Problem Solution - Global Communications

PROBLEM SOLUTION: Global Communications

Problem Solution: Global Communications

Student Name

University of Phoenix

Problem Solution: Global Communications

Global Communications is facing dwindling profits as the result of too much competition. This issue is further complicated by shareholder demands for increased returns, employee needs for higher wages and better benefits, and customer expectations for greater technical sophistication at lower costs. Company leaders have developed an aggressive strategy that will diversify their current bundle of products and services offered and allow them to penetrate international markets in an effort to become a truly global corporation. This is not expected to go without challenge from union management. At this time, Global Communications must develop a list of reasonable alternatives, weigh their pros and cons, mitigate their risks, select an alternative, and successfully implement its chosen solution. To gain the buy-in for this solution from all stakeholders involved, Global Communications must also act quickly, communicate effectively, and execute decisively.

Describe the Situation

Issue and Opportunity Identification

The challenges faced by Global Communications are numerous and will not easily be overcome. The telecommunications industry as a whole has experienced many dynamic changes that have forced companies to seek immediate and sustainable solutions or succumb to an inevitable extinction. Global Communications is no exception as they face economic pressures from their shareholders to improve diminishing returns and seek alternatives to differentiate themselves as an industry leader in their ever increasingly competitive market.

Increased competition by local, long-distance, cable providers and international markets has led to lower profitability. To compete with these new entries into the telecommunications segment, Global Communications must identify new products and services that will appeal to a broader range of consumers. Entering a partnership with satellite and wireless carriers could boost their suite of products that they are able to offer. This change of focus will improve sluggish sales and generate greater profits.

Recent union negotiations and labor contracts have resulted in higher labor costs. Although Global Communications rallied the support of the union to cut health and education benefits by 10%, they still continue to struggle with over inflated wages and benefits. Lowering labor costs will help them to boost profitability. To accomplish this, they will outsource many of the technical jobs that currently support small business owners to India and Ireland where labor costs are much cheaper. Moving technical call centers outside of the US will reduce unit costs for handling calls by as much as 40%. A portion of the eliminated US domestic jobs can be introduced into the growing consumer centers that make an average of 10% less than their technically trained peers. Outsourcing to India and Ireland will further be a win for Global Communication consumers as they will then be able to increase the level of technical sophistication that is currently being provided to them.

Downsizing domestic call centers will unfortunately lead to job losses and salary cuts. These layoffs will further cause major morale issues and negatively impact the productivity of its remaining employees. Global Communications needs to gain the commitment of its workforce to support this strategic plan. Long term this commitment will assist them with growing the company and improving profitability. This strategy will ultimately benefit its remaining members with higher salaries and more career opportunities. In addition, the move of technical call centers to India and Ireland as well as the aggressive expansion into other global markets will offer the possibility of interesting assignments and overseas travel to remaining workers. Further, marketing internationally will lead to added returns for shareholders, improved bonuses for employees, and increased industry recognition for the company.

If this new strategy is not communicated effectively, Global Communication's workers will experience emotional dissonance. This conflict between true and perceived emotions will lead to job burnout, stress, and dissatisfaction. (McShane & Von Glinow, 2004) Competitors will view this drop in job satisfaction as an opportunity to recruit some of Global Communication's best people. In the face of such huge job cuts, it is paramount now more than ever that the company shows its remaining workers appreciation and value. Global Communications will need to remind employees that their truly sustainable advantage has been and will continue to be the loyalty of its workforce. In order to emerge as a stronger, more successful company and industry leader, they are counting heavily on the support of its remaining workforce. Global Communications will need to tell them the truth swiftly and openly and share the complete strategy so they understand why this is happening. This is what these workers have become to depend on.

When Global Communications completes their restructure, the question remains what to do with current call center real estate. The company will still be forced to carry the unused facilities on the books, further draining profits, until they can be sold or converted to other uses. Conversely, they may realize this as an opportunity to convert property into cash flow to give them extra funding to penetrate international markets and obtain their objective of globalization sooner than anticipated.

Stakeholder Perspectives/Ethical Dilemmas

No decision is made in a vacuum. In most situations there exists a conflict between stakeholders that ultimately creates ethical dilemmas. Global Communications is just such a case. Company shareholders value increases in profitability in order to realize a greater return on their investment. They have made an investment in Global Communications and they have the right to a fair monetary gain from these expenditures. Simultaneously, employees place a high value on being rewarded. They have the right to receive fair compensation and benefits for their work. During this time while the telecommunications