Problem Solution: Global Communications Mba 500
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Problem Solution: Global Communications
MBA 500
University of Phoenix
Problem Solution: Global Communications
Global Communications (GC) finds itself at a crossroads and must act quickly to solve the current dilemma. GC has seen it’s revenues dip and due to intense competition in the industry and the stock price has dipped from a high of $28 three years ago to it’s current price of $11 a share. The management group has decided that it must act now to increase revenue by introducing new services through partners and reduce costs by outsourcing call centers currently hosted in the United States overseas to India and Ireland. But management did not involve one of it’s key stakeholders, the Technology Workers Union, in the decision process and that group is now threatening to take legal action. With many workers faced with either job losses or a reduction in salary, employee morale is at an all-time low.
Describe the Situation
Issue and Opportunity Identification
There is too much competition in the telecommunications industry and GC does not stand out as unique. Cable companies and other telecommunication providers are all trying to reach the same market. Wall Street is not looking favorably on the industry as a whole and coupled with GC low earnings has caused the company’s stock price to drop. To complicate matters the union is concerned about the plans to reduce costs by outsourcing their call centers to cheaper sources of labor in foreign countries. If they take legal action it could cast a cloud over the company as a whole causing its stock price to continue to languish.
GC is focused on growth through the introduction of new services, focused on small businesses and consumers. They are partnering up with a satellite company to offer video services. They are also working with a wireless provider to offer Internet access using wireless telephone and PC cards. If the stock market likes the cost cutting moves it could boost the stock price. Also by outsourcing the call centers to lower labor cost markets it will allow the company to grow quickly since those markets have an abundance of highly-trained, low cost labor. But the cost-cutting moves are in danger since the company does not have the backing of the Technologies Workers Union.
The decisions made by the management group were handed down without taking into consideration the effect they would have on all the stakeholders. This apparent lack of emotional intelligence threatens to be an ongoing problem in the company if not addressed in some way.
Stakeholder Perspectives/Ethical Dilemmas
The key stakeholders for GC include the Technology Workers Union, the management group at GC, the stockholders, the partners involved in the new business developments and the customers.
Customers are an important stakeholder in GC. The moving of call centers can have a negative impact on customer satisfaction. Take note of the case of Everdream software. They partnered with a top outsourcing firm and trained foreign workers in the U.S. for months before moving their call center from North Carolina to Costa Rica. The result? Despite his careful preparation, customer satisfaction dipped from 95 percent to the low 80s within a month, owing mostly to language barriers and phone static. A scant seven months later, Everdream pulled the plug and moved the call center back to North Carolina. Customer satisfaction quickly went back to its previous levels. (Sauer, 2006)
GC must work to rebuild its partnership with the union. The union is trying to protect the jobs of its members. The company could offer a plan that would reduce headcount by attrition and voluntary separation programs. At the same time, it could increase the staff at the new call centers as growth occurs due to the new partnerships. Instead of laying-off skilled work force, GC could utilize them in other areas and as new positions are needed add workers to the new call centers. With a partnership in place with the union, there would be no legal battle and no bad press to hurt the stock price.
Frame the “Right” Problem
GC will become a leader in telecommunications by fending off competition, increasing employee morale, rebuilding it’s partnership with the union, reducing costs and becoming a leading innovator in the industry.
Describe the “End-State” Vision
GC will know it has succeeded when the stock price for the company exceeds $28