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Issue and Opportunity Identification
As of late, interests in the telecommunications industry have been struggling in the stock market. Shareholders have been less than satisfied with dividends, and expressing more and more concern that the conditions may not improve. Global Communications, like other companies in the telecommunications industry, have been bearing the brunt of current economic conditions. In three years, $28 worth of shares in Global Communications stock dropped more than half of it’s value, to a mere $11 in recent trading.
In an attempt to address what is believed to be the underlying issue relating to the current stagnancy in telecommunications market, competitive saturation, Global Communications has devised a plan to rebound with a two-part strategy. The first part of the strategy entails forming partnerships with other telecommunications providers to create a sort of one-stop-shop where customers can get all of their telecommunications needs met by one service provider. The second part of the plan involves reducing operating costs to increase revenue, and to utilize the resources created through cost mitigation and partnership development to expand the company’s position further into the international arena.
The Senior Leadership Team at Global Communications, comprised of a diverse group of company executives with varying levels of the experience in the company and in the telecommunications industry, including the CEO and representatives from each key department in Consumer and Small Business Marketing and Sales, and Human Resources and Public Relations, met to discuss the tactics that will be used in implementing the agreed-upon strategy. Through this team, it was determined that one of the major tactics that would be employed to support the strategic plan would be to outsource technical call centers from the United States to India and Ireland, realizing a 40% reduction in operating expenditures, while at the same time capitalizing on highly-skilled technical expertise and opportunities to tap into international resources to further support the company’s globalization strategy.
In order to effectively implement their strategy, Global Communications must start with effectively communicating their strategy to employees.
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The first stage in the layoff process timing should be determining who will be affected by the layoffs, particularly who is willing to voluntarily terminate employment, who is eligible for transfer to other opportunities, and who is likely to be laid-off based on job performance, experience in the field, ability to adapt and deliver, and seniority within the company. Due to the very sensitive nature of the lay-off plan, it might be best for management not to simply rely on employee files alone to make these determinations, but to go to the actual departments and spend a little time with employees to find out how each contributes to the organization. “In an organizational context, senior executives can't rely on employee surveys and company newsletters alone to understand what is happening in the organization. They need to get out of the executive suite and meet directly with employees at all levels and on their turf to fully understand the issues,” (McShane & Glinow, 2005, p.39).
The next stage of the lay-off plan would require Global Communications to meet with Technologies Workers Union representatives, Maria and Andre, to ensure that all contract specifications are being adhered to in determining how to proceed with laying-off certain employees and what these employees should be offered in terms of severance and outplacement assistance. This same team must also work together to formulate the approach that they will take in determining how to appropriately compensate the employees they wish to retain through the transition and beyond so as not to risk losing these employees to competitors or other job opportunities.
One consideration for retaining employees in keeping with Global Communications “Our Edge is the People” philosophy could be reinstating benefits lost through the last round of union contract negotiations. Another option might be to freeze salaries so that the employees do not have to take the expected 10% pay cut, with the understanding that there may be no increases for a few years contingent upon the success of the strategy implementation, finally they could consider offering retention bonuses as Nancy suggested in the 3/4/04 Senior Staff Meeting. Any of these measures could go a long way in mending the relationship with the union by preventing a potentially negative precedence being set in the industry as Maria suggested in the 3/4/04 Senior Staff Meeting, and bridging the gap between the union’s perception of unethical practices in terms of employment contract on the part Global Communications, with Global Communications’ need to maintain the strategy they hope will move the company’s current financial situation in a more positive direction. “This can be a significant source of noise in the communication process if the sender and receiver have different perceptual frames and mental models,” (McShane & Glinow, 2005, p.22).
