Management strategies in the Czech telecommunications sector: a comparative study of Český Telecom and T-Mobile

Abstract

This article compares employment relations (ER) strategies at the incumbent fixed line Czech telecommunications company (TelCo), Český Telecom (ČT), and the T-Mobile subsidiary, T-Mobile Czech Republic (TMCZ). It considers the extent to which the firms were able to introduce Western-style HRM practices within the context of three changing dynamics. First, the collapse of communism in the former Czechoslovakia was followed by rapid economic liberalization and privatization in the Czech Republic. Second, telecommunications sectors worldwide were subject to deregulation and the rapid diffusion of new technologies. Third, fixed line and mobile TelCos were subject to differing challenges and opportunities. The article uses path dependency, institutionalist and strategic human resource management (SHRM) related theories to assist in this analysis. It concludes that by 2005 the introduction of Western-style HRM practices into the Czech telecommunications sector appeared less constrained by former institutional and historical constraints. TMCZ's ER policies were further influenced by its parent firm's transnational strategies that sought to coordinate better its subsidiaries and create a ‘global’ brand. Despite the differing circumstances of the fixed line and mobile sectors, by 2005 ER practices and strategies at the two firms were to an extent converging, as ČT continued to cut costs and TMCZ adjusted its strategies to better accommodate a saturated market. Given these changes the article postulates that the Czech telecommunications sector has now shifted towards a mature transformation stage, as ER strategies increasingly reflect Western-based SHRM practices and concepts.