Problem Solution: Global Communications

Problem Solution: Global Communications

The telecommunications industry is slowing down, and Global Communications (GC) has to find ways to make money. Over the years, the company has seen a 50% loss in stock value, and the local and global markets growing around them. Global Communications needs a change.

The plan that senior management team has proposed to the board have been approved, and will now start to be implemented. Simply stated, the plan is to move the call centers overseas, and relocate jobs while expanding the local market with new service. However, with the rumors that have made it through the grapevine to the workers union, that plan might be hindered by lawsuits against Global Communications.

Situation Analysis

Issue and Opportunity Identification

With the deregulation of telecommunication companies, it has definitely created a problem for Global Communications. Three years ago, Global Communications was a top leader, stocks traded at $28 per share. Now the stock is trading around $11, and the Global Communication board is starting to get worried about the future of the company.

The major reason for this drop in company value is competition from other companies. Local, long-distance, and internal markets are now all competing for the same business. Now, even more people are able to provide communications as well. Internet companies and the cable companies are able to provide Voice over IP services to lower the cost of communications by using the existing internet network.

With the existing pressures that the company is facing, drastic measures had to be taken. Recently, Global Communications and the union agreed to cut education and health benefits by 20%. Different perceptions of this deal put the union in a state of mind that this was going to be the changes for a while. This has now made the union very mad at the company, and possibly forcing the union to seek legal action, instead of the company relieving some financial pressures that they have been faced against recently and only worrying about that.

Along with the education and health benefits that the union gave up, the consumer call centers also will see a 10% pay cut and possible relocation if those employees want to keep their job. With this move, Global Communications will be able to compete in the local markets again. However, word was passed through the grapevine about this, and employees are now very angry. “The Grapevine is a unstructured and informal network founded on social relationships rather than organizational charts or job descriptions” (McShane, 2004, page 345).

Stakeholder Perspectives/Ethical Dilemmas

There are three major groups for the stakeholders at Global Communications, the board members, the Senior Management team, and the Union (who represents the employees). The board members of Global Communications are going to look at the best interest of the company. Their goal is to make profit and keep costs low, doing whatever they have to, to keep the company running.

The senior management team is looking at the best interest of the board members, and has to implement policies and procedures to do so. The senior management team has just come up with a plan to enter and compete in the local markets as well as step up globalization of Global Communications. The results of this plan that the board members approved is to:

1) Move some of the technical call centers to India and Ireland, thus resulting up to 40% savings in costs

2) Keep people in the company, even if it means moving them around to different departments / divisions; however 10% pay cuts are expected.

The union is looking for the best interest of the employees. Recently as mentioned before, they have just given up 20% of their health and educational benefits. And now the company is doing this to them. Now the union has to focus on actions against Global Communications through legal matters with the United States.

Problem Statement

Global Communications will expand its services to the global market and be competitive in the local industry. By increasing the services and products available, saving costs of the call centers, improving employee morale, and improving communications between the employees, the union, and senior management are all needed for this to happen.

End-State Vision

Step ahead 10 years from now. Sales are up and Global Communications is leading the local market in sales and stepping up to the global market as major players. An increase in communication between employees, the union, and senior management