Global Communications
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Situation Analysis and Problem Statement
The competitive nature of the business world we live in has driven many telecommunication companies into making less than desirable profits. These companies face competition from all over the globe. All these companies are competing for the local and long distance markets, as well as the internet. With the introduction of cable and internet companies into the mix of telecommunications in recent years, the market is more competitive than ever. Undeniably, the pressure from other companies has caused one of the telecommunications companies, Global Communications to rethink their approach to the market.
Situation Background (Step 1)
Global Communications is a telecommunications company that has seen the value of its stock decrease more than 50% over 3 years from $28 to today’s value of $11. With all the competition they have, they must find ways to increase the stockholder’s confidence and bring the company back to the economic prosperity they once showed. They are unable to waste any more time and need to make changes now.
Global Communications established a plan to work their way back up the ranks. First, through the introduction of new services to its small business and consumer customers and an alliance with a satellite provider to produce video and broadband services, Global Communications will be able to compete in the global market. In addition, they are looking to a cost-cutting initiative to improve profits. As a result, making this plan work will have many consequences. Nevertheless, showing the benefits of this plan outweighing the consequences might be the hardest part.
Issue Identification
There are five issues at stake with Global’s plan:
Education and Health Benefits Reduction
The employees recently agreed to a 20% cut in their health and education benefits
Outsourcing to India and Ireland
The issue is making the move to another country and relocating employees and their families. Also, there is a need to layoff workers to make the move.
Salary Cutbacks
An average 10% pay cut for employees moving overseas will be made to offset the smaller budget.
Morale
By asking for a pay cut and laying other workers off the company is in a precarious position of trying to make the plan seem positive for all involved. If they cannot accomplish this, employees will be unhappy and the morale low leading to the next issue.
Productivity
With morale low, workers will be less inclined to perform duties and become lackadaisical in their approach to work.
Making the plan work with all these issues may not be so easy. In spite of all these issues, there are opportunities to eliminate or diminish the effects.
Opportunity Identification
There are three noteworthy opportunities with Global’s plan. Within each opportunity there are details describing how the opportunity can be reached.
The three opportunities:
Competing Locally, Nationally and Globally
The alliance with a satellite provider enables Global to broaden their market.
Global Relocation of Call Centers
By relocating to India and Ireland labor costs are lowered and a reduction of 40% in costs for handling calls at the call centers.
Union and Employee Relationship
By providing in detail how Global’s plan will make the company and their workers better-off within three years.
Although it may seem that the opportunities do not outweigh the issues, ultimately Global has no choice but to make a change. If they do not make something happen now, they may force the company into bankruptcy or shareholders to sell. Nevertheless, with each issue and opportunity there are ethical dilemmas the company faces in how each person with a vested interest will be treated.
Stakeholder Perspectives/Ethical Dilemmas
Global faces many ethical dilemmas in how the different stakeholders are affected by the plan. Shareholders have an interest in seeing the value of the stock rise and will sell if they feel the plan does not suit their interests. Global’s