Seven Castles

A White Paper (4)- -

                                      

A White Paper on the All-round Development of Shanghai Telecom
July 1, 2004 (First Edition)

Shanghai Telecommunication Co., Ltd.

Contents

Introduction
Chapter 1 Development Direction
I. Development Strategy
Strategic Objectives
Critical Success Factors
Key Action
Chapter 2 Development Motivation
II. Shareholder Interests
Value-seeking
Critical Success Factors
Key Action
III. Customer Values
Value-seeking
Critical Success Factors 
Key Action
IV. Staff Development
Value-seeking
Critical Success Factors
Key Action
Chapter 3 Development Platform
V. Service Quality
Value Conversion
Critical Success Factors
Key Action
VI. Network Orientation
Value Conversion
Critical Success Factors
Key Action
VII. Management Upgrade
Value Conversion
Critical Success Factors
Key Action
Chapter 4 Development Basis
VIII. Competition versus Cooperation
  Value Interaction
  Critical Success Factors
  Key Action
IX. Environment for Survival
Value Interaction
Critical Success Factors
Key Action
X. Social Responsibility
Value Interaction
Critical Success Factors
Key Action
Conclusion

Chapter 4 Development Basis
VIII. Competition versus Cooperation

Competition and cooperation are the two forces that drive Shanghai Telecom to survive and development. Cooperation exists in competition, and vice versa. Both penetrate and supplement one another. We advocate co-competition - jointly defend against and defuse the penetration and threat of competitive products through cooperation on the basis of customer expectation; implement specialized business operation with specific priorities and features through competition.

Market prosperity stems from competition and market efficiency from cooperation. Co-competition is the basis for competition in telecom industry and a rational market game between telecom operators.  

Value Interaction

1. Competition in customer values. Be dedicated to value conversion for customer needs, enhance the ability to create values for customers and fundamentally maintain the competitive edges of Shanghai Telecom.

2. Competition in service quality. Pursue higher service quality at the rational cost, foster a healthy image of Shanghai Telecom as a provider of quality telecom services to customers, and help to achieve the best performance of Shanghai Telecom as a whole.

3. Competition in management efficiency. Upgrade of the company is promoted by management upgrade. All the tangible and intangible resources of the company should be effectively integrated into one with sustained competitive edges to realize the value commitment to investors and customers with long-standing and steady growth. 

4. Competition in human resource. Build up a group of highly qualified employees appropriate to a world-class telecom operator and information service provider to cope with the challenges brought about by the "localizing talents" strategy of overseas carriers after China's accession to the WTO.

Critical Success Factors

1. Normalize market conditions. Implementing co-competition is dependent on telecom policies and regulations that are complete, fair, rational and operable in order to control and eliminate unbridled competition in telecom markets. The gradual completion and full play of industry regulation will help major Chinese telecom operators to make rational choices of co-competition.

2. Strength of carriers. In the fierce telecom market competition, the only way to gain the initiative is to constantly enhance the comprehensive competitive edges of our own.

3. Opportunities and challenges brought about by the WTO. China's accession to the WTO will radically change the landscape of China's telecom industry. Deregulated market will give China's telecom operators more opportunities for cooperation.

4. Innovative cooperation mechanism. First, partners should reach consensus towards co-cooperation, and then on the cooperation basis of "drawing on each other's merits, being compatible with each other's culture, coordinating objectives and achieving win-win benefits", rebuild new value chains with the aid of each other's core ability to jointly enhance the competitiveness.  

Key Action

1. Firmly oppose unfair competition and irrational or illegal ways used to hit hard at the rivals. Associated abilities should be enhanced to resist vicious and unbridled competition.

2. Interconnection and interworking are the basis for co-competition. Shanghai Telecom will conscientiously make a good job of interconnection and interworking required by the laws and regulations to ensure reliability, high quality and security of networks, and present our sincerity for cooperation with our actual action.  

3. Based on indicator evaluation system for world-class carriers, work out world-class competitiveness indicators of our own from the aspects of market exploitation, scale and performance, management efficiency, innovation and learning, environment adaptability and influence, identify differences and fully enhance competitive edges.  

4. Communicate with other carriers on a regular basis, share market information and experience, avoid vicious competition, seek cooperation with a target of jointly expanding the markets, and create sound competition patterns of the telecom industry.

5. Establish cooperation model copies for Shanghai Telecom to deal with value-added service providers, content providers, terminal providers, rivals, channel partners and investors to provide theoretical support to co-competition in the future. 

6. Through environment monitoring, make a thorough study on rivals and partners, and establish a set of rules to deal with equipment suppliers and other resource suppliers. Formulate co-competition strategy, nurture and exploit markets, dig up and meet customer needs.

