Problem Solution: Global Communications

Problem Solution: Global Communications

MBA/500

Doug Schwartz-Instructor

August 21, 2006

Problem Solution: Global Communications

In today's world, the simple idea of communication has reached unprecedented levels of sophistication. With increasing competitive pressures from other competitors in the telecommunications industry and with Global Communications (GC) stock depreciating 50% within the last three years, Global Communications and its corporate executives have devised a plan. The plan required GC to outsource several of its call centers to both Ireland and India to cut costs. With this said, layoffs are imminent and Global Communications must execute a plan for dealing with upcoming issues. Along with the outsourcing, Global Communication partnered with a satellite communication provider to provide broadband Internet access to its customers to stay at the forefront of technology with global communications.

Issue and Opportunity Identification

Global Communications is losing its position in the market share and losing stakes with its shareholders. Stock prices are steadily declining and the company is losing profits. To regain its place in the market, GC has to offer more goods and service at lower costs, which in turn will benefit the shareholders. The plan called for GC to outsource its technical supports centers to both Ireland and India which leads to potential layoffs here in the U.S. and which will alienate its employees. The layoffs will provide GC lower costs, better service quality, and are an opportunity to standardize its infrastructure to simplify its processes. Another issue is there are no communications between GC and the Technologies Workers Union whom were kept out of the loop of this decision and wants to be incorporated in all decisions that would affect its union members. With barriers of communication down between GC and the union, this allowed GC the time to formulate a plan in secrecy without external pressures on the details and implementation on their layoff plan. Finally, the President of the Union made a statement to the CEO of Global Communications. The president and the union will do everything legally possible to fight Global Communication and its decisions not to include the Union in the decision-making process.

Stakeholder Perspectives/Ethical Dilemmas

There are three primary stakeholders involved with this major decision: the stockholder, the executives, and the employees.

Global Communications (GC) is publicly traded on Wall Street and the shareholders do not like to lose money so they pressure Global Communication executives to advance the company financially by any means possible which is basically the interest of both shareholder and executives. Another interest of the executives is the results. Is the job getting done? Is GC saving money? How can GC make more money? While trying to achieve the maximum results the executives have to protect and support its employees who are represented by the union while making financially sound decisions that will benefit the company. With any company the employees want to be a valued part of the team, and not left in the dark; which leads to the interests of the employees whose main concern is their rights. They want to be heard and valued in the decision-making process, but have to understand at the same time that the company must take the necessary steps to keep it from going under.

Global Communications will once again become an industry leader by making the necessary changes to its products and services and by making the necessary realignment of personnel and by reducing costs where it is necessary.

Within the next three years Global Communications will grow into a $50 million national and international telecommunication company by providing video services as well as satellite version of broadband. This would allow the small business owner and consumers access to the Internet anytime using wireless telephone or PC card that now will be served in both the local and long-distance markets across the country. All this would be done in several phases. During phase one GC will expand their marketing and increase profits locally and long-distance with the United States by 25% within one year. Phase two, the company will expand marketing and increase international profits by 50% with one year of operations at its call centers in India and Ireland. During the third phase GC will increase salaries and benefits over the next three years. The fourth and final phase the company would implement a no-layoff policy to improve employee moral, enhanced corporate image, and increase efficiency and production.

Identify the Alternatives and Benchmarking Validation

After identifying possible solutions to Global Communications' problem, further considerations are addressed to lead to four best case solutions. First of all, Global Communications could expand their marketing and sales locally and long-distance in U.S by outsourcing. The increased use of outsourcing is attributed to its ability to reduce cost and changes in how companies do business. The need to gain competitive advantage has also provided companies with only two options of either outsourcing or to improve processes themselves. However, outsourcing can result in problems such as the difficulty of combining the goals of the company with those of the outsourcing firm. The job security of employees and unions can be affected by termination or the transfer of employees to the outsourcing firm. Aside from these, outsourcing involves more reports and upgraded communications networks. On, the other hand, it is expected that 80% of Fortune 500 companies will outsource most of their information technology by 1995. This has become standard practice in the past few years with more companies choosing to outsource various services. Successful outsourcing relationships are those that establish a partnership mentality, aware of people's needs, and have effective transition (Overby, 2001).

Another solution was to have set in place a no-layoff policy. Companies that have some form of a no-layoff policy include: Bank of America, Bell Labs, Control Data, Delta Airlines, Digital Equipment, Federal Express, Hallmark Cards, Hewlett-Packard, IBM, Levis Strauss, People Express, Procter and Gamble, 3M and Cleveland's Lincoln Electric. These firms benefit from such policies by improved employee moral, enhanced corporate image, and greater efficiency and production. For more than 50 years,