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The telecommunications industry is struggling and the share owners are not happy with negative returns and they are loosing confidence in the industry to recover. There is tremendous pressure on the industry to turn around and Global Communications (GC) is feeling the heat of the competition and it's been reflected on there share prices.
Global Communications is finding it very difficult to compete in local and international markets for the same business. There are ongoing issues with competition creating better product with cost effective plans and with more options to the customers. Global Communication is not able to compete with these low cost providers so they have to create a new market plan to keep there market share and there stockholders happy.
Global Communications upper management has approved a new plan to introduce new services to small businesses and individual customers, who will be served in both local and long distance markets. GC will also collaborate with other companies to provide video services and wireless access to customers.
The Global Communications upper management has a vision to make the company a global company and an industry leader in the next three years. Global Communications has also introduced a cost cutting plan that involves outsourcers its information technology business from the US to India and Ireland to save 40% in labor costs. GC's management hopes that the above plan will help them reduce cost and increase there revenues; however, there were many issues that the management did not address when assembling their cost cutting plan.
This paper will provide an overview of Global Communications intentions on what they wanted to achieve with the reorganization. GC faced several communications and decision making challenges in the process of the initial decision to reorganize and to implement the reorganization plan. The reorganization plan has some conflicting interests and values among the stakeholders so the management must identify the issues and make a decision that is in the best interest of not just the company, but all the individuals that have an interest in the outcome of the decision.
Issue and Opportunity Identification
The management of Global Communications has decided on a vision to become an industry leader and global company within three years. Global Communications has implemented a cost efficient plan that will help reduce cost and improve profitability and also they plan to officer new services to there small business customers and some individual customers.
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Stakeholder Perspectives/Ethical Dilemmas
There are several stakeholders in these situations the company is a stakeholder, the share holders, the employees, the union, the community, the customers and the employees family members are all stake holders in this dilemma. The major and one of the biggest stake holders are the companies owners meaning the companies share holders. The share holders are worried about the negative returns and asking questions as to the company's abilities to compete in the market place. The share holders want the company's management to do whatever necessary to get the company more profitable and to increase there market share and become an industry leader. The customers are also looking to get better technology and to have more options. As long as the customers are satisfied with the service they receive they don't mind how the goals are achieved.
The management has agreed to make major changes to grow the company and to increase profits; however, there is a conflict between the management and the employees union. The conflict has arisen partially due to ineffective communication methods used by the management and the union. The two parties involved are no able to understand what the other one is trying to communicate and to act on. The management has not informed the employees about the new strategy and the vision. This has led to information being obtained through an unstructured and informal network know as the grapevine (Kinicki & Kreitner, 2003, p.74).
Another conflict was that the union had recently given some important health and education benefits to its members thinking that this would be beneficial for the company's long term growth and prosperity. The union feels that the company is outsourcing to get around the current contract. The company has a responsibility to uphold and respect the contract that they entered into with the union. Also, the union thinks that the company should look at all the possibilities and consider every opportunity before closing there US plant and outsourcing the services. The union thinks that outsourcing jobs is not the answer to the problem and they think that they would like to make a win-win situation for all parties involved; however, if the company does not work with the union the union threatens to take action against the company.
The management is only looking to outsourcing as a strategy that would increase profits and will help the company grow; however, they do understand that the outsourcing move goes against the company's philosophy of "Our Edge is People". The management also realizes that in the global market the company must outsource to stay competitive and is willing to make the move and implement its new strategy to become a global organization within three years. The management thinks that this move will help them create competitive advantage and will also help the company grow in new markets and meet customer demands.
The management is concerned with the community's reaction when they announce the decision to close local operations because of offshore outsourcing. Global Communication has to find a way where the communities they do business in are on the same page as them because in the long run the companies success will help the community get more and better jobs with higher pay scale. The management has to present this in a way where the community and all the stake holders would share the vision that the management has.
Global Communication will continue to improve its business by making its operation more affective and efficient and also by growing its business. The company will be more competitive in new markets and offer many new services to its customers. By outsourcing jobs to India and Ireland the company will be able to reduce cost and will be able to create competitive advantage. Global Communication will become a global company and in the process they will start new projects to cut costs. Global Communication will emerge as an industry leader and will continually lead the industry in new products and services along with efficient operations. Global Communications believes in honesty and hard work in order to succeed and to reach all its goals and visions and will communicate better with all the parties involved.
Global Communications has been getting negative returns and has seen loss in market share for some time and they will need to change this if they want the company to successful. In order to get more competitive the company has developed a strategy to outsource some of its operations to India and Ireland to reduce cost by 40%. To be more successful the company will need to take its plan and present it to all its stakeholders so they know that the company is trying to do and that in the long run it will be a win-win situation for all the stakeholders. Global Communication needs to show its employees that they care about them and that they will help them train for better jobs and that the company will be more success full and the employees can possibly return and work for the company in the future. The companies' biggest challenge is to get everybody to share its vision and the best way to communicate is to meet with all the stakeholders face to face.
The company needs to learn and adapt on better communication methods with its employees. To be successful the company will need help from all its stakeholders; it might be tough at the beginning but the company will be successful and will become an industry leader as long as the company is honest and respects all its stakeholders.
Global Communications was loosing revenues and market share so the company took action to reduce cost and increase profits. The company successfully identified the problems and found solutions. They have to find a better way to communicate the solution to all the stakeholders who have great interest in the outcome; also the company must try and avoid a major conflict with its employees and union.
The solution to Global Communications problems is to take the company global and to outsource its operations to reduce cost and increase profits. It will be difficult for some of the stakeholders to accept this; however, in the long run this will work out best for everybody because the company will be able to grow and more jobs will come. Also, the outsourcing will help the company give technological options to its customers and reduce cost at the same time. If the strategy is executed properly then Global Communication will be an industry leader.
Kreitner, R., & A. Kinicki. (2004). Organizational Behavior: Managing Conflict and Negotiation. New York: The McGraw-Hill Companies.
Kreitner, R., & A. Kinicki. (2004). Organizational Behavior: Organizational Communication in the Internet Age. New York: The McGraw-Hill Companies.
McShane, S. L., & Von Glinow, M. (2005). Organizational Behavior: Emerging realities for the workplace Revolution. New York: The McGraw-Hill Companies.