Global Communications Gap Analysis

There are risks with any business venture. The marketplace is so unstable that a company that seems to be flourishing one day can fold in a short period of time. It is important for management and/or leadership to stay abreast of any technological advances, new services, etc. in order to remain competitive. Simply keeping up with the competition will no longer provide the results needed to secure a place in industry. Top companies tend to have a creative edge that separates them from their competition.

With the continual advent of new telecommunications services and technologies, the telecommunications industry is becoming increasingly competitive. Cable companies, able to provide customers with complete communications solutions, have taken a great deal of business from the telecommunications industry. And although Global Communications was, as recently as three years ago, thriving with stocks trading for $28 per share, this company has also fallen prey to the competition.

In response to the financial distress that has resulted from the overwhelming amount of competition, Global Communications' senior leadership has developed a restructuring plan to revitalize the company. This plan, which will call into question the company's ethical standards, must be implemented in excellence because the integrity of Global Communications is at risk.

This analysis will evaluate the ethical dilemmas that have surfaced in response to the new plan, how well Global's senior leadership has communicated the plan, which groups or individuals have an interest in Global, and how well the plan will be received by others.

Situation Analysis

Issue and Opportunity Identification

Global Communications stocks have depreciated by more than 50% over the past three years and are now only worth $11 per share. The amount of competition Global Communications faces has increased tremendously. In order for Global Communications to continue to survive in the telecommunications industry, the company must offer new, attractive services and find ways to cut costs and increase profitability.

In an effort to make this much needed company revitalization a reality, senior leadership has put together a restructuring plan that will include offering new services such as 24-hour internet access using wireless telephone or PC cards to its small business and consumer customers. To cut labor costs, Global Communications will move some of its technical call centers to India and Ireland. Outsourcing this labor will allow Global Communications to reduce the costs for handling calls by almost 40%. This will be a substantial savings for the company. However, because of the plan to outsource, thousands of current domestic employees will inevitably lose their jobs. Some will be allowed to relocate to other domestic call centers, but will have to take a 10% pay decrease.

Senior leadership thought that it was in the best interest of the company not to mention the proposed plan to anyone until it was approved by the board. However, senior leadership failed to realize the importance of discussing this proposed plan with the worker's union in advance to putting it into motion. This non-communication has strained the relationship between Global Communications and the workers' union.

Global Communications is in a place of desperation. If changes are not made quickly, the company will not survive.

Stakeholder Perspectives/Ethical Dilemmas

Perhaps the most important stakeholder in any company is the one who has funded the business venture. Global Communications investors are understandably less than happy that the company's stock has depreciated by over 50%. The company is under pressure to recoup itself and take its place as a successful entity in the telecommunications industry.

Global Communications employees and the workers' union are also very much vested in the company. In an effort to support the long term growth of the company, employees recently gave up 20% of their health and education benefits. Their sacrificing of these benefits is evidence that they are concerned about company growth and job stability. The workers and workers' union feel that is unfair to outsource jobs because of the rescinding of the benefits.

To the same end, senior leadership is working to ensure that Global Communications heads in a direction that will allow the company to increase profits by offering better products and services and cutting costs. If the company is not revitalized in the marketplace, their jobs are stake as well.

Global Communications senior leadership must decide which group of shareholders has more vested interests in the company? Is it more important to implement this new plan in an effort to quickly resolve some of the company's financial issues or to act in the best interest of the many company employees who face the possibility of unemployment? Was it ethical for senior