7. Selectively participate in various activities of associations and societies to enhance information exchange and communication with all trades and professions to build a solid platform for future cooperation. 

8. Through channels like mass media, spread concepts and attitudes of Shanghai Telecom concerning competition and cooperation and further set up an industry image of Shanghai Telecom - credibility for cooperation.

IX. Environment for Survival

Environment for survival means all the external settings that Shanghai Telecom is dependent on for survival and growth, including economic, legal, regulatory, social, technical, market and globalization settings.

The sustained growth of Shanghai Telecom will not go without favorable environment for survival. Meanwhile, Shanghai Telecom, through its own activities, constantly impacts the environment for survival. Hence, Shanghai Telecom must interact harmoniously with the environment for survival if sustained growth is sought, and jointly achieve increased values. 

Value Interaction

1. Economic settings. Keep current awareness of the information about economic settings and seek development opportunities for Shanghai Telecom.

2. Legal settings. Persevere in business operation by laws and regulations, effectively employ legal means to safeguard the benefits of the company and contribute to the development of Shanghai Telecom.

3. Regulatory settings. Gain an insight into information on policies and regulation at good time, and enthusiastically endeavor to win the support of policies and regulations to create favorable regulatory settings for Shanghai Telecom.

4. Social settings. Establish good relationship with all the public groups and build up a corporate image of Shanghai Telecom.

5. Technical settings. Timely comprehend and leverage technologies and standards of the industry and enjoy a voice in the industry.

6. Market settings. Timely acquire accurate competitive intelligence and make a quick reaction to the changes of market settings. Create favorable market settings while establishing and consolidating our competitive edges.

7. Globalization settings. Make a thorough study on international settings for telecom industry and enthusiastically challenge globalized competition and build Shanghai Telecom into a carrier with world-class competitiveness.

Critical Success Factors

1. Leaders' attention. Sufficient attention and support by leaders of all levels of the company are necessary for the works that will interact with the settings, and practically integrated to the routine works of the company.

2. Supporting mechanism. A complete set of mechanism will institutionalize and systematize the exchange between Shanghai Telecom and the settings to streamline value interaction.

3. Professionals. Interaction with the settings requires support of associated professionals. This is particularly so in the fields Shanghai Telecom is not familiar with, e.g. globalization settings and internationalized operation, introduction of associated mature professionals is more urgent to make up for our deficiency in experience.

4. Support systems. A set of mechanism that interacts with the settings requires support of specialized information systems and only in this way could the goal of value interaction between Shanghai Telecom and the settings be achieved more quickly and accurately.

5. Value interaction with the settings requires multiple channels between Shanghai Telecom and the settings to realize sound interaction with the settings in different aspects and layers.

Key Action

1. Establish environment monitoring, analysis and reaction mechanism. Specialized processes, management and evaluation approaches are required, so is specialized teams to collect leaders' information requirements, study information on the settings, timely work out the relevant countermeasure and give reports to the senior management. 

2. Establish a specialized system for information on the settings to serve the mechanism, and play some other roles. With this information system, all the employees can share the relevant information as allowed and support the everyday decision-making.

3. Be enthusiastically involved in activities of different kinds, like investigation and study on policies, launching industry association activities, joining in the collaborative projects with the government, participating in informatization drive initiated by the government, to win the policy support.

4. Establish corresponding public relationship mechanism to deal with customers, the public, government, mass media and international community, etc. and proactively launch public relationship activities on a regular basis or with a theme. Improve emergency reaction mechanism.  

5. Under the unified leadership of China Telecom (Group) Corporation, initiate and proactively participate in development of telecom technologies and associated standards in due course to become owners of the sophisticated technologies and industry standards and establish sharp competitive edges in telecom industry.

6. Introduce professional executive system, select professional executives who are familiar with internationalized operation from the market, make the personnel system of Shanghai Telecom up to the international standard and lure more international talents. 

X. Social Responsibility

Social responsibility is the commitment an enterprise makes for improving living standards of the interested parties and contributing to sustained growth. Fulfillment of social responsibility is to abide by moral standards, make contribution to economic development and social progress, and improve the living standard of employees and their families, communities and our society as a whole, shaping sound interaction between the company and economic, social and ecological settings. 

With improved market conditions and sustained corporate growth, social responsibilities are no longer limited to the concepts of "giving", but also a source of "getting new competitive edges". The relationship of the company and the society in the aspects of rights and obligations is raised to cyclic value interaction.

Value Interaction

1. Moral standards. Take credibility as a guiding principle for all the business activities of Shanghai Telecom and be sincere in the aspects of information disclosure, corporate governance and business operation. All the moves should be up to the moral standards of the trade and society.

