María H. Jaén
IESA Business School Venezuela
In October 2004, Compañía Anónima Nacional de Teléfonos de Venezuela (CANTV) was Venezuela’s leading service company. It employed 9,800 people and posted annual sales to the tune of Bs. 3191 billion (US$ 1.662 billion, at the official exchange rate), operating 2.7 million land lines and servicing 2.7 million of mobile phone users, 231,938 Internet users, 92,011 public telephones across the nation and 45,077 home wireless phones. Additionally, CANTV was the only Venezuelan company listed at both New York and Caracas Stock Exchanges. After operating as a State monopoly since its inception in 1930, the company was privatized in 1991. Starting in the 1990s, CANTV faced growing competition in a market featuring regulated prices for household services, two-digit inflation rates, and a consumer base with quickly deteriorating purchasing power. To offset its falling revenues (over three consecutive years, with a slight recovery in 2004), the company focused on cost reductions and new service introductions, including a prepaid mobile telephone service and broadband Internet access.
This case describes the challenge involved in formulating a social responsibility strategy for large Latin American public company that operates in a setting riddled by political instability, financial volatility and growing poverty. Gustavo Roosen, president, believed CANTV had to convey an image of “friendly, great company” to its stakeholders (customers, government, suppliers, among others). The goal was to align CANTV’s social portfolio with the image of a “friendly” company that created social value and a “great” business that produced economic value.
This case has been designed for corporate social responsibility graduate and executive education programs. It may also be used in courses on business and society, strategy, leadership, organizational change, and business ethics.