Problem Solution: Global Communications - Situation Analysis

Problem Solution: Global Communications

Being number one and staying number one in the corporate world is an extremely difficult task. Often times it means initial losses and even failure, but through hard work, perseverance, and dedication the expectation is to quickly net a greater profit than the original investment. Executive management is often placed in situations where they must make quick and often drastic decisions that can change everything within the company. Some companies such as XM Satellite Radio and Sirius Radio have chosen to merge together to cut competition and overhead costs. “Collectively, they have got a customer base of about 14 million people” (XM and Sirius…”. 2007). There are also other companies that have chosen the O word, outsourcing, as an alternative to cutting costs and increasing productivity.

The overall outcome of outsourcing has had both positive and negative outcomes. Aside from cutting costs and increasing productivity, it definitely has its pros and cons for the company, the company’s customers, and the employees abroad. “Companies are not launching large scale operations abroad, but instead want to expand their global presence” (Mehring, 2007, p.26) In this paper the writer will discuss how Global Communications, a telecommunications company, wishes to expand their global presence, while increasing profitability by utilizing the foreign resources. It will further identify the company’s plan of outsourcing, as well as other issues that have come into play due to their decision. It will also outline the potential solutions, as well as risks associated with the solutions and how to implement them more effectively.

Situation Analysis

Issue and Opportunity Identification

Global Communications is a telecommunications company that is under extreme pressure due to a tremendous rise competition. The industry has suffered a huge blow at the hands of cable companies, who stepped in to provide complete solutions encompassing computers, televisions, and plain old telephone service (POT). (Scenario, Global Communications, pg. 1). Global Communications senior leadership team has developed a two part approach in hopes that it will lead to a complete turn around for the company. First, they plan to bring growth to the company by introducing new services, mainly to small businesses. Global Communications has partnered with a satellite provider which will allow them to offer video services, as well as satellite broadband. They have also partnered with a wireless provider which will allow them to offer the small business owner internet access using a wireless telephone card or PC card. Secondly, the team has agreed upon outsourcing their call centers to India and Ireland as a means of cutting costs and increasing profitability.

The Board of Global Communications has unanimously agreed with the senior leadership team upon the idea of competing more aggressively in local markets, as well as expanding to create a global presence. The plan to move their call centers to India and Ireland is much favored and the senior management team believes that it will transform GC into a global corporation within the next three years. On the other hand, with receiving this approval, comes much more to consider because downsizing locally will bring a great disaster. There are some employees that will be relocated, but there will be more that will be laid off. The employees that are relocated will take a 10% pay cut to remain a loyal employee of the company.

Up until this point, Global Communications has been a company that is well known for treating their employees very well. By announcing that they are outsourcing thousands of technical positions to new call centers in India and Ireland they are making a direct contradiction to what they have taken pride in for so many years. With the layoffs comes serious employee morale issues coupled with a direct impact on productivity. There isn’t much hope on the horizon for those that are being laid off. The senior management team has chosen to implement career counseling for those that are being laid off, and retention bonuses for those that are taking salary cuts to stay aboard. Furthermore, the exhausting customers of Global Communications are adamant about more services, options, and opportunities to save money. At this point the only way Global Communications will be able to provide this is by expanding into India and Ireland where they will have lower priced expertise readily available.

Global Communications has come upon a very serious issue with Technologies Workers Union in regards to the plan of outsourcing local employees’ positions to India and Ireland. The problem is because they have a contract with the Union, and outsourcing is not something that is beneficial to the local employees.