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Gap Analysis: Global Communications

The confidence in the entire telecommunications industry is diminishing. Stockholders are realizing diminishing returns on their investment and are having doubts about the industry?s ability to regain past levels of profitability. Telecommunications companies are experiencing losses due to high levels of competition for the consumer dollars available. Cable companies have been allowed into the market to provide a single provider solution for television, broadband internet, and two-way voice communication. The leadership of Global Communication has the challenge before them of turning the declining profits of the previous three years into gains.

Situation Analysis

Issue and Opportunity Identification

The increase in competition and the reduction in shareholder confidence has had a large negative impact on Global Communications stock value. Over the past three years, its stock price declined from $28 per share to $11 per share. This 59% loss in shareholder value minimized confidence in the company and added to the telecommunications industry?s overall financial problems.

The senior leadership team has two policy changes in the works to help turn the decline of the company around and start back on the road to prosperity. The first is the introduction of new and more advanced communication services marketed to small business and individual consumers. These include wireless internet access via phone or personal computers, video, and remote network access through a virtual private network (VPN) to their company?s mainframe. Second, the senior leadership team has identified measures that will improve profits. In support of these initiatives, the company plans to implement an aggressive marketing strategy internationally with the goal of becoming a global source of communication.

Stakeholder Perspectives/Ethical Dilemmas

Global Communication?s President and Board of Directors have several responsibilities. The primary responsibility is to the shareholders that have invested in the company and by doing so have shown confidence in the leadership of the organization to manage in a way that brings in profits. They have a responsibility to the governing laws of the country to operate the company in a way that abides by the laws that govern labor, stocks, operations, and product. They have a personal stake in the success of the company in the form of compensation. Finally, they have a responsibility to act in good faith with the employees working for them.

The senior leadership team also has several areas of responsibility. They must first of all answer to the board of directors as to how they are following the policies and goals as given by the board. They also have a personal stake in the success of the company in the form of compensation. They also have a responsibility to treat the employees fairly, ethically, and manage within the boundaries of labor law.

The union employees who make up the majority of Global Communications workforce have a responsibility to perform their assigned task in a timely and workmanlike manner to the best of their ability. They have a right to fair compensation for the work performed under the contract agreed upon between union leaders and Global Communications.

End-State Vision

Global Communications has the goal of becoming the leader in the telecommunications industry in both market share and profitability to their shareholders. To obtain that end, the relationships with the labor union, shareholders, and the board have been improved by open communication in an attitude of mutual respect and support for the perceived end state. The corporate leadership works with the union and develops labor policies that are fair and equitable to both the corporation and the employees. When change becomes necessary, open communications with stakeholders take place early in the process to impress the urgency of the need and work together to produce the desired results.

Gap Analysis

Companies must communicate in order to remain viable in today?s marketplace. Global Communications has failed in several ways to communicate and as such, is in a public relations nightmare. Management guru Peter Drucker wrote ?every organization has to prepare for the abandonment of everything it does? (McShane, 2004, p. 508). Global Communications has a communication gap between stakeholders that has created a public relations perception inconsistent with previous corporate standards. This inconsistency along with policy changes involving outsourcing and pending lay-offs has created turmoil and mistrust between the union employees and management.

The primary issue at hand is that not all the stakeholders affected by these decisions have had the chance to voice their concerns of how each party would be affected by the policy changes. Secondary is the fact that the reasons for the changes have not been fully communicated to all stakeholders. Once people understand the necessity of change, the implementation of change is much simpler. McShane (2004) wrote:

The problem is that corporate leaders tend to buffer employees from the external environment, yet they are surprised when change does not occur. Worse, they rely on contrived threats rather than the external driving forces to support the change effort. Thus, the change process must begin by informing employees about competitors, changing consumer trends, impending government regulations, and other driving forces. (p. 508)

This lack of communication has created tension and mistrust within the company. In order to have success, the management must create the sense of urgency for change in their stakeholders. In discussing the resistance to change McShane (2004) states:

In some situations, employees may be worried about the consequences of change, such as how the new conditions will take away their power and status. In other situations, employees show resistance because of concerns about the process of change itself, such as the effort required to break old habits and learn new skills (p. 506).

The management team can alleviate many stakeholder fears by openly communicating the reasons that change is necessary and exactly what is being offered to stakeholders to mitigate the impact of that change.

The next major problem facing Global Communication is the loss of intellectual capital during the planned lay-offs. McShane (2004) quoted Apple Computers chief financial officer in regard to retaining skills; ?Our main asset is human talent, and we cannot afford to lose it? (p. 25). The senior management team has agreed on offering a retention bonus if an employee