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Global Communications is in the telecommunication industry and has been losing stock value over that last three years. Some of the problem lies in current competitors. Right now, there are many competitors to Global Communications and Global Communications is ready to trim costs and increase revenue to strengthen their foothold in this very competitive market.
The senior team of Global Communications has formulated a plan to get the company back on track. One goal they are focusing on is turning Global Communications in to a truly global resource. To compete, they are introducing more services to consumers to build up their volume to be competitive.
However, becoming profitable again and becoming a truly global company has some employee issues. Specifically, in Global Communications case, opening new call centers offshore, in India and Ireland, is the issue they must overcome with their current employees and workers union.
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Issue and Opportunity Identification
Global Communications has become unproductive and their revenue has dipped. Their stock has plummeted to 50% of what its value was three years ago. The board has decided to make some changes to turn the company around within a three-year period. This calls for drastic changes. The senior team at Global communications has taken on the challenge. They have identified measures that will increase the company's profitability. They have found through their business case that the best route to profitability is to move some of their technical call centers to India and Ireland. This gave them the reduction in costs and the basis for the new "global" operations, one of their current goals.
However, outsourcing some operations meant downsizing their current operations. This affected their current employee's pay, benefits and even jobs. Global Communications has plans to relocate some staff, which would cut those employees's salary by approximately 10%. The senior team must communicate effectively to their current employees and union board to complete this change successfully.
First, the team must emphasize the goals of the company are to become profitable and global. The current employees must realize that their job future will be affected with Global Communications if Global Communications does not implement some changes to turn the company around. Even though some employees may face a small salary cut, the positive side must be emphasized. The cost of living in India or Ireland may be much lower than their current country. This will offset any adjustments in salary.
The outsourcing of the call centers and downsizing of the domestic call centers can be attributed to the reduction of company spending. Each employee and union member should have the opportunity to ask questions and see the information that Global Communications is relying on to make the decision to outsource some operations.
Stakeholder Perspectives/Ethical Dilemmas
The Global Communications Senior Team is looking to turn the company around to become global and profitable. This is their job and what they were hired by the board to accomplish. They are looking at this banking on success and wish to implement these changes successfully with the least amount of employee and press backlash. They are competitive and committed to the company's success.
The union and employees don't fully understand these changes being implemented by Global Communications. They believe Global Communication is taking more and more benefits and job security away from them. They value security, growth, success and honesty.
The dilemma Global Communication faces is being able to successfully transmit the information to the employees and union with hierarchical communication (Kreitner & Kinicki, 2004, p. 540). They can relay to the employee the rational behind these changes and in turn, receive employee and union feedback to that rational.
Global Communications will realize growth by successfully cutting costs and increasing revenue. They are on the success track now and just need to be able to communicate effectively to their employees what the benefits will be. Price Waterhouse Cooper's 10th Annual CEO Survey found:
"We have found that many successful merger and acquisition transactions are tied to well-defined corporate strategies as well as the ability to realize post merger operating efficiencies. ( .) Successful managers are continuously and proactively identifying opportunities that create value. ( .) They are able to communicate the credibility of their plan to investors, employees, and the board, as well as to stakeholders of the target or acquired company."
Some ethical issues involved for Global Communications is to be truthful regarding the consequences to employees and being able to explain and gain acceptance for their current vision for the company.
Global Communications is facing a backlash from employees on their new implementation of their strategic plan for revenue and globalization. Their plan was implemented and shows that the effect on the company's revenue will be positive. The outsourcing to Ireland and India will cut costs and increase revenue. However, this change has conflicted with their philosophy of "Our Edge Is People" and has created a problem between Global Communications and the Union.
These challenges require Global Communications to do some recovery work, specifically with their employees. There seems to be some communication distortion (Kreitner & Kinicki, 2004, p. 543). The senior team needs to communicate more effectively and openly with the current employees so those employees get their information from the source, not from third parties such as the union and the media.
In addition to communication about the changes, Global Communication may reassure the current employees by communicating that the company will be adding more services to its current services, and therefore may create new positions and revenue.
Global Communications has an innovative and results driven senior team. They have been successful in creating and testing their business case to increase revenue for the company. They have also thought of great ways for the company to competed, such as outsourcing some operations to other countries to cut costs and increase their global company presence.
Using hierarchical communication to relay and gain information from the company's employees will help mediate some employee resistance to change. Although many employees could be laid off and of course lose their jobs, some anger from them could be mediated by communication from Global Communications. If they used direct communication, many of the unknown variables would be known for the employees. This would diffuse some of the anger these employees would feel. There seemed to be some communication distortion between the senior team and employees, mostly because there was not clear and direct communication from the senior team to its employees and union representatives.
Kreitner, R. & Kinicki, A. (2004). Organizational behavior. 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.
Price, Waterhouse Coopers, (2006). 10th Annual Global CEO Survey A US private company perspective on cross-border M&A and outsourcing. Retrieved 9/13/2007, pwc.com.
Issue and Opportunity Identification
Issue Opportunity Reference to Specific Course Concept (Include citation) Concept
Global Communications are shifting their employee resources. They are trying to transform into a global corporation within the next three years.There are the beginnings of employee fear and resentment based on Global Communications VP's failing to have an open flow of communication between top-level executives and the current employees (McShane & Von Glinow, 2005, p. 345). Global Communications Executive Group has the opportunity to benefit from direct communication to its employees to explain the reasoning of the proposed changes and change the employee attitude. "All of thesedirect communication strategies potentiallyminimize filtering because executives listen directlyto employees. They also help executives acquire a deeper meaning and quicker understanding of internal organizationalproblems. A third benefit of direct communication is that employeesmight have more empathy for decisions made further up the corporate hierarchy,"(Von Glinow, 2005, p. 344-345). Communicating in Organizational Hierarchies.
Global Communications' management staff are trying to grow the company by increasing revenue and reducing costs. They decided the best way to do this was to outsource some operations. They are trying to recoup their 50% stock depreciation. However, their union representatives and board of directors have heard of the new plan and already are nervous and oppose the plan without knowing all it's intricacies. Global Communications has communicated the through the grapevine unintentionally which has already caused problems with their workers union ((McShane & Von Glinow, 2005, p. 345). The opportunity is for Global Communication to increase their stock value, therefore increasing the job security for employees. They also can offer an employee retention bonus to retain key employees while they undergo these changes. Grapevine information is sometimes so distorted that it escalates rather than reduces employee anxiety. This is most likely to occur when theoriginal information is transmitted through several people rather than throughone or two people. Furthermore, employees develop more negative attitudes towardthe organization when management is slower than the grapevine in communicatinginformation (Von Glinow, 2005, p. 345-346). Communicating through the Grapevine.
Stakeholder Groups The Interests, Rights, and Values of Each Group
Global Communications Senior Team Adaptability, Endurance, Competitiveness, Success, Integrity, Fairness.
Global Communications Board of Directors Adaptability, Endurance, Competitiveness, Success, Integrity.
Global Communications Employees Success, Growth, Security.
Technologies Workers Union & Board Fairness, Honesty, Accountability.
End State Goals
Realize growth by successfully cutting costs and increasing revenue.
Improve profitability by becoming global.
Mitigate employee anger by explaining rational completely and communicating effectively.