Business / Situation Analysis And Problem Statement Paper-Global Communications

Situation Analysis And Problem Statement Paper-Global Communications

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Autor:  anton  29 March 2011
Tags:  Situation,  Analysis,  Problem,  Statement,  global,  Communications
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Running head: SITUATION ANALYSIS AND PROBLEM STATEMENT: GLOBAL COMMUNICATIONS CORPORATION

Situation Analysis and Problem Statement: Global Communications Corporation

University of Phoenix

Situation Analysis and Problem Statement

Global Communications (GC) is a technology firm struggling with the after effects of the bust in the Information Technology Industry. GC is faced with how to rebound, based upon the strategic initiatives presented by the Senior Leadership Team. This paper will explore the real problem that Global Communication faces meeting the challenge for continued competition in the technology arena. Through the application of the 9-step problem solving method the writer will dissect the situation and assess the issues, opportunities, ethical dilemmas, and goals to come up with the problem. The writer will then calculate the alternatives, risks and pros and cons of the possible decisions; followed by an evaluation of the development and implementation of the final solution and the final results. The first step, however, will be to explore how GC came to this apex.

Situation Background (Step 1)

Global Communications has experienced a drop in stock value as a result of the recent bust in the high tech industry. During the boom time, many companies popped up. This influx of new providers saturated the market and provided more competition and the need for further technological advances to keep up with consumer demand. GC’s challenge was keeping up with the needed advances and turning a profit. This is something that they have not been able to do.

As a result of lagging profits and a lowered customer base, GC recently made changes to infuse fresh ideas into the corporate mix. Katrina Heinz, the new CEO, brings with her the knowledge of the global long-distance industry. It is Katrina’s desire to increase revenue and profit through globalization. Another new person, Nancy Everhardt was brought aboard as the EVP for her expertise in growing the small business market through the creation of products that were more attractive to consumers. The new corporate team has tried to stem the downward spiral by negotiating a new contract with the Union which included concessions on education and health benefits. However, after further evaluation of the current financial situation this has not been enough to realize the changes that the Board of Directors demands.

In order to turn things around financially, the corporate team has devised a plan to increase market share, profitability, and globalization. The plan entails the downsizing of the domestic call center and outsourcing those positions to a more technologically advanced work force in India and Ireland. The savings in the cost of labor would decrease the overhead for advancement.Need citation here The question at this point is, at what cost?

Issue Identification

There are many challenges facing GC in this scenario. At this juncture the learner will point out several that are on the forefront. The first issue is the problem of dwindling stock prices. The recent reaction to the troubles of the IT industry has resulted in a greater than 50% reduction in GC’s stock value. There is also the issue of GC’s inability to effectively compete in the marketplace. The market is saturated with competitors who have diverse capabilities that better serve the demands of the consumer. GC has not been able at this point, to provide the technological advances that consumers are looking for.

The direction that Global Communications wishes to move in creates another issue in that the possible downsizing of the Domestic Call Center would displace a large percentage of employees. Employees have become complacent with their current skill sets and are not returning to school to maintain a competitive edge as an employee or producer of advanced technological capabilities(Gincel, 2005). GC’s plan is to outsource to an area where technological skills are readily available, India and Ireland. Although the technological advances GC is seeking will be available in those locations, this move could also cause a backlash within the current and future customer base. Continued moves to offshore locations are causing many consumers to look twice at companies that use this tactic for an increased market share (Stones, 2003). The final issue identified is the possibility of litigation by the Union officials.

Opportunity Identification

There are many opportunities for Global Communications in moving forward with its plan of action. The first opportunity is the possibility of increased technical sophistication by partnering with a satellite provider to offer video services and a satellite version of Broadband. This in turn will allow GC the opportunity to increased market share. By providing the consumer with a more diverse product to choose from, GC will be able to gain a competitive edge in the market and garner new customers in the process.

Another opportunity found is the chance to cut unit cost by outsourcing the call center to India or Ireland. This move will allow GC the chance to become a key player in the global arena. It will also provide GC with a labor force that is technically advanced to meet the needs of a growing market at a lower price (Rossheim, 2006). The combination of all of these opportunities will provide GC with the much needed profitability capabilities to sustain its operations for the next three years as well as produce a higher yield for stockholders.

Stakeholder Perspectives/Ethical Dilemmas

When there is an opportunity for change, there must be an evaluation of the various entities that these changes will affect. The Senior Leadership Team’s interest in the strategic change management that they are trying to accomplish is to increase the market share both domestically and globally by creating technological advances, while cutting cost in order to make a profit and increase the yield for shareholders. From the perspective of the Union officials, their stake in this move is the retention of the jobs and benefits of the current workforce. The employees wish to continue to work for the company that they have shown loyalty to by conceding to the changes in the education and health benefits. The consumers’ stake in the changes is the chance to have a better product at a competitive price. The shareholders primarily want a high yield on their investment.

