By Steven L. McShane, The University of Western Australia

As a formerly g overnment-owned surround set monopoly, Profitel enjoyed some(prenominal) decades of minimal competition. until now today as a publicly traded enterprise, the follows almost exclusive control over telephone copper wiring across the bucolic keeps its value mar- gins above 40 part. Competitors in telephone and DSL wideband continue to rely on Profitels wholesale business, which generates substantially more(prenominal) profit than similar wholesale services in many other countries.However, Profitel has stiff competition in the cellular (mobile) telephone business, and other appear technologies (voice- over-Internet) threaten Profitels dominance. Based on these threats, Profitels board of directors mulish to hire an outsider as the new top dog exe have it awayive. Although several qualified candidates expressed an interest in Profitels top job, the board selected Lars Peeters, who had been chief operating officer for sextet years of a publicly traded Euro- pea n telephone conjunction, followed by a brief stint as CEO of a cellular telephone come with in the United States until it was acquired by a big firm.Profitels board couldnt believe its well behaved fortune Peeters brought extensive industry knowledge and world(a) experience, a high-octane energy level, self-confidence, decisiveness, and congenial besides strongly persuasive interpersonal style. He besides had a unique presence, which caused people to pay fear and respect his leadership. The board was overly impressed with Peeters scheme to bolster Profitels profit margins.This included leaden investment in the latest radio wideband engineering (for both cellular telephone and computing machine Internet) before antagonists could gain a foothold, cutting be through layoffs and reduction of peripheral services, and putting blackjack on organisation to deregulate its traditional and emerging businesses. When Peeters described his strategy to the board, one board membe r commented that this was the same strategy Peeters used in his precedent two CEO postings. Peeters dismissed the comment, saying that severally situation is unique. Peeters lived up to his reputation as a decisive executive.Almost immediately after taking the CEO job at Profitel, he hired two executives from the European companionship where he previously worked. unitedly over the next two years they cut the workforce by 5 percent and rolling out the new radio receiver broadband engineering for cellphones and Internet. Costs increased somewhat due to curtailment expenses and the wireless engine room rollout. Profitels wireless broadband subscriber list grew quickly because, in acrimony of its very high prices, the technology faced hold competition and Profitel was pushing customers off the older technology to the new network.Profitels customer sat- isfaction ratings fell, however. A study consumer research group reported that Profitels broadband offered the countrys worst value. Employee morale also declined due to layoffs and the companys public painting problems. Some industry experts also noted that Profitel selected its wireless technology without evaluating the alternative emerging wireless technology, which had been gaining launch in other countries. Peeters aggressive campaign against regime regulation also had unintended consequences.Rather than achieving less regulation, criticizing regimen and its telecommunications regulator made Profitel look even more arrogant in the eyes of both customers and government leaders. Profitels board was troubled by the companys lacklustre share price, which had declined 20 percent since Peeters was hired. Some board members also worried that the company had bet on the wrong wireless technology and that subscription levels would stall far below the number infallible to achieve the profits stated in Peeters strategic plan.This concern came closer to reality when a foreign-owned competitor won a $1 billio n government contract to improve broadband services in regional areas of the country. Profitels proposal for that regional broadband upgrade specified high prices and limited corporeal investment, but Peeters was confident Profitel would be awarded the contract because of its foodstuff dominance and existing infrastructure with the new wireless network.When the government decided otherwise, Profitels board shoot Peeters along with two executives he had hired from the European company where he previously worked. Now, the board had to come across out what went wrong and how to avoid this problem in the future. Questions 1. Which perspective of leadership best explains the problems experienced in this case? Analyze the case using concepts discussed in that leadership perspective. 2. What can organizations do to minimize the leadership problems discussed above?