Global Communications Gap Analysis
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Situation Analysis
Issue and Opportunity Identification
In today’s communications market, there is simply too much competition. Local, long distance and international companies are all competing for the same business. As technology advances and competition stiffens, it is up to management to meet face the challenges and steer Global Communications towards a direction that will allow the company continuous growth. As a result, Global Communications stocks are plummeting and stockholders are in a frenzy to generate immediate solutions towards turning the tide of the downward spiral.
The communications industry took a major blow when cable companies entered the playing fields and began to offer all in one communications packages, whereas in the past, each branch within the communications field offered specialized and independent services. This means consumers are able to obtain television, internet and telephone services from one provider. In an attempt to cut cost and save plummeting stock prices, Global Communication’s senior leadership team, proposed a new trend setting strategy to the Board of Directors.
The aggressive two-pronged approach will include new services and a new company direction. First, Global Communications plans to introduce new services, primarily targeting small business and consumer customers. The new services will include both local and long distance markets worldwide. To ensure international success, Global Communications has created alliances with a satellite provider that will be able to provide video services, as well as, a satellite version of broadband. In order to compete with local telephone and cable companies, Global Communications has developed a partnership with a wireless provider that can allow consumers and small business owners anytime Internet access using wireless telephone or PC cards. Even company information hosted in mainframes will be accessible once the partnership commences. Second, the senior team has introduced cost-cutting measures that will potentially improve profitability. To maximize both of these initiatives, the company plans to market itself more aggressively on an international level. This will include outsourcing its call centers to India and Ireland. (UOP, 2006)
Stakeholder Perspectives/Ethical Dilemmas
At a pivotal crossroad, Global Communications Chief Executive Officer, Katrina Heinz excitingly announced the board’s approval of the company’s strategic plan to cut costs by relocating call centers to India and Ireland. The terms of off-shoring and outsourcing are often used almost as synonyms, however here, in keeping with Davis et al. (2004), we distinguish between the two: Offshoring is about location—when an activity is offshored, it is performed in a different location to the main operation (which is then the onshore location.) Outsourcing, on the other hand, is about governance—when an activity is outsourced, it is performed by another organization, as opposed to in-house by the organization itself. Consequently, the two concepts are orthogonal: an activity can be performed either offshore or onshore anc can be performed in-house or be outsourced.
Conceptually, outsourcing and off-shoring can be viewed together, since both involve employing individuals outside of the organization to handle operational work. According to Stan Gibson, some American companies seem to be slowing their outsourcing/off-shoring efforts. The main reason that companies outsource/off-shore is to reduce costs, which are achieved through lower labor rates of overseas workers. (Pfannenstein & Tsai, 2004).
Executive Vice President of Small Business Marketing and Sales, Nancy Everhardt, who was an avid supporter of the plan, was rejoiced to hear the approval of the outsourcing plan by the board of directors. The plan to increase revenue and increase profitability will incorporate layoffs and a possible 10% pay cut for employees that will be retained and relocated to the new call centers.
Other EVP’s from various departments share the common goal of growth and increased profitability, however, the means by which the end results are reached vary in opinion. Maria Antez, who serves as the Vice-President of Technologies Workers Union does not share the same enthusiasm in regards to outsourcing as Katrina or Nancy and sees many challenges that arise if Global Communication’s strategy are implemented. Maria feels that enthusiastic employees are a key element in a successful company and with the expected lay offs, employee moral will drop. Global Communications has always strived to be fair to its employees and has firmly believed that the employees are a vital part of the businesses success.
Depreciated employee moral could be detrimental to the survival of the company since it could potentially hinder productivity. Maria feels as though she was limited in the amount of information that was released to her in regards to Global Communications strategic planning. Citing contract manipulation, the Union has spoken out against the strategy. “Global should look at the Union as a partner,” said Global-Union liaison Maria Antez. Before making this move, all avenues should have been exhausted. Hiring foreigners to do Union jobs is not the answer. In a day and age when access to information is vital to survive and succeed, Global Communications suffers from one of the key elements that it provides as a service to customers; communication. The lack of consideration from Global Communications to incorporate all involved parties has placed a strain on the various relationships. Global Communications has demonstrated poor communication about reducing costs by outsourcing, involving layoffs, and downsizing domestic calls centers, involving pay-cuts.
Although, attempts have been made to offer services and packages that could potentially increase revenue, the global communications field will continue to straddle the fence of potential stock crisis as long as poor management decisions are made and poor internal communication is a problem. Any solutions to the existing problems should be made in a manor that allows employees and customer to maintain the respect and reputation that has already been established. Union employees have already sacrificed education and health benefits in an attempt to the company afloat. Employees deserve to be included with information pertaining to the direction of the company.
The EVP of Human Resource and Public Relations role throughout this transition will be minimizing potential damage to the image of Global Communications. In order to keep damage control to a minimal he will need to place an emphasis on potential opportunities