Global Communications Gap Analysis
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Gap Analysis: Global Communications
Global Communications faced a difficult and arduous decision. The company is declining and a new growth strategy is ready for implementation. The growth strategy will enable Global to become more competitive and responsive to their customers. However, the implementation of the plan was not thought out clearly causing conflict and division. How can Global fix their issues? The problems Global faced were looked at and measured against the concepts presented in the cited texts.
Situation Analysis
Issue and Opportunity Identification
In the scenario downloaded from rEsource, Global Communications faced difficult times. The stock price dropped over 60% within a three year period. Stockholders were anxious and their confidence was declining. The scenario indicated there was tremendous pressure to turn around economically.
The blame was placed on the entrance of the cable companies into the telecommunications industry. Cable companies, with advanced technologies and infrastructure, were able to not only provide television entertainment, but also phone and internet access. This was something Global Communication was lacking in. Global Communication could no longer compete in customer service.
In Understanding Business, 5th Ed, Nickels and McHugh state:
Competition among business has never been greater than it is today. Some companies have found a competitive edge by focusing on making high-quality products. The goal for many companies is zero defects-no mistakes in making the product. However, simply making a quality product isnt enough to allow a company to stay competitive in world markets. Companies now have to offer quality products and outstanding service at competitive prices. That is why GM is building automotive plants in Argentina, Poland, China, and Thailand. Combining excellence with low-cost labor and minimizing distribution costs have resulted in larger markets and long-term growth for GM (pp10-11).
This is the environment Global in operating in. The cable companies have the high-quality products that are in high demand. Consequently, Global intends to capitalize on not only updating their products, but by introducing new products and services, targeting specific customer demographics, and decreasing expenses while increasing customer satisfaction.
Nickels and McHugh also state there are four factors for operating in a highly competitive environment.
First is competing by delighting the customer (Nickels and McHugh,, 1999, p.11). This is what Global intends to do by introducing their strategic alliances with satellite and wireless providers. Coupled with their new calling features, video and wireless services now make one-stop shopping for all communication needs convenient for the customer. Also, the outsourcing plan is designed to increase technical sophistication of the support personnel to provide a better experience for the customer.
Second is competing by meeting the needs of the community (Nickels and McHugh,, 1999, p.12). Meeting the needs of the community is addressing the concerns, wants, and needs of the stakeholders. By introducing the new products and services and decreasing costs, Global puts themselves in a position to increase value in the company by expanding the customer base, thus increasing market share. This also not only addresses the concerns of the stockholders, customers, and management, but it also provides job security for the workers.
Third is competing by restructuring and meeting the needs of the employees (Nickels and McHugh,, 1999, p.13). This is an area that Global is weak in addressing. The scenario stated that the employees and union agreed to concede approximately 20% of their benefits to assist in the cost cutting measures to keep the company viable. The management team decided to outsource anyway without involving the union, giving the perception that the workers opinions were insignificant. Since management needed time to “spin” the information in a favorable light, much innuendo and rumor spread by the grapevine.
When Global decided the course of action, only the Board of Directors and the Executive Management had any input in the plan. Earlier, the union took wage concessions under the premise that job security would be assured. However, the decision was made to outsource the labor to save an additional 40% of the wages for the call center personnel.
This information was not disseminated in a timely manner leading to the rumor mill ar grapevine. Kreitner and Kinicki stated although the grapevine can be a source of inaccurate rumors, it functions positively as an early warning signal for organizational changes (p 541). When workers hear of changes unofficially, it causes greater confusion, since there are no checks and balances in the grapevine communication. Half-truths are spread with the same conviction and whole-truths. When the communication is not timely presented, it also sows seed of mistrust between the workers and the management, looking like there is something to hide.
These changes were made without representation of the employees interests. From the perspective of the union, this showed a disregard for the worker. The perception was one of hostility and there was no negotiation taking place. In earlier negotiations, the union agreed to concessions as a trade off of keeping everyone employed. When the decision was made, it was very one-sided