The ethical dilemmas that faces the GC Leadership Team is that in order to proceed with the changes that they want to make it will lead to possible displacement of the current workforce with the outsourcing of the call center to India and Ireland. This change could also cause a consumer backlash due to the possible downward economic impact the loss of jobs to offshore centers would create. Another major problem present for GC is the cultural barriers that would be present with offshore call centers. Other companies have tried this approach and have had to return the call centers their previous locations due to a lack of cross-cultural knowledge on the part of call center workers in relation to the consumers they served. (Stones, 2003).

The dilemma for the Union is one of whether or not to bring litigation upon GC in order to protect the constituent they serve. Recent legislation in the UK provides individual shareholders the right to sue directors for their management decisions as it relates to problems that may arise as a result of outsourcing. (Clark, 2005). While this decision is recent and may not stand up in the American legal system, the Union could tie GC up in legal proceeding that could prove to be time consuming and costly. Another dilemma that the Union faces is integrity issues with the members they represent. The membership was led to believe, through the influence of Maria Antez, Vice President of the Union that by agreeing to the concession proposed the new contract would sustain GC and protect their jobs. The employees face distrust of both the Union and GC in that the information concerning the strategic initiatives was not communicated to them in a timely manner and that they were not included in the decision-making process.

Problem Definition (Step 2)

The problem for GC is one of how to gain a technological edge, cut cost, increase market share to increase profits for both corporate and shareholders while maintaining the current loyal workforce.

End-State Goals (Step 3)

The end-state goals of this situation that Global Communication is working through are tangible. At the end of three years GC will be have an increased market share, with a high yield on stock offerings and corporate profits. GC will have a continued presence in the global market and a sustained partnership with the satellite provider in addition to other technological advances that will support the domestic workforce.

Conclusion

In conclusion, the strategic initiatives that Global Communications wants to implement may not make all of the stakeholders happy. The decisions made concerning the future of GC must address the overall needs of GC on the basis of sustainability. GC has an obligation first to its Board of Directors, shareholders and customers to provide the best product possible while increasing profitability.

References

Clark, Lindsey. (2005).Law could leave directors liable for their company’s IT decisions. Computer Weekly.p5-5 1/4p. Retrieved April 28, 2006, from EBSCOhost database.

Gincel, Richard. (2005. Plotting Your Future in the Global IT Job Market. InfoWorld. Vol. 27 Issue 27, p28-33, 6p 1c. Retrieved April 28, 2006, from EBSCOhost database.

Rossheim, John. (2006). The Great Jobs Migration. Business Credit, 108(4), 31-31. Retrieved Thursday, April 27, 2006 from EBSCOhost database.

Stones, John. (2003). PASSAGE TO INDIA. (Cover story). Marketing Week (UK), 26(50), 24-27. Retrieved Saturday, April 29, 2006 from the Business Source Complete database.

Table 1

Issues

Issues

Dwindling stock prices • GC has faced over 50% reduction in stock value

Inability to effectively compete in marketplace • Too much competition from local telephone and cable companies

Downsizing of Domestic Call Center • Loss of jobs in the domestic market

Loss of Consumer Goodwill • Sending jobs away from American shores in order to turn a profit could alienate possible consumers

Litigation from Union • Union could fight outsourcing through legal means.

Table 2

Opportunities

Opportunities

Increased Technical Sophistication • GC could compete more effectively in the global market

Increased Technical Sophistication • Partnering with a satellite provider to offer video services and a satellite version of Broadband

Increased Market Share • Provide a chance to gain new customer base

Reduction of Unit Cost • Increase Profits and better pricing for consumer.

Increased Profitability • Potential for higher yield for stockholders

Table 3

Stakeholder Perspectives and Ethical Dilemmas

Stakeholder Perspectives and Ethical Dilemmas

Stakeholder Group Interests, Rights, and Values Ethical Dilemmas

Senior Leadership Team • Protect Market Share

• Make Changes to meet Org Goals

• Make a Profit

• Increase Global Presence • Changes will eliminate domestic jobs

• Consumer backlash

Union Officials • Retaining jobs for employees • Inclusion in decision-making process

Employees • Continued employment, Company loyalty • Processing changes management

Consumers • High quality product that meets needs at a low cost • Choosing a carrier who uses outsourcing

Table 4

Evaluation Matrix

Goals

Evaluation

Matrix:

Global Communications

Alternatives

35 % increase in

market share

Increased

Global

presence

Sustained partnership

with satellite provider

Technological

Advances

Retain

current stakeholders

#1

Follow through with outsourcing & strategic alliances only (+2) Will lead to increased market share through growth of business (+2) Increased global presence with outsourcing call centers to India and Ireland. (+1)Partnership with satellite provider will be maintained due to dependence on partners technology (+2)Tech gains obtained through outsourcing and partnership (-1)May lose goodwill of customers. Retain stockholders

May loose domestic employees to competition.

