Problem Solution: Global Communications

Running head: PROBLEM SOLUTION: GLOBAL COMMUNICATIONS

Problem Solution: Global Communications

University of Phoenix

Problem Solution: Global Communications

GC has witnessed revenues diminish due to increased competition which has significantly impacted the value of the stock price. The leadership team is reacting to this problem by increasing the size of the company and GC's profit margin while minimizing operating costs which will result with an increased share value. New services through partners will be sought so further cost reductions can be achieved by outsourcing call centers currently hosted in the United States overseas to India and Ireland. What management has failed to do is related to organizational communication. GC has failed to reach out to many of the stakeholders. GC has failed to follow the Perceptual Process Model of Communication (Kreitner & Kinicki, 2004, p. 521). This lack of direct communication has caused the employees to rely on the "grapevine" for information (McShane & Von Glinow, 2004 p. 345). Although this can be beneficial in certain instances, the grapevine has caused employees to become uncertain of their futures because of off shoring rumors. Workers believe that they are now faced with either job losses or a reduction in salary; employee morale is at an all-time low. GC did not follow steps to ensure that the purpose and impacts of international outsourcing were understood. The stakeholders were not effectively involved. The Technology Workers Union was not involved in the decision process and is now threatening to take legal action. Communication has failed to occur at several levels of the organization. GC must act quickly to solve the present situation.

Situation Analysis

Issue and Opportunity Identification

Competition is smothering Global Communications. GC is becoming lost in the noise within an industry they helped pioneer. Cable companies and other telecommunication providers are attempting to capture the same market. Shareholders are beginning to perceive that the industry as a whole may become unfavorable as an investment and GC low earnings has helped fuel this ill fated perception as the company's stock price continues to drop. To further frustrate the situation, the Technology Workers Union has expressed an interest in ensuring that the GC employees are protected and cared for in a fair and reasonable manner. The union has iterated that they have the right to be involved in the company as outlined by law & other contractual agreements. The union values the social responsibility for GC's employees as well as the promotion of the union. If the union seeks legal action because of their concern about the plans to reduce costs by outsourcing their call centers to cheaper sources of labor in foreign countries it could impact the company as a whole causing stock prices to continue to drop.

GC is concentrating on the growth of the company through the introduction of new services. They are partnering up with several companies to expand into video and wireless services. GC ultimate goal is to offer customers Internet access using wireless telephone and PC cards. If the share holders like the cost cutting plan, stock prices would eventually begin to regain some of the lost value. Many companies have discovered that well-educated English-speaking workers, located outside the U.S. borders, come cheaper than within the U.S. Outsourcing the call centers to these lower labor cost markets it will provide GC with the cost savings necessary to allow the company to grow quickly. Outsourcing is not going to come easily. Global Communications did not gain the support needed from the Technologies Workers Union.

The decisions made by the management group were implemented without considering the effect this would have on the stakeholders. This apparent lack of emotional intelligence threatens the newly adopted business plan if the union is not included in some way.

Stakeholder Perspectives/Ethical Dilemmas

There are numerous stakeholders with vested interest in Global Communications. The first stakeholder is the Global Communications Senior Leadership Team. The team has interests related to the expansion of the organization into new markets while creating alliances & partnerships with other providers. Although the team's main objective is to develop GC into a global resource, increasing the size of the company and GC's profit margin will require more than just outsourcing labor. Off shoring jobs is no new idea. Forrester Research estimates that by 2015, 3.3 million services industry jobs in the USA and $136 billion in wages will move offshore to countries like India, Russia, China and the Philippines. Consulting firm McKinsey says 400,000 jobs have been off-shored, and off-shoring will grow as much as 40% a year the next five years (Krantz, 2004). The leadership team should be allocated the right to increase revenue and profits by developing business plans that will modify the organization so the vested interests will be realized.

Technologies Workers Union possesses interests in ensuring that the employees are protected and cared for in a fair and reasonable manner. The union has the right to be involved in the company as outlined by law & other contractual agreements. The union values the social responsibility for GC's employees. GC should develop a plan that would reduce headcount by attrition and voluntary separation programs. To avoid the termination of dedicated employees, GC could utilize them in other functional departments. Hewlett-Packard first attempted a voluntary pay cut when outsourcing became necessary, however, while they were indeed able to save money, the lay offs were still necessary (Anders, 2003). AOL offered their employees two months severance pay along with career counseling to assist in job seeking (Hosley, 2005). If a partnership is promoted with the union, a legal battle, that will draw more bad media, could be avoided.

Global Communication employees exhibit interests in their positions within the company, their salaries, & their ability to influence change. The employees bear the right to receive equitable compensation for the work produced and others guaranteed by law. Employees demonstrate values like placing organizational goals before personal goals & integrity.

Stock Holders interests are directly related to the success of the company