Running Head: Global Communications Problem Solution
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Global Communications Problem Solution
Global Communications Problem Solution
Global Communications will increase their profit margin and market share by expanding their services while lowering their costs to provide them. Global Communications is being challenged in the market with the current economy and competition in the telecommunication industry. Three years ago, their stock price was valued at $28 per share while it is valued at $11 today, which is a 60.7% decrease.
If Global Communication would use the Nine-Step Problem- Solving model, they would be able to identify any issues that may arise with their decision to outsource and expand services. The nine steps include (1) Describe the Situation, (2) Frame the “Right” Problem, (3) Describe the “End-State” Goals, (4) Identify the Alternatives, (5) Evaluate the Alternatives, (6) Identify and Assess Risks, (7) Make the Decision, (8) Develop and Implement the Solution, and (9) Evaluate the results.
Global Communications Challenges and Opportunities
There is more competition in the telecommunication industry in todays market and Global Communication needs to be able to compete to stay in business. Global Communications provides new calling features and suites of local and long distance services but this is not enough to stay strong in the telecommunication industry. Cable companies are offering many services to their customers, which include the telephone service in addition to service for computers and televisions. Global Communication has made the decision to create alliances with a satellite provider to offer their customers video services and partner with a wireless provider for Internet service.
To be successful in the telecommunication industry, Global Communications must cut operating costs to increase their profit margin. Katrina Heinz, Global Communications Chief Executive Officer, has experience in increasing revenue and profits through aggressive globalization in the industry. Heinz will lead Global Communications throughout their plan on cutting operating costs by outsourcing some of the technical call centers to Ireland and India. Outsourcing this portion of their business will reduce the unit cost per call by 40%, which will increase Global Communications profit margins.
With these changes, Global Communication will have opportunity to provide more services, increase profit share due to lower costs, advance technology through outsourcing, keep loyal employees and be able to grow their domestic and global business. Not only will these opportunities allow Global Communications to be more competitive and become a threat to their competitors, they have a better chance to increase their market share. With these opportunities, Global Communications will have challenges that that will need to be addressed.
The challenges that Global Communications will encounter with their strategic plan would include employee relations. With the plan the company has in place to outsource being implemented, the company will have to downsize their workforce. This will not be done without any major implications. The company is aware during the implementation, that there will be a layoff and the best employees that will get to stay with the company. The employees that will stay will be asked to relocate along with a 10% pay cut. These same employees have already received a 20% cut in health and education benefits so this announcement will not be taken lightly by these employees. Global Communications will need to be sincere and explain their decision to outsource as a way for the company to survive in the telecommunications industry.
The downsizing in their workforce does not reflect Global Communications highly publicized “Our Edge is People” philosophy. The Executive Vice President of Human Resources and Public Relations, Joel Thompson was quoted as, “Global is committed to maintaining – and in the future, creating – as many jobs as possible, but without this strategy, Global will not survive the changes in the telecommunications industry.”
Global Communications did not include the Vice President in the Technologies Workers Union, Maria Antez, in their strategic planning process. Antez had convinced the employees previously that the education and health benefit reductions were necessary for the companys long-term growth. She felt like the union should have been kept up-to-date on issues the union will be addressing with the employees and not have been left out of the discussions.
The executives of the Technologies Workers Union see this move to outsource as unethical and a ploy to manipulate around the current union contract conditions. Andre Mustov, President of Technologies Workers Union informed the company that the union will try to stop the outsourcing approach. This dispute with the union will have additional costs for Global Communications since the union will take action through the government and other available resources.
Once the plan to outsource has been announced to the employees, they may view Global Communications as unethical. The employees that will have the opportunity to stay will be forced to relocate and take a 10% pay reduction. The outsourcing strategy will benefit the employees with the higher salaries, have more career opportunities and will not be laid off. This will lower Global Communications employee morale, causing the employees to possibly have lower production rates. Competitors may start recruiting the best employees of Global Communications to try to increase their knowledge in their competition. If the employees feel betrayed, they may decide to move to the competitors side.
Another challenge that Global Communications may have to contend with would be the agreements with the satellite and wireless provider. With the increase in companies combining to offer services, there is a higher risk that conflicts could occur. Contracts or written agreements will need to be created to cover the possible conflicts that may arise in the course of business.
Communications will be a challenge with the physical barriers of the phone lines between the United States, Ireland and India. There is always a chance that lines may go down, breaking the communication between the consumer and call centers in Ireland and India.
Communications may break down with the semantic barriers that would be due to the different cultures. According to the website,