Problem Solution: Global Communications
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Problem Solution: Global Communications
Global Communications is, one of many, telecommunications companies that have experienced a decrease in profits but is trying to stay competitive with other global markets. Over the last three years they have lost the support of the shareholders which resulted in a 50% decrease in share value. To reverse this negative outcome, Global Communication’s new chief executive, Katrina Heinz proposed a new two-pronged aggressive approach with a support of a few senior company leaders. The decision accomplished increased profits and introduced new technology, but also blindsided the Technologies Union to create a serious grievance with the union workers. The senior leadership team’s plan included growth with the introduction of new services, and an alliance with a satellite provider to offer video services and anytime internet access. The second part of the plan included cost-cutting measures, which included downsizing local domestic call centers and outsourcing jobs to India and Ireland where the company could reduce unit cost up to 40%. Additionally, the employees who would survive the downsizing would receive a 10% cut in salary.
Global Communication CEO’s aggressive leadership and communication style has led the team to distributive negotiations, aggressive communication and non-programmed decision making. This paper highlights solutions to the problems that Global Communications has endured, and the solution needed to be employed to reverse the compounding problem.
Situation Analysis
Issue and Opportunity Identification
Global Communications implemented the cost-cutting plan through the utilization of an aggressive, win-lose non-programmed strategy. Global Communications saw the plan as a significant improvement, an opportunity to decrease expenses that result in a profit increase. Since Global Communications knew the union would not buy in on the plan after already agreeing to a 20% cut in benefits, the company circumvented union leadership. This decision making behavior closely mirrors that of distributive negotiators. Distributive negations usually involve a “single issue in which one person gains at the expense of another” (Kreitner, R. & Kinicki, A. 2004, p.17). With the current changes in motion, Global Communications can focus on mending disgruntled union members, potentially avoid a drawn out union strike, and integrate some of the union’s ideas in an attempt to regain loyal corporate employees.
Second, Global Communications CEO’s primary objective is to increase revenue and profits through more aggressive globalization. Global Communication senior leadership team realized the company’s shares were decreasing over the past three years and developed a two-pronged aggressive approach. This approach would increase their profits and renew key stakeholders interest. The means by which the plan was purposed to the union displayed behavior usually found in that of aggressive leadership and communication style, in that the outcome was “self-enhancing and strived to take unfair advantage of others” (Kreitner, R. & Kinicki, A. 2004 p. 13). The union viewed the cost-cutting plan as unfair, an unethical ploy to break their current contract. The senior management team and union leadership need to have a meeting to arise with a win-win situation for the corporation.
Finally, Global Communications CEO wanted to bring the company back from a 50% deficit. The new plan identifies Global Communications failure to have a contingency plan to fall back on. The senior leadership team made a non-programmed decision, where “the situation is unique and there are no previously established routines or procedures that can be used as guides. Situations requiring non-programmed decisions are poorly defined and unstructured, and have important consequences for the organization” (Gomez-Mejia, L. R., & Balkin, D. B. 2002, p. 2). An opportunity exists for Global Communications to look into mergers with bigger companies to expand their foundation and make more jobs available for the employees and union workers who were affected by the downsizing.
Stakeholder Perspectives/Ethical Dilemmas
Global Communications EVP of Consumer Marketing stated many times that the company’s competitive advantage comes from loyal employees. The plan to downsize and outsource jobs heightens an employee’s fear for personal security. Maslows Hierarchy of Needs (Simons J., Irwin D., & Drinnien B. 1987) identifies this as an attack at ones basic foundation for biological and physiological needs, which could result in a loss of a solid employee base and continuity to other competing companies. Furthermore, the union employees have already received a 20% loss of benefits in health and education, and now they could possibly be laid off or furloughed. The union views this as a breach of contract, which strengthens their rational of Global Communication’s unethical business. Additionally, the cost-cutting measures implemented by senior leadership will potentially backfire for the company, creating an unwanted chain of events as evident in the union’s threat to take action against Global Communications. Global Communications could witness retaliation from current employees and start experiencing nonsupport of customers due to labor strikes. Customers who support the union or temporarily lose service from these actions might transfer their telecommunications service to another company, who supports its employees and union.
Problem Statement
GC will become a leader in telecommunications through competition, increasing employee morale, rebuilding a partnership with the union, reducing costs and becoming a leading innovator in the industry.
End-State Vision
Global Communications is a global telecommunications leader, committed to a variety of small businesses and consumer customers. Global Communications will be a global telecommunications leader through mergers with video services and wireless internet providers. Global Communication’s new call centers in Ireland and India successfully launch and an improvement in employee morale due to a renewed partnership with the union. The overarching end-state vision is the gradual increase in shares to exceed that of three years prior.
Alternative Solutions
Out of the six companies reviewed, three viable, potential solutions emerged as applicable to the issues experienced by Global Communications. These