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Free Term
Paper - Management Issues of AOL Time Warner
America Online was founded in 1985
in Dulles, Virginia. America Online is the world's leader in
interactive services, Web products, Internet technologies, and
e-commerce related products and services. America Online
operates with two worldwide internet services: America Online,
with members exceeding 20 million, CompuServe, with more than
2.3 million members and several other important Internet brands.
Today, worldwide membership of the AOL service has crossed 29
million and members are averaging almost 70 minutes online.
On January 10, 2000 America Online and Time Warner announced a
merger to build a completely integrated media and communications
company for the Internet generation in a stock combination
valued at $350 billion, named AOL Time Warner with total
revenues exceeding $30 billion. The merger combines Time
Warner's enormous range of media, entertainment and news brands
and its advanced broadband delivery systems with America
Online's widespread Internet services, technology and
infrastructure, including premier consumer online products, a
huge community in cyberspace. Currently AOL Time Warner operates
in 18 countries. Steve Case, chairman of the board of AOL Time
Warner, stated during the merger:
Steve Case plays an important role in building and leading AOL
Time Warner, focusing mainly on the developments and policy
initiatives driving the worldwide development. Richard D.
Parsons, previously Time Warner's President, is now AOL Time
Warner's CEO. He sets the company's plan and handles the
management related issues of the company.
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Less than three weeks after approval of its US$106 billion
merger, media leader AOL Time Warner fired 2,400 employees.
According to Time Warner these changes will enhance the focus of
company, capture synergies for development and strengthen the
integration of company. Hardest hit by the cutbacks were
staffers at Time Warner properties, including 600 of the
approximately 14,000 employees at Warner Music Group Division.
At Time, Inc., 400 of the division's 13,000 employees were
fired. According to reports, no cuts were made in editorial
staff and most of the employees that were fired belonged to
subscription services and direct marketing staff. Although the
major cut offs were from Time Warner divisions, 725 staff
members at America Online also lost their jobs. This represents
approximately 5 percent of the division's workforce of 15,000
before merger (2). For the remaining employees, the AOL Time
Warner offered stock options as an encouragement. Department
heads and managers in the past were given cash rewards based on
their performance. Now, the heads will receive only stock
options. According to AOL Time Warner there are many reasons for
lay offs, including restructuring the company management,
cutting the over heads, reducing company operations cost and
slow pace of internet and entertainment market.
Shortly after these layoffs, AOL Time Warner reported that
combined salary and bonus of the company’s 6 highest paid
executive officers had risen between 8.9% and 25.2% during the
previous year, with the average officer getting a 16% increase
in salary and bonus. Whereas AOL Time Warner failed to meet its
stated financial goals, so an additional layoff of 1,700
employees was announced in August, 2001. These cuts reached
across the whole company, requiring several remaining employees
to take additional duties and learn new skills.
Andrew Heiskell Community Service Awards
Established in 1982, the Andrew Heiskell Community Service Award
recognizes employees who make outstanding contributions to
public service, equal opportunity and human rights while
performing at their best during their careers. Awards are
presented at a ceremony in New York each June, where winners get
an award scroll and a $2,000 prize. The company also donates
$3,000 to a charity of the winner's choice (3).
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ECHO (Employees Caring and Helping Others)
AOL Time Warner recently launched an employee benefit program
called ECHO (Employees Caring and Helping Others) to encourage
all employees of the company to give something back to the
communities in which they live and work. Using ECHO, employees
can learn more about their, connect with volunteer opportunities
in their area, join a company-sponsored volunteer plan, or make
an online donation to a favorite charity. AOL Time Warner
employees are also encouraged to participate in the ECHO Grant
Program, which provides grants of $500 and $1000 to employees
and teams of employees who volunteer in their communities (3).
AOL Time Warner offers a range of employment positions in many
areas including Internet services, networks, publishing, filmed
entertainment, cable systems, music and interactive video,
within the United States and around the world. AOL Time Warner
is an equal opportunity employer and employs only qualified
experienced individuals based upon job related qualifications
without any concern of religion, race, color, national origin,
sex, disability, age or any protected characteristic. AOL Time
Warner also complies with the laws about reasonable
accommodations for individuals with disabilities.
A significant part of the Company's strategy plan in its
businesses is to maintain increasing revenues from advertising
and business sources and from the sale of company merchandise,
as well as from further sources such as transaction and
licensing fees. AOL Time Warner continues to maintain a large
variety of relationships with advertising and business partners
to expand its non-subscription based revenues.
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