The final stage of the plan, running concurrently with staggered layoffs, would be ramping up the call centers in India and Ireland with fully staffed and trained employees who will be ready to take over once the final team member in the U.S. call centers has been terminated. This will require Global Communications to have a full understanding of some of the potential challenges they will face in outsourcing call center services to another country, for example any language barriers that may come with U.S. customers communicating with representatives over the phone who speak English with strong foreign accents. “Language is the most obvious cross-cultural barrier. Words are easily misunderstood in verbal communication, either because the receiver has a limited vocabulary or because the sender's accent makes it difficult for the receiver to understand the sound,” (McShane & Glinow, 2005, p.31).
The final stage of the plan would also require Global Communications to do their homework in learning as much as possible about the culture and consumer needs of the people in India and Ireland, as these would be the most optimal locations to initially launch efforts to expand the company’s customer portfolio internationally. “The ambiguity of language becomes a bigger concern across cultures because sender and receiver have different values and interpretations of the language,” (McShane & Glinow, 2005, p.31).
Stakeholder Perspectives/Ethical Dilemmas
The Global Communications executives are one of the key stakeholders in the scenario. They are charged with saving the company from potential demise by turning around the company’s current financial situation in delivering greater profits to shareholders. Unfortunately the main tactic that the executives felt necessary to cut operations cost and deliver upon the new globalization strategy involves outsourcing some services to other countries, which will lead to the closure of U.S. call centers and the elimination of some team member’s jobs. This will have to be handled delicately in order to avoid tarnishing an already strained relationship with the union, as well as possibly negatively reflecting upon the company’s established reputation for valuing its employees.
The Global Communications call center employees are another group of key stakeholders in this scenario. Like any people who survive off of employment income, they want to keep their jobs without having to relocate their families, or take a reduction in pay. Of course they understand that the company needs to take measures to stay in business so that they can keep their jobs, but having already loss some of their benefits in a recent previous round of employment contract negotiations between the union and the company, employees are naturally hesitant to believe that it is necessary for the company to eliminate their jobs when the jobs will not be simply going away, but instead will be offered to new employees in a country other than the United States.
The Technologies Workers Union is still another key stakeholder in this scenario. The union’s interests lie in keeping U.S. jobs from being outsourced abroad, as well as negotiating fair employment contracts for union members. The union has made good faith efforts to work with Global Communications in the past to facilitate a cooperative relationship, including accepting some unpopular concessions regarding changes to employee benefits in the last round of contract negotiations. Now, the union simply wishes to play an integral role in employment decisions made by Global Communications upfront, but is concerned that Global Communications is just trying to work around current contract specifications while not considering the impact the company’s new strategy might have on setting a negative precedent for the union’s future negotiations with other company’s in the telecommunications industry.
Once the new strategy has been implemented, Global Communications will have full-functioning technical call centers in India and Ireland, in addition to the a small group of employees retained in America, to provide support for various telecommunications products to customers, old and new, in several countries around the world.
To move from the current state of financial depression and the low morale that stems from poor company performance and looming changes to the structure of the organization, Global Communications must embrace the importance of effectively communicating plans to all key stakeholders through various hierarchies within the organization and without, such as the union (McShane & Glinow, 2005, p.4 & 39), and carefully following through with each stage of the plan as communicated, in a timely and efficient manner.
In addition to dealing with the lay-offs, Global Communications will need to be aware of the many challenges that may come with increasing their global presence as a key player in the telecommunications industry, while remaining cognizant and respectful of needs of consumers in different areas of the world based on the language and culture of those markets (McShane & Glinow, 2005, p.31).
Global Communications will face several challenges in utilizing effective communication to execute their strategy for improving the company’s position in the telecommunications industry. Global Communications will need to embrace the value of high-quality communication to ensure that all facets of the new company vision are brought to fruition, including those that impact current and future employees, stockholders, competitors in the industry, and customers who will use Global Communication products and services, anywhere in the world.
McShane, S. L., & Von Glinow, M. (2005). Organizational Behavior: Emerging Realities for the Workplace Revolution, 3e. New York: The McGraw-Hill Companies