# 2

Strategic alliance without outsourcing and intrepreneurships (+1)Could lead to increased market share due to partnership with satellite provider (-1)May or may not be a global player without outsourcing. Chances are they will not. (+2)Partnership retained due to satellite providers technology (+1)Benefit from partners technology. (+1) Retain customer base. May lose some shareholders if profits do not increase.

May retain

domestic employees.

#3

Development of intrapreneurships

with strategic alliances only (+2)Will lead to increased market share (0)No real effect on global presence (+1)May retain partnership if cross-functional teams run across company lines. (+1)Tech advancements developed internally and externally. (+2) Increase in customers with new technology. Could increase stockholders and domestic employees.

# 4

Development of intrapreneurships without alliances and outsourcing (0)Will not lead to any change in market share alone. (-1)Will not add to global presence. (-2)No partnership will be formed. (+1)Tech advances will be gained by domestic employee efforts. (+1)Gain customers with new technology. Could lose some stockholders waiting for development of new technology. Retain domestic employees.

#5

Development of intrapreneurships with strategic alliances and outsourcing

(+2)Significant increase in market share with combination of all three. (+2)Significant increase in global presence with relocation of call center and new technology. (+1)May outgrow partnership over time due to internal advances. (+2)Technological advances from all three avenues. (+1)May lose some customer goodwill through outsourcing. Retain and gain new stockholders with increased profits from tech advances.

--

Table 5

Risk Matrix

Outcome Probability Consequence

# 1

Follow through with outsourcing & strategic alliances only Medium-GC could increase profitability and global presence GC would lose customer goodwill and possibly lose employees to competitors. Possible litigation from Union.

#2

Strategic alliance without outsourcing and intreprenuerships Low-GC could gain technological advances, but through someone else’s product. GC would retain employee, but not make any real strides toward globalization. Remained tied to Satellite provider for success.

#3

Development of intrapreneurships

with strategic alliances only Medium-GC could gain technological advances through partner as well as internally. GC would retain more technically advanced employees and move others to customer call centers with retention bonus. Possible increase globalization. Increase in market share as well as profitability.

#4

Development of intrapreneurships without alliances and outsourcing. Very Low-GC could gain new technology internally, but not may not be immediate. May lose more money in this venture. GC would have a technological advance down the road and retain some employees and avoid litigation from the Union.

#5

Development of intrapreneurships with strategic alliances and outsourcing

High-GC could reach its goals of stakeholder retention, retention of strategic alliance, increased globalization and profits, and technological advances. GC would be successful with sustaining growth of business while increasing global presence

Table 4

Goals Based on Stakeholder Needs

Alternatives Scale:

-2 = negative impact

-1

0 = neutral

1

2 = positive impact

Increased

market share

Increased

Global

presence

Sustained partnership

with satellite provider

Technological

Advances

Retain

current stakeholders Totals

25% 25% 15% 20% 15% 100%

Alternatives

#1

Follow through with outsourcing only (+2) Will lead to increased market share through growth of business (+2) Increased global presence with outsourcing call centers to India and Ireland. (+1)Partnership with satellite provider will be maintained due to dependence on partners technology (+2)Tech gains obtained through outsourcing and partnership (-1)May lose goodwill of customers. Retain stockholders

May loose domestic employees to competition.

# 2

Form strategic alliance (+1)Could lead to increased market share due to partnership with satellite provider (-1)May or may not be a global player without outsourcing. Chances are they will not. (+2)Partnership retained due to satellite providers technology (+1)Benefit from partners technology. (+1) Retain customer base. May lose some shareholders if profits do not increase.

May retain

domestic employees.

#3

Development of intrapreneurships

(-1)Return on this option may not be immediate enough to help (0)No real effect on global presence (-2) This alternative diminishes the need to form alliances for tech advances (+1)Tech advancements developed internally (+1)Gain customers with new technology. Could lose some stockholders waiting for return on development of new technology. Retain domestic employees.

Second Tier

#4

Development of intrapreneurships with strategic alliances and outsourcing

(+2)Significant increase in market share with combination of all three. (+2)Significant increase in global presence with relocation of call center and new technology. (+1)May outgrow partnership over time due to internal advances. (+2)Technological advances from all three avenues. (+1)May lose some customer goodwill through outsourcing. Retain and gain new stockholders with increased profits from tech advances.

Table 5

Risk Assessment and Mitigation

Risk Assessment and Mitigation

Alternative Risk Consequence Mitigation

• • •

• • •

• • •

• • •

Table 6

Pros and Cons of Alternative Solutions

Alternative Pro Con

Table 7

Implementation Plan

Action Item Timeline Who is Responsible

1.1.1 Hire Technology Design and Marketing Firm

1.2

1.3

:

: Have firm hired by May 2005; Complete November 2005.

Chief Technology Officer

Table 8

Evaluation of Results

End-State Goals Measure Results 5 Years later



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