2. Value chain. Supplier selection is based on the principle of "just, fair and diverse". Create favorable conditions for small- and medium-sized enterprises to grow and help invigorating the national industry. Strengthen communication with customers and allow them to be involved in the process of creating customer values. Guided by the social informatization objectives, jointly promote the prosperity of the industry chains.

3. Employees. Be just and fair in the aspects of recruitment, career development, payment and welfare, avoid any policy of discrimination. Respect employees' democratic rights and maintain their legitimate rights.

4. Community. With highly humanistic concerns on the society, Shanghai Telecom is dedicated to various causes including education, arts and culture, community service and public welfare, enthusiastically carry out activities of "supporting the army and giving preferential treatment to the families of the servicemen and martyrs, and supporting the government and cherishing the people", enhance employees' awareness of national defense; help the disadvantaged groups, and become a successful and respectable corporate citizen.

5. Environment. Targeting zero damage, zero disease and zero accident in the working activities, all the infrastructure deployment, operation process and products should meet the environmental requirements. Efforts should be made to save energies, protect resources and animals for sustained growth of the company and the society as a whole. 

Critical Success Factors

1. Interactive development. The social responsibility of the company should be focused on enhancement of the abilities of all the interested parties. Social responsibility is not one-way resource input to the society, instead, two-way interactive development of the company and the society.

2. Constant improvement. The value contribution the company makes to the society should be constantly improved on the basis of long-standing commitment. Seek optimized value contribution to the society with own strength and a good understanding of the interested parties.

3. Cooperation mechanism. The company should forge partnership and cooperation ties with all the interested parties on the basis of being equal, respectful and complementary, to better understand social needs and generate more social benefits. 

4. System transparency. All the institutions and standards should be further open and transparent. On the prerequisite of keeping business secrets, give the public more rights to know, as the basis for building corporate credibility.

5. Architecture consolidation. Fulfillment of the corporate social responsibility should consist with the management objectives of the company and take roots in the corporate culture and management concepts. Architecture consolidation helps to increase the efficiency of fulfilling the corporate social responsibility.

Key Action

1. Install a corporate citizen committee, on behalf of all the functional departments and business units of Shanghai Telecom, to fulfill social responsibility, unify the approaches and interface for fulfilling social responsibility and implement systematic planning and management of social responsibility.

2. Establish social responsibility system with characteristics of Shanghai Telecom, as part of the medium- and long-term strategy of Shanghai Telecom. Formulate corresponding institutions and policies to divide overall social responsibility for all the business units and employees.

3. Build a team of volunteers devoted to community services, and be extensively involved in undertakings of education, arts and culture and community services.

4. Work out methods to evaluate employees' social responsibility fulfillment. Recruit, promote and encourage employees who make outstanding contribution to the society and present exemplary effects.

5. Prepare annual report on social responsibility. Evaluate the achievements of Shanghai Telecom in fulfilling social responsibility and set enhanced objectives. 

6. Build bridges to communicate with all the interested parties, establish working mechanism with long-standing effects and provide employees more opportunities to fulfill their social responsibility.

7. Establish a special task force of Environment, Health & Safety (EH&S) for Shanghai Telecom to study, formulate and evaluate environment-related policies for Shanghai Telecom and launch EH&S hotline for technical consultation.

Conclusion

Preparing A White Paper on the All-round Development of Shanghai Telecom is a practice of a Chinese enterprise based on its understanding of the scientific concept of development, and a result as the thinking of the all-round development meets the realities of a prosperous and rapidly advanced age.

We hope:

For the company, this is a declaration of development, a banner for self-encouragement, a mirror for self-discipline, with which we can identify our shortcomings and see the future distinctly;

For the investors, this is a blueprint illustrating the development of Shanghai Telecom by which they gain understanding and confidence;

For customers, this is solemn commitment, which interprets the concept of "customer first, service foremost", delivering customers trustworthy services and creating more values;

For employees, this is a heart-to-heart contract, by which rational expectation for the future is acquired to implement coordination of personal development and the corporate development;

For other interested parties, this is an invitation for value sharing, by which trust and cooperation will be enhanced;

For the society, this is exposure of our innocent heart and an expression of our high sense of responsibility - advancing with the society.   

The slogan of "sharing the information-based civilization synchronous with the world" will lead Shanghai Telecom to create new glory in the information age.

"Unity and hard work, value creation with joint efforts, harmony and innovation, and prosperity sharing", let us conclude this document with our corporate minds, which also serves as the "opening remark" for the new round of development!

- 作者： zhangliping 访问统计：　2005年01月23日, 星期日 21:00 加入博采