Mba 520 Problem Solution: Global Communications
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Problem Solution: Global Communications
With increased competition and product and service bundling within the telecommunications industry, Global Communications is fighting for survival in an increasingly global marketplace with more demanding and technology-savvy consumers. In just three short years, Global Communications stockholders have seen stock prices diminish by more than 50%. Stockholders are currently left with the question if Global Communications can transform itself quickly enough to survive and even thrive within the new and ever-changing economy. In response to stockholder and competitive pressures, Global Communications publicly announced that it plans to outsource thousands of its technical support call center jobs overseas to India and Ireland and a layoff is expected for those individuals who cannot relocate to other positions within the company. However, Global Communications did not consult the Union before announcing the decision to offshore call centers. As a result, the Union has positioned itself against Global Communications in the press and is even threatening legal action. This gap analysis reviews Global Communications current sticky situation, the issues and opportunities present, and all impacted stakeholders perspectives. This analysis concludes with the desired end-state vision along with concrete end-state goals, and the gap between the desired end state and current reality, along with the changes needed and challenges present to overcome the current problems.
Situation Analysis
Issue and Opportunity Identification
Global Communications senior management team received approval through their board of directors to go ahead with the decision to outsource its technical support call centers to India and Ireland. However, the two major impacted stakeholders – the Union and GCs employees – were not included in the decision-making process or the end decision. What caused GC to make such a hasty decision without consulting the Union and its employees? In large part, senior leadership was responding to time pressures in wanting to respond quickly to rising concern from the stockholders and the board of directors. According to Bateman and Snell, “the premium is on acting quickly and keeping pace. The most conscientiously made business decisions can become irrelevant and even disastrous if managers take too long to make them” (Bateman & Snell, 2004, p. 77). The management team did well in using real-time information about the competitive environment to support their need to outsource, citing a 40% reduction in costs and a greater ability to enter the global arena. However, the team neglected the second part of making decisions when under time pressures – involving people more effectively and efficiently through the use of trusted experts (Bateman & Snell, 2004). GC failed to use the knowledge and experience of Maria Antez, the liaison between GC and the Technologies Workers Union for more than 10 years before making a strategic decision that now presents a potential legal battle, not to mention a public relations minefield.
Despite the problems that exist between the Union and Global Communications, many opportunities are present for Global Communications. Global Communications has entered into strategic alliances with satellite and wireless providers to better enable GC to provide a full suite of products and services to its current and future customer base. GC has excellent growth opportunity and potential within its sales force, and already has an established need for 1000 salespeople in a short timeframe. Labor opportunities still exist within the rapidly-growing consumer segment, and despite a 10% pay cut for previous Small Business employees who transition, the potential exists for a 15% retention bonus to offset the pay cut, plus promise of pay raises upon success and growth within that segment.
Stakeholder Perspectives/Ethical Dilemmas
Global Communications has many stakeholders involved in its operation, including its stockholders, senior leadership, the Union, its employees, and its consumers. Stockholders need to make profit on their investment and are concerned with the long-term growth and viability of Global Communications. Stockholders also have the right to sell their stock, which if done in large amounts could seriously damage Global Communications position as a corporation, and may even prevent it from entering foreign markets. Senior leadership, the Union, and employees all see the same need of ensuring that Global Communications continues to grow and remains profitable, but with additional levels such as retaining employment/job security.
At this current point, job security is being threatened (whether perceived or real), largely due to the lack of hierarchical communication from leadership regarding the changes. All that employees have heard is what is present in the grapevine, which can lower morale and productivity, trust in the company and leadership, and trust in the Union – a very dangerous situation:
“Grapevine information is sometimes so distorted that it escalates rather than reduces employee anxiety. This is most likely to occur when the original information is transmitted through several people rather than through one or two people. Furthermore, employees develop more negative attitudes toward the organization when management is slower than the grapevine in communicating information” (McShane & Von Glinow, 2005, p. 345-346).
The Union is stuck in the middle – the job of the union is to represent its employees in negotiations with management and protect the rights and interests of employees, especially considering the previous collective bargaining agreement that resulted in 20% cuts to health and education benefits. However, the Union was not consulted in this decision, which presents some legal concerns and ramifications between the Union and Global Communications. Some very negative potential results could be legal action against GC, or worse a labor strike or product boycott.
End consumers are also a stakeholder in Global Communications, as they are interested in the products and services provided by the company. The new products and services that can be offered through the strategic alliance with satellite and wireless providers is certainly exciting for customers, but risk from other areas exists. Outsourcing technical support to foreign countries could cause backlash from consumers due to language and cultural barriers, not to mention the cultural backlash against companies that choose to offshore work. An unhappy workforce with no perceived job security could provide poor customer