Global Communications Problem Solution

Running head: PROBLEM SOLUTION: GLOBAL COMMUNICATIONS

Problem Solution: Global Communications

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University of Phoenix

Problem Solution: Global Communications

Once a leader in the telecommunications industry, Global Communications has fallen on hard times due to increased competition. Three years ago Global Communications stock traded at $28 per share. Global Communications stock price has now dropped more than 50 percent and is now trading at $11 per share. In an attempt to increase profitability, the company has alienated the union and created possible issues with other stakeholders. The union is citing contract manipulation and has spoken out against the strategy stating that Global Communications failed to look at the union as a partner and Global Communications should have evaluated other options before deciding to send union jobs overseas. The union is threatening legal action.

Global Communications has developed a two-step approach. First they plan to grow by introducing new services to small business and consumer markets including local and long-distance telephone, video services, satellite broadband, and wireless internet access. Second the company plans to reduce costs to by outsourcing technical call centers to India and Ireland. In order to address this gap, senior leadership at Global Communications must employ effective communications techniques and address the issues and values of their stakeholders. This analysis examines Global Communications' current situation, issues and opportunities, and the stakeholders' perspective.

I have outlined the issues and opportunities that Global Communications will need to

address in table 1.

Situation Analysis

Issue and Opportunity Identification

Once a leader in the telecommunications industry, Global Communications has fallen on hard times due to increased competition. Three years ago Global Communications stock traded at $28 per share. Global Communications stock price has now dropped more than 50 percent and is now trading at $11 per share. In an attempt to increase profitability, the company has alienated the union and created possible issues with other stakeholders. The union is citing contract manipulation and has spoken out against the strategy stating that Global Communications failed to look at the union as a partner and Global Communications should have evaluated other options before deciding to send union jobs overseas. The union is threatening legal action.

Global Communications has developed a two-step approach. First they plan to grow by introducing new services to small business and consumer markets including local and long-distance telephone, video services, satellite broadband, and wireless internet access. Second the company plans to reduce costs to by outsourcing technical call centers to India and Ireland. In order to address this gap, senior leadership at Global Communications must employ effective communications techniques and address the issues and values of their stakeholders. This analysis examines Global Communications' current situation, issues and opportunities, and the stakeholders' perspective.

Global Communications present situation is there is too much competition. International and local markets are competing for the same business. Cable companies moved forward and provided a complete solution for their clients, wherein they included phone, television and internet as one bundled package. To stay competitive, Global Communications is looking to branch out and have its call center in Ireland and India. The union is not happy with this.

Through my research, I have found that "of the executives whose companies have launched a business-globalization initiative, 47% said the effort has paid for itself, and 24% expect payback within a year of deployment. Only 5% expect payback to take three years or more. Companies consider a variety of factors in measuring the effectiveness of their efforts, including operational costs, gross profit margins, cost of acquiring customers or clients, and improved productivity.

"As successful as business globalization has been for many companies, the survey suggests it can be even better. A slight majority, 54% of respondents, said their company would be even more successful in business globalization if it weren't limited by IT budget constraints. About the same percentage said the technology aspect of their business-globalization effort is largely limited to Web-based initiatives. With business globalization offering expansion opportunities, many companies should at least be exploring avenues such as sales to consumers and technologies that enable more efficient delivery of products and services to these growing markets." 2

Global Communications needs to prepare two specialized reports: (1) global financial benchmarks using common-size statement ratios (vertical analysis), and (2) labor-productivity and utilization measures collected across borders. With the globalization of markets, greater foreign competition, and the reduction of barriers to entry, it becomes all the more important to benchmark a company's financial indicators on a worldwide basis. By doing this, they can see, in black and white, if it is feasible to close their current call center and relocate it in India and/or Ireland.

I have outlined the issues and opportunities that Global Communications will need to address in table 1.

Stakeholder Perspectives/Ethical Dilemmas

"Indian outsourcing is proven as one of the best ways for companies to cut application development and maintenance costs, deal effectively with the peaks and valleys of software demands, and focus on more strategic work. Depending on whom you ask, anywhere from one-half to two-thirds of all Fortune 500 companies are already outsourcing to India, and, according to Forrester Research, the amount of work done there for U.S. companies is expected to more than double this year. If you're not already sending some development or maintenance work to Mumbai or Chennai, chances are you're either looking into it or your CFO, salivating over potential labor cost savings of 70 percent, is wondering why you aren't."1

But despite its popularity, successful outsourcing