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The rise and demise of Lucent Technologies

Author

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  • Lazonick, William
  • March, Edward

Abstract

We analyze the rise and demise of Lucent Technologies from the time that it was spun off from AT&T in April 1996 to its merger with Alcatel in December 2006. The analysis, contained in the three sections that form the body of this paper, considers three questions concerning Lucent’s performance over the decade of its existence. 1.How was Lucent, with over $20 billion in sales in 1995 as a division of AT&T, able to almost double its size by achieving a compound growth rate of over 17 percent per year from 1995 to 1999? 2.What was the relationship between Lucent’s growth strategy during the Internet boom and the company’s financial difficulties in the Internet crash of 2001-2003 when the Lucent was on the brink of bankruptcy? 3.After extensive restructuring during the telecommunications industry downturn of 2001-2003, why was Lucent unable to re-emerge as an innovative competitor in the communications equipment industry when the industry recovered?

Suggested Citation

  • Lazonick, William & March, Edward, 2010. "The rise and demise of Lucent Technologies," MPRA Paper 22012, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:22012
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    File URL: https://mpra.ub.uni-muenchen.de/22012/1/MPRA_paper_22012.pdf
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    References listed on IDEAS

    as
    1. Marie Carpenter & William Lazonick & Mary O’ Sullivan, 2003. "The stock market and innovative capability in the New Economy : the optical networking industry," Post-Print hal-02447314, HAL.
    2. Marie Carpenter & William Lazonick & Mary O'Sullivan, 2003. "The stock market and innovative capability in the New Economy: the optical networking industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 12(5), pages 963-1034, October.
    3. Lazonick, William, 1999. "The Japanese Economy and Corporate Reform: What Path to Sustainable Prosperity?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 8(4), pages 607-633, December.
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    Cited by:

    1. Paolo Bartesaghi & Michele Benzi & Gian Paolo Clemente & Rosanna Grassi & Ernesto Estrada, 2019. "Risk-dependent centrality in economic and financial networks," Papers 1907.07908, arXiv.org, revised Apr 2020.

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    More about this item

    Keywords

    Communications equipment; innovation; global competition; financialization;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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