Global Communications Problem Solution
Essay Preview: Global Communications Problem Solution
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In order to accurately assess Global Communications situation, a concise analysis of the Companys current situation must occur. Following the factual statement, I will present the challenges and opportunities that Global Communications faces. Flowing from these challenges and opportunities, I will develop what the end state goal might look like, present a potential problem statement and at least three quantifiable goals that may flow from the resolution of the problem statement. After that, I will analyze the alternative solutions and describe the optimal solution which, in my analysis is a hybrid solution involving outsourcing, a new tax basis for Global Communications, and a re-training of its current empoyees from customer service employees to sales people of the new bundled service created from the strategic alliance with the satellite provider
Situation Background (Step 1)
Global Communications (hereinafter GC) is a heavily regulated telecommunications company that provides local and long distance services to consumers and small business customers within the United States. This market is highly competitive and with cable companies entering the plain old telephone service market (POTS), and bundling that service with high speed internet and wireless access, Global Communications is losing market share. Their market share losses are evident in the declining stock price: GC,s stock has dropped from $28.00 to $11.00 in three years. To rejuvenate the company, GC stakeholders and management developed a two prong approach: 1) realize growth through strategic alliances with satellite providers to offer a bundled service consisting of POTS, video, broadband and wireless access and 2) reduce costs by shifting many of its customer service positions to less expensive consumer call centers within the US and create overseas call centers to reduce costs. The board approved these measures and is looking for the strategy to implement this without tarnishing GCs image with its consumers, small businesses, and union employees.
Issue Identification
A)The Union has already taken concessions in previous negotiations and is faced with heavy layoffs when the outsourcing is implemented unless a solution is provided to combat the huge layoffs. Currently the Company sees reducing employee pay by an additional 10 percent and offering mimimal relocation to those who wish to keep their jobs and transition from small business to consumer centers.
B)The telecom industry is heavily regulated and consequentially heavily taxed. The fact is that Global Communications operates as a telecommunications company who uses traditional POTS and PBX technology which is heavily taxed. In fact all companies in this arena are required by regulation to pay into the Universal Service Fund and an additional federal excise tax that internet based companies do not face because the technology utilized in VoIP does not need to use a public switched telephone network (PSTN).
C)GC lacks a seamless product(s) to offer its consumer and small business units that can compete with the cable industry. This issue is also clear. While GC has in the past bundled suites of services for local and long distance services, the cable and satellite industry can offer technologically advanced wireless services and networking solutions that GC cannot.
D)After the outsourcing is complete GC will be left with empty real estate with no foreseeable use. Although GC has identified the need to outsource and the board has approved the outsourcing to Ireland and India in an effort to reduce costs by 40%, Global Communications will be left with buildings formerly used as call centers. Call centers are typically large office space buildings on multiple floors but not what would be considered “hi-rise.”
E)GCs philosophy of “Our Edge is People,” is compromised when the layoffs occur. The Company has many union employees, most of whom have already agreed to a 20% reduction in health and education benefits. This coupled with the fact of outsourcing further reduces the employees and generates negative morale. In addition, in order to meet the Companys growth expectations, the company needs to hire 1000 sales people.
Opportunity Identification
A)By outsourcing to India and Ireland, Global Communications can reduce its operational costs in servicing its customers by 40%. The cost reduction comes from the lower cost of operating outside of the U.S. Not only are foreign call centers cheaper to operate but the labor force in other countries is considerably less.
B)By switching part of its business model away from heavily taxed telecommunications lines to less regulated IP based solutions such as VoIP,. GC can reduce its tax burden and shift into a new business. Even if regulation of VoIP is on the way, offering a scalable wireless product including VoIP would create new business opportunities for GC.
C)GC through its satellite alliance can bundle a new product to its consumers and small business customers. That product will add value to GCs customers while growing its business GC could benefit from the satellite alliance and bundle their new product to their current small business and consumer customers. Eventually, GC could develop an entire communication suite to offer large businesses a scalable comprehensive communications product.
D)The empty real estate can be used initially as a training center to all employees who would be facing layoff. After the new 1000 person sales-force has been effectively trained, the real estate can be used for office space for the sales-force including consultants and project mangers for the newly created IT based consulting services.
E)After completed training,GC can reinvent its motto not only to reinforce the “Our edge is People” concept, but to add into that concept the highly skilled sales-force it possesses.
Stakeholder Perspectives/Ethical Dilemmas
In order for GC to regian a competitive advantage in the telecommunications industry and beyond, it must reinvent itself. It can achieve this by either laying off its US workforce or by training them into the 1000 member sales force it needs to acquire. The key to identifying the stakeholders rests within this conception. The major stakeholders are the majority shareholders, presumably some of whom are union employees, and non-shareholder nonunion employees, The ethical dilemma GC faces is whether to lose its valued employees and as a result, customer companies who believed that GCs “edge is their people,” and tarnish the