Factors Leading to Dialog Axiata Underperformance in Sri Lanka

This literature review evaluates the present service quality and strategies taken by Dialog Axiata in Sri Lanka. It discusses the factors related to success of a business in telecom industry, theories related to underperformance of telecom industry, and impact of strategic management in telecom industry.

Running head: EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
A study of factors leading to Dialog Axiata Underperformance in Sri Lanka
Name of the Student:
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Assignment 1
Literature review
Author note:

1EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
Table of Contents
1.1 Introduction................................................................................................................2
1.2 The factors related to business success......................................................................2
1.2.1 Environmental Compliance....................................................................................2
1.2.2 Workplace Health and Safety.................................................................................3
1.2.2 Environmental Impact Mitigation...........................................................................3
1.2.3 Quality and Affordability.......................................................................................3
1.2.4 Availability and Applicability................................................................................4
1.2.4 Lack of Innovation..................................................................................................4
1.2.5 Training issues........................................................................................................5
1.2.6 GSM issues.............................................................................................................5
1.2.7 Lacking adaptability...............................................................................................6
1.2.8 Signal Coverage......................................................................................................7
1.2.9 after purchase servicing..........................................................................................7
1.2.10 Importance of project management soft skills......................................................7
1.3 Theories related to success of business.....................................................................8
1.3 Impact of strategy management...............................................................................10
1.4 Summary..................................................................................................................13
Reference.......................................................................................................................14

2EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE

3EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
1.1 Introduction
The purpose of literature review is evaluating the present service quality as well as
strategies taken by a telecom organization like Dialog Axiata in Sri Lanka. It is implemented to
achieve objective of the organization. The research analyzed the observational research and
reviewing secondary data. Moreover, strategic management models are employed for identifying
the potential in order to maintain long-term competitiveness within the industry. On the other
hand, the factors related to success of a business in telecom industry are discussed in this section.
On the other hand, the theories related to the underperformance of telecom industry is discussed
along with the impact of strategic management in telecom industry that could gain competitive
advantages in the market and retain its respective position in the market.
1.2 The factors related to business success
The major reasons behind the downfall of Dialog Axiata organization located in Sri Lanka is due
to problems, namely: -
1.2.1 Environmental Compliance
According to Sewwandi and Wanninayake (2016), environmental compliance is one of
the most important reason for Dialog Axiata, due to which it has been facing constant downfall
in the turn-over of their business. Lack of proper communication is an important reason behind
the processing Environmental Compliance in Dialog Axiata. In case, proper communication is
not performed in between the internal stakeholders of the company. This leads to the fact that
proper distribution of data among the entire hierarchy is not maintained.in that case it is very
obvious that the data that is processed form higher authority are not distributed among the lower
hierarchy of employees, leading to the fact that conflict among the employees occur. This again

4EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
accts as the reason for decrease in turn-over of the company as the lower hierarchy does not
function according to the demand of higher authorities. Communication gap leads to lack of
transparency among the employees of Dialog Axiata.
1.2.2 Workplace Health and Safety
According to Velnampy and Anojan (2014), there is no Health and safety structure in
Dialog Axiata. This is one of the major reason that leads to lack of motivation of the employees
of the organization. In case the employees of the organization stays de-motivated, work rate of
the organization reduces which ends up in decreasing turn-over of the organization. Dialog
Axiata must progress steadily on the processing of schemes related to workplace health and
security. This will genuinely increase employee motivation and work rate of the employees will
increase as well.
1.2.2 Environmental Impact Mitigation
According to Weerasooriya, Perera and Liyanage (2017), working environment of an
organization is one of the most important aspect of any telecommunication organization.
Importance of workplace environment acts to be this important as this helps in motivating
employees of the organization. In case working environment of the organization is not very
good, employees working in the office will not feel very motivated which will genuinely hamper
the production of the organization. Dialog Axiata has been facing this same hindrance as
working environment of the organization is not very good and professional in nature. Lack of
professionalism leads to decrease in work rate of the organization.
1.2.3 Quality and Affordability

5EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
According to Kajananthan and Velnampy (2014), maintaining quality of products is one
of the most important aspect for an organization to grow. In case quality of product degrade in
nature it is very obvious that turn-over of the organization will decrease. This is due to the fact
that external stakeholders lose their trust on the organization as they suffer due to lack of quality
maintenance. Dialog Axiata was compromising in their built quality of products that are
manufactured by them. This has been a major reason for suffering a decrease in their turn over.
Global audience base gradually decreased by 12% due to trust issues. There has been a sudden
decrease in scale of global audience due to trust issues. This decrease in global audience has
resulted in a drastic decrease in turn-over of Dialog Axiata. Affordability of products that are
manufactured by Dialog Axiata is not very efficient in nature. Cost incurred in buying products
of Dialog Axiata is very high. Despite the fact that quality of product is not maintained, and cost
of the product is higher leading to the fact that global audience base decreases and turn-over of
Dialog Axiata decreases.
1.2.4 Availability and Applicability
According to Mendis and Weerakkody (2017), availability of product is one of the major
reason that has affected Dialog Axiata negatively. This is due to the fact that distribution
management of Dialog Axiata is not very efficient in nature. The fact that Dialog Axiata has
been one of the leading telecommunication companies in Asia, ensures that demand of products
of Dialog Axiata will be very high hence requirement of products are very high. Because there is
not enough manufacturing of the products, clients tend on incorporating in other brands which
also acts as a reason for degradation of the organization in sakes.
1.2.4 Lack of Innovation

6EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
According to Widger (2016), in the initial days when Dialog Axiata was introduced in
market, to increase its popularity, innovation was one of the most important aspect that Dialog
Axiata was focusing on. Gradually as days past by and Dialog Axiata was one of the highly rated
telecommunication company, they stopped improvising in their products. This lead to the fact
that competition in market increases globally. This affected the turn-over of the organization in a
negative way. Each and every company must keep on developing in order to stay at par with
their competitors. The fact that Dialog Axiata did not evolve in a fast rate, hence they did not
attract much new customers. They were mainly dependent on the brand loyalty of their present
client. This factor became one of the major reason of down fall of the organization.
1.2.5 Training issues
According to Hilal (2017), improper training is one of the major reasons due to which
Dialog Axiata is suffering in the field of improvisation and innovations brought in products that
they are manufacturing. Dialog Axiata and the rest 50% was covered by the likes of Airtel,
Hutch and other companies, captured a decade back more than 50% of Asian market. As days
went by and no proper training was provided to the employees of the organization, Dialog Axiata
started losing the place that it has gathered in the market and competitors of Dialog Axiata took
the market. This was the most important reason that marks the starting of downfall of Dialog
Axiata.
1.2.6 GSM issues
According to Abeykoon (2017), in the year 2008, Dialog Axiata introduced GSM
technology for increasing the ease of clients in communicating. This introduction affected the Sri
Lankan based market in a positive way as there was no such competition in market. Other

7EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
companies that had GSM services instilled in them. Mobitel, Etisalat and Hutch were the other 3
companies that supported GSM systems. Despite availability of these GSM in 2 other
companies, Dialog Axiata had no competition in market. Service provided by Dialog Axiata was
much better than Mobitel, Etisalat and Hutch. This is the reason local audience preferred Dialog
Axiata over Mobitel, Etisalat and Hutch. After sheer dominance of Dialog Axiata in
telecommunication market of Sri Lanka, a new phase of telecommunication was about to begin
in Sri Lanka. Airtel launched itself in Sri Lankan market, leading to the fact that it took away a
junk of 1 million customers from Dialog Axiata within 6 months of their introduction. Another
major setback was the launching of Emirates Telecommunication Corporation who bought Tigo.
After introduction of 2 major telecommunication company in Sri Lanka, competition got very
fierce. This lead to decrease in market captured by Dialog Axiata. This was also the major reason
behind the down fall of the organization.
1.2.7 Lacking adaptability
According to Gunasekara (2015), adaptability of Dialog Axiata is very low. Dialog
Axiata used to be the trend setter fir their competitors. In every case Dialog Axiata used to bring
in innovations in the industry and their competitors used to follow their footsteps in order to
process their functioning and bring in change to their functioning. During the end of 2009,
innovation were brought in by companies like Airtel and Emirates Telecommunication
Corporation. Dialog Axiata started following their footsteps. This was also a major reason
behind the shifting of global audience form Dialog Axiata to other companies. There was a
decline of 38% in the market of Dialog Axiata since the introduction of Airtel and Emirates
Telecommunication Corporation. Airtel started manufacturing similar products with better

8EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
specifications than that of Dialog Axiata. With an increase in value of investment, Airtel has
been taking away the market from Dialog Axiata.
1.2.8 Signal Coverage
According to Rakkesh (2017), during the time Dialog Axiata was the only option for the
residents of Sri Lanka, poor signal coverage was there biggest issues in islands and rural areas.
There were no other options for them to mitigate this problem. Airtel and Emirates
Telecommunication Corporation spotted this issue and worked hard on this issue. This leads to
fact that they came up with a much better signal coverage technology than Dialog Axiata. After
the introduction of Airtel signal coverage in island and rural areas were never an issue. This
leads to the fact that residents of islands and rural areas switched to the network of Airtel. This
also affected Dialog Axiata negatively as they did not put any effort on the problems they had in
their processing system.
1.2.9 after purchase servicing
According to Mendis and Weerakkody (2017), after purchase servicing of Dialog Axiata is
very poor in compared to its competitors. This was because it does not have any well-structured
framework for dealing with after purchase flaws that occur in their networking system. This is
also another reason that made clients of Dialog Axiata to opt for other brands who provide better
after purchase servicing. Cost incurred in servicing of purchased products was very high in case
of Dialog Axiata. This was also another drawback of the brand. Other brands provide servicing
in low cost.
1.2.10 Importance of project management soft skills
In order to eliminate barriers of communication, it is necessary to make the
communication process easier. However, in adopting the best practices on communication plan,

9EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
success plan will ensue. For instance, a conceptual framework is important in order to address
the communication barriers comprehensively. It is also important to consider the time of
structuring the project for example the selection of team and development. It is important to
enhance effective communication. Furthermore, enforcing best practices like active listening in
subsequent projects could increase the opportunities for effective communication.
1.3 Theories related to success of business
Great Man theory
The theory assumes that leadership is a quality that is achieved by born and not to be
made. However, the leadership traits are considered as the part of genetic makeup of a leader.
For the opportunity of work, it cannot be suggested that project managers require being the
leaders by nature. However, whether they have the sense that a gift of leadership and should
search for the methods to use it. On the other hand, the question remains whether the leaders are
born or made.
Trait theory
The theory assumes that traits of a leader are properly inherited. Thus, collection of traits
is effectively fir for the leadership that makes a good leader (de Carvalho et al. 2015). It has been
identified that there are twelve personal traits as well as habits, which are considered as the most
effective in leadership capacity and decreasing order from the most to become least efficient as
followed.
 Honesty and integrity
 Caring for fulfilling the demands of employees
 Strong communication skills

10EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
 Strong work ethic
 Approachable as well as willing to listen
 Making sound listen
 Ability to delegate
 Fairness
 Competence for performing duties
 Knowledge of work environment
 Flexibility and innovation
 Taking responsibility
However, the same results addressed personal traits as well as habits, efficient for leadership as
well as descending order from the most to least efficient as followed.
1.Ineffective communication
2. Poor work ethic
3. Failure to act
4. Neglects needs of workers
5. Inability to delegate
6. Questionable ethics and integrity
7. Unwillingness to change
8. Unwillingness to compromise
9. Lack of focus

11EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
10. Belief they know everything
11. Inability to accept criticism
12. Poor comprehension of job
The theory has lacks of proof as well as implies on traits are properly engraved in the
genes so that it implies that there would be less choice of changing the behaviour. On the other
hand, it is not common seeing some people changing parts of behaviour.
1.3 Impact of strategy management
The Sri Lankan telecommunication industry has been in the stage of maturity, where
Dialog Axiata has an important role in the market position. On the other hand, the competitors
like Mobitel, Etisalat and Airtel shared the rest of the market. It results privatization of all
competitors market shares that began to increase day after day. After introduction of Dialog
Axiata GSM to the market, the organization was able in maintaining the position of market
leader.
On the other hand, in order to maximize profits, the enterprises need to attract new
customer loyalty. It is essential maintaining effective relationship with the consumers that
ultimately leads that consumers end up spreading positive word regarding the service (Sewwandi
and Wanninayake 2016). After supporting the employees, ever involved with the process of
resolving the process that is able to handle to customer complaints as well as helping technical
issues in order to ensure that the process is favorable with consumers. Providing excellent
service is important in the industry where the competition is high as the customers can switch
less efforts as well as no cost.

12EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
It expands the present activities through growth strategy. The present product lines of the
organization have the real development potential that can be expanded the activities in order to
increase profits. On the contrary, they follow vertical development strategy. Dialog Axiata
contributes its present value added services without the changes it processes. It is also important
to emphasize on the recent strategy of making differentiation as the competitive strategy. The
strategic business units need to follow the unique value added services. For this, the organization
can charge a higher price for the unique services. Considering the undertaking cost and
leadership strategy is important to switch behavior of the customers. The switching behavior of
the consumers cannot be seen in urban areas like Colombo, Kandy and Galle. However, the use
of communication by calls or sms has a higher chance for switching from an organization to
another. A telecom organization can continue its present value added services without making
any chances as the organization gains profits. However, it should be stabilized that is able to take
major acquisitions as well as innovations that is achieved in past.
The business position of Dialog Axiata can be analyzed with the help of PESTLE
analysis. The factors can be described as followed.
Political: Sri Lanka possesses positive foreign investment policies. However, the issues
are identified the significance of liberalization because there is political interventions
bureaucratic attitudes that can be inherited from colonial reign as well as poor governance. Apart
from this, the country as well as the industry has not developed at it is foreseen during
liberalization. In addition, the activities of terrorists remained continuous in the process.

13EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
Economical: There is also unstable macro-economic environment as well as trade policy
regime includes negative impact on the industry. The fall of the rate of exchange rate over the
years occurred gradually.
Inception of liberalization policy has undergone huge reforms in the particular sector. On
the contrary, Sri Lanka has lagged in the dynamics that is incorporated through India in order to
attract foreign direct investment. In addition, the attitudes for the investment required to be
enhanced.
Socio-cultural: Sri Lanka possess social conditions for instance the rate of literacy is
high. The rate of infant mortality is very low as well as expectancy of life is long. The country
also has an educated along with trainable work force (Gunasekara 2015). On the contrary, the
country inherits a bureaucratic attitude from colonial administration, which results in resulting
inefficiencies a well as discrimination.
Technological: Sri Lanka depends on transferring technology from the foreign
investments. On the other hand, TRCSL encourages the local research as well as development.
The nation is not performed well for adopting the technological changes timely. For an instance,
the shift from analogue to digital as well as the process of adopting CDMA technology
materialized slowly.
Ecological and legal: TRCSL, the regulatory body takes us several dimensional roles. It
also makes sure that fair and lawful enforcement of the government, policy as well as hold
operators are accountable for performing and addressing the issues of customers (Gunasekara
2015). However, it has been criticized over the years for information inefficiency as well as
discrimination.

14EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
Dialog Axiata implements the strategies that are visible in the organization. They have
diversified business across several areas during the process of development. For an instance, by
acquiring MTT, the organization has several area during last years. The business plan is
generally formulated at the time of starting of the year. It considers major objectives of the
organization. The progress of a project can be monitored monthly in several strategic meetings.
Dialog Axiata also tries introducing the comprehensive research as well as wing of development.
The organization has taken the initiative for setting up the process that could obtain benefits.
1.4 Summary
From the above discussion, it can be summarized that in order to achieve the
organizational goals as well as objectives, the organizations need to follow strategic management
practices. Hence, it is important to focus on strategic management and bring theoretical benefits.
On the other hand, regularly practicing of strategic management and monitoring with
standardized intervals can be able to obtain competitive benefits in the market. Strategic
management is identified as a serious investment considering competitive business environment.

15EVALUATING FACTORS TO DIALOG AXIATA UNDERPERFORMANCE
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Trincomalee, Sri Lanka (No. PhD). Deakin University.
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telecommunications industry. International Journal of Scientific & Technology Research, 4(6),
pp.333-343.
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the telecommunication industry.
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Cash Flow Ratios and Traditional Ratios: The Telecommunication Sector in Sri Lanka. Research
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