Global Communications

Situation Analysis and Problem Statement

The competitive nature of the business world we live in has driven many telecommunication companies into making less than desirable profits. These companies face competition from all over the globe. All these companies are competing for the local and long distance markets, as well as the internet. With the introduction of cable and internet companies into the mix of telecommunications in recent years, the market is more competitive than ever. Undeniably, the pressure from other companies has caused one of the telecommunications companies, Global Communications to rethink their approach to the market.

Situation Background (Step 1)

Global Communications is a telecommunications company that has seen the value of its stock decrease more than 50% over 3 years from $28 to today's value of $11. With all the competition they have, they must find ways to increase the stockholder's confidence and bring the company back to the economic prosperity they once showed. They are unable to waste any more time and need to make changes now.

Global Communications established a plan to work their way back up the ranks. First, through the introduction of new services to its small business and consumer customers and an alliance with a satellite provider to produce video and broadband services, Global Communications will be able to compete in the global market. In addition, they are looking to a cost-cutting initiative to improve profits. As a result, making this plan work will have many consequences. Nevertheless, showing the benefits of this plan outweighing the consequences might be the hardest part.

Issue Identification

There are five issues at stake with Global's plan:

Education and Health Benefits Reduction

The employees recently agreed to a 20% cut in their health and education benefits

Outsourcing to India and Ireland

The issue is making the move to another country and relocating employees and their families. Also, there is a need to layoff workers to make the move.

Salary Cutbacks

An average 10% pay cut for employees moving overseas will be made to offset the smaller budget.

Morale

By asking for a pay cut and laying other workers off the company is in a precarious position of trying to make the plan seem positive for all involved. If they cannot accomplish this, employees will be unhappy and the morale low leading to the next issue.

Productivity

With morale low, workers will be less inclined to perform duties and become lackadaisical in their approach to work.

Making the plan work with all these issues may not be so easy. In spite of all these issues, there are opportunities to eliminate or diminish the effects.

Opportunity Identification

There are three noteworthy opportunities with Global's plan. Within each opportunity there are details describing how the opportunity can be reached.

The three opportunities:

Competing Locally, Nationally and Globally

The alliance with a satellite provider enables Global to broaden their market.

Global Relocation of Call Centers

By relocating to India and Ireland labor costs are lowered and a reduction of 40% in costs for handling calls at the call centers.

Union and Employee Relationship

By providing in detail how Global's plan will make the company and their workers better-off within three years.

Although it may seem that the opportunities do not outweigh the issues, ultimately Global has no choice but to make a change. If they do not make something happen now, they may force the company into bankruptcy or shareholders to sell. Nevertheless, with each issue and opportunity there are ethical dilemmas the company faces in how each person with a vested interest will be treated.

Stakeholder Perspectives/Ethical Dilemmas

Global faces many ethical dilemmas in how the different stakeholders are affected by the plan. Shareholders have an interest in seeing the value of the stock rise and will sell if they feel the plan does not suit their interests. Global's responsibility to each shareholder is to prove that with their plan the company will flourish. The employees and the union are worried that if take the pay cuts and layoff workers like the plan shows, they will come off as giving in to Global's demands and not holding their ground. By recently taking a 20% reduction in health and education benefits the union would seem weak by accepting this deal. Global's plan is to make the union realize that change is needed and although, some sacrifices will need to be made that within three years Global will have resurrected itself into a worldwide telecommunications power.

The board and senior leadership team cannot allow the company to fold and must increase profits within three years. Their main dilemma is satisfying the union and making sure their product sells. The customer who buys the product is looking for the best deal possible. The only way to get a cheaper, better product and provide quality service is to layoff workers and cut costs by outsourcing. Global faces a revolving door and only by enacting the plan can they close it.

Problem Definition (Step 2)

Global Communications has to recover from the fallout of their stock over the past three years. By using the opportunity to expand overseas, Global will need three years to return the company to prosperity. In the short-term, there will be many costs associated with the plan (layoffs and pay cuts), but overall Global will be better-off in the long run. Offering incentives to workers who make the move and stick with the company over the next three years will help to alleviate the pain involved in having to layoff workers. Additionally, Global will want to make sure they achieve the end-state goals of their plan.

End-State Goals (Step 3)

Various end-state goals are associated