used to say politely - at least 50,000 people. Indeed, all the relevant indicators highlighted the need to reduce the enormous amount of workers at the company. In November 2006, when Mr. Obermann was appointed DT's CEO, the telecommunication group had around 250,000 employees, of whom 150,000 were located in Germany. This number per se meant nothing but the problem became clear when calculating the ratio between sales and overall personnel costs. At DT, overall personnel costs were worth 25% of sales, while other competitors had much better performances: France Télécom's workforce cost just 18% of the sales total, at Telefónica in Spain it was 15% and at KPN in the Netherlands it was 12% .

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