Global Communications Problem Solution

Running head: GLOBAL COMMUNICATIONS PROBLEM SOLUTION

Global Communications Problem Solution

MBA 500

University of Phoenix

Global Communications Problem Solution

Global Communications is a telecommunications company doing business in a volatile market with a high level of competition. This problem solution paper will address the issues Global Communications faces including reduced stock value, shrinking market share, breakdown in communications, and strained labor relations. Additionally, this paper will identify areas of opportunity for Global Communications to overcome these issues and regain its position as a leader in telecommunication industry.

Issue and Opportunity Identification

Currently, Global Communications is facing many issues in their day-to-day business operations. Global Communications is currently experiencing a decline in stock value; the stock has dropped by approximately 50% over a span of three years, from $28 to $11. With the stock price falling, investors are not inclined to invest in the future of Global Communications. Elevating the stock price is one of the most challenging issues facing Global Communications. The management of Global Communications recognizes there not one fix that will rectify the decline in the stock value, they will have to identify and correct the underlying issues, the stock price will then follow suit. Global Communications has decided that a new path must be chosen in order to survive. The Global management team has just gained board approval for an aggressive plan to globalize operations, create new services, reduce costs and regain market share. The plan presents many ethical challenges for upper management.

One reason for developing new services is to face the issue of increased local competition. The telecommunications industry has seen very rapid growth, especially during the late 1990s during this time the telecommunication companies invested very heavily in transmission capacity. (United States Department of Labor, 2005) This increase in transmission capacity has allowed local television cable companies to offer their own telecommunication services packaged with standard cable offerings. This competition has reduced the revenue and market share that Global once enjoyed. Global Communications can counteract this trend by being innovative in the telecommunications field once again and offering better and more exciting services. In an effort to create these new innovative services Global plans on forming partnerships with satellite providers and wireless providers to offer video services as well as wireless internet services. These innovative services can provide the incentive for customers to use Global as their telecommunications provider and help Global regain market share.

Global is also undertaking cost cutting measures in order to maximize profits. As part of these cost cutting measures, Global is looking to outsource its technical call centers to Ireland and India. Global projects this will save approximately 40% over current call center costs. Global also has the opportunity to generate additional revenue by selling the current call center real estate on the open market.

The announcement of Global's plans to move call centers overseas after Global reduced health and educational benefits in the last contract negotiations has upset the union and its representatives. Now Global is facing strained relations with the union labor and its representatives. The union believes that the management of Global did not negotiate in good faith in the previous contract. The outsourcing of call centers will cost many employees their jobs. Global management has stated that some of the employees can be relocated to the new call centers. However, due to the tighter operating budget in call centers, the employees who transfer will be expected to accept a 10% reduction in salary. The announcements of layoffs are likely to be a drain on employee moral. An additional concern with the outsourcing to foreign countries is the cultural difference. Global's plan does not address language barriers with non English speaking natives, nor does it take into consideration customer concerns with service being provided in a foreign environment. Additionally, with this plan possible for Global to experience a loss of customer base due to resentment over their decision to outsource.

However, Global can use the issue as an opportunity to get the remaining employees excited about the future. Employees will be afforded the opportunity to work internationally. They will have the chance to learn and experience things many never experience in their lifetime.

Although Global Communications is facing numerous issues, many new opportunities can be found during this time. One example is the opportunity to enter new market sectors and gain new customer base with satellite providers. As noted previously, Global's outsourcing plan creates a cost savings but in addition it creates the path for sustained growth. The technical sophistication Global plans to realize by transferring call centers also may produce benefits such as innovativeness and efficiency. If this opportunity is realized it could be another source of generating revenue and increasing profitability. Finally, if Global Communications can sell their plan to the investors, they can generate interest in the stock. Potentially, investors may see the low price as a purchasing incentive and be willing to invest in Global's future. This increased activity and interest will in turn drive up the stock price, increase cash flow and generate acceptance of their growth plan.

Stakeholder Perspectives/Ethical Dilemmas

The primary stakeholders at Global Communications can be broken into four primary groups. Identified below are the key stakeholders and their interests in Global Communications. Katrina Heinz is Global's Chief Executive Officer. Her primary objective is improving stockholder and consumer interest; increasing employee satisfaction and returning the company to it's previously market strong profitable state. Her plan to achieve these goals is through globalization and the introduction of new services. Nancy Everhardt, also a member of upper management, is the Executive Vice President of Small Business and Marketing Sales. Her background is in innovation, something Global Communications has been lacking. Sy Rodriguez is the Executive Vice President of Consumer Marketing and Sales. Included in the upper management team, he is one of the most tenured employees