Problem Solution Global Communications

Problem Solution: Global Communications

Global Communications (GC), like all other telecommunications companies, has fallen out of favor on Wall Street due to poor revenue growth and return on investment for shareholders. Inability to grow revenues is mainly due to increased competition. GC's initial plans to remedy the problems were to develop new services and hire 1000 new salespeople paid for by outsourcing their small business call centers overseas. The call center outsourcing plan and the subsequent effects on labor relations and public opinion brought negative press and has affected relations with the Technology Workers Union and employees. Furthermore, the union was not represented in any of the planning stages of this idea. As a result of these issues, the employees and the union are very unhappy about the plan and the resulting loss of jobs and corporate commitment to the employees. A loss of productivity, morale and bad publicity threaten to derail the company's business plan.

GC is not the first business to face such difficult issues. Many other companies have successfully dealt with similar issues in the past. This paper discusses a solution to both the profitability issue and the employee relations issue. Successful incorporation of the following plan will reinvigorate GC's profitability and increase shareholder value while restoring validity to GC's motto, "Our edge is people."

Situation Analysis

Issue and Opportunity Identification

Increased competition in the telecommunications industry led to a decrease in confidence on Wall Street in the ability of the industry to continue growing. Over the past three years, this lack of confidence resulted in a 50% decrease in the stock price of GC. Some growth was found in the expansion of services offered, such as new local and long-distance suites and calling features, but these gains were soon lost when local cable television companies recently broke into the communications business and took much of this increased growth. Attempts to increase revenues by moving into international markets produced mixed results. GC must grow revenues and decided to provide new services garnered through an alliance with a satellite provider and a wireless provider to increase their revenues. The new services will be marketed and sold by 1000 new salespeople. In order to pay for these new hires, the company plans to outsource their business call centers, which will result in layoffs or relocations with 10% pay cuts for many workers. The outsourcing plan did not sit well with the Technologies Workers Union whom, during the last contract renewal, made substantial concessions on education and health benefits to aid the company's profitability. GC must increase revenues in order to raise its stock price to acceptable levels for the shareholders in order to continue operations on its own while maintaining employee morale and productivity (University of Phoenix, 2006b).

Stakeholder Perspectives/Ethical Dilemmas

GC management faces ethical dilemmas with respect to its need to increase revenues and reduce the cost of doing business while simultaneously maintaining a stable and productive work environment for their employees. The labor union already made concessions to the company in the form of a 20% reduction in education and health benefits during the last round of contract negotiations. This concession was a goodwill gesture on the part of the employees in order to ensure future growth and job security. The current management plan to outsource the Small Business Call centers overseas in order to hire 1000 new salespeople is contrary to their ethical obligation to the employees to provide job security.

GC employees desire job security and a feeling of being appreciated for the work they do. The layoffs and relocations being conducted by the company make the employees feel like pawns in a businessman's chess game, manipulated by a higher power to achieve an objective. The employees want to do a good job but they want to be treated fairly. Having just made sacrifices during their last contract negotiations, the employees feel betrayed and unappreciated.

The shareholders demand growth in their investment and they also have a desire to invest in a company that treats its workers fairly and with dignity. The latest negative press about GC will negatively affect the company's image and ability to hire the successful sales force required to pursue this aggressive business plan.

Problem Statement

GC will enhance shareholder value by developing more effective generic benchmarking practices. GC will scour the best available business practices to find and implement the most effective techniques for maximizing revenue growth while minimizing expenses. GC will also identify and implement the most effective organizational communication practices in use today to repair and maintain employee relations and job satisfaction. Restoring credibility to GC's "Our Edge is People" motto will enable GC to return to a leadership position in the telecommunication industry.

End-State Vision

A more robust GC will emerge from this plan. With more services to provide to customers the increased revenue opportunity will enable the company to consistently maintain revenue growth in good economic times and still be able to survive periods of slower economic growth. GC will lead the industry in employee morale and productivity by maintaining effective communications and a positive work environment where employees feel like they make a difference and are appreciated. Shareholders will feel good about owning a company where they would like to work and this feeling, combined with a more positive balance sheet, will translate into a higher than industry average return on investment for them.

Alternative Solutions

There are three problems to be addressed by GC. First, expenses must be minimized. Next, GC needs to increase revenue. Finally, GC must repair and improve employee relations to enable the solutions put in place for increasing revenue and reducing expenses to be effective in the long-term.

Minimizing Expenses

One possible solution to reduce expenses is the one currently proposed by management. GC can outsource the small business call centers to Ireland and India and close the domestic small business call center (University of Phoenix, 2006). Transferring call center operations has some trade-offs though, as recently discovered by the Powergen Corporation. BBC News (2006) noted "...the firm said it was "not prepared to achieve savings at