Alcatel’s Merger with Lucent, 2006

This case presents the discussions around the 2006 decision of Alcatel and Lucent to merge, with the aim of becoming a major player in the telecom industry, from the perspective of the Alcatel board. The case focuses on the board and leadership issues. Case B, provided as an appendix, briefly describes the aftermath.

The objective of the case is to discuss the effectiveness (and ineffeciveness) of boards in major strategic decisions, and what can influence the decision-making. The well-documented difficulties of Alcatel-Lucent following the merger began at board level, right at the time the decision was taken. The case covers the board decision-process, biases in decision-making, risk oversight and the strategy process.