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Global has been losing profits over the past several years and needs to make major changes in order to survive. In past three years the company stock has fallen from $28 to $11. In order for Global to raise profitability and become more competitive with other companies in the marketplace they have to make some changes including having more options to the consumer and expanding its call centers to less expensive areas of the globe.
The problem that came out of the decisions that Global has made was they did not work closely with their union to make sure that they negotiated a fair compromise that would work for both the employees involved and the company. They completely disregarded the contracts that were with the employees.
Issue and Opportunity Identification
The first opportunity that Global realized was that in order to make them more competitive with other companies they had to provide the many services to the consumer that the other cable and telephone companies were able to provide. “First, they plan to realize growth through the introduction of new services, primarily to its small business and consumer customers, who will now be served in both local and long-distance markets across the country. To compete with the local telephone and cable companies, Global has created alliances with a satellite provider to offer video services as well as a satellite version of broadband. Partnership with a wireless provider will allow the small business owner anytime Internet access using wireless telephone or PC cards. Even company information hosted in mainframes can be accessed remotely” (Scenario, Global Communications).
Next Global realized that they needed to cut costs and become more global by outsourcing its call centers to India and Ireland. This will help lower the unit costs for handling calls by 40%. They felt this was the best way to provide its consumers with high quality intelligence at the best price for the company, in turn increasing profitability and gaining globalization.
Stakeholder Perspectives/Ethical Dilemmas
The stakeholders in these decisions are the employees of Global, the Union and Global itself. The employees have a lot at risk here because in order to make Global more profitable the company is outsourcing their call centers to India and Ireland. This will affect the employees because some of them will have the option to relocate which will cut their current salaries by 10% and the others will be laid-off.
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Global is in need of some major changes in order to become more competitive and
profitable in the future. In order to become more competitive they must have more resources
available to the consumer and cut costs where it can.
First in order to become more global and have more resources available to the consumer
it is necessary for Global to locate more call centers in other countries. This will create
profitability by cutting unit calling costs up to 40%. Global will work closely with the union to
renegotiate the contracts so that the employees will be taken care of. The company may offer
options to relocate current employees to these call centers, there would be a 10% pay cut but the
company could also offer a retention package for those employees that stay onboard. This
package would include a percentage of pay back as a bonus to all of the employees that did
relocate as long as Global were to remain profitable and increase its numbers. There will be
some lay-offs those people involved in the lay-offs will be offered a severance package and
career counselors available to help with their future career success.
Next Global must supply more options to the consumer in order to compete with other
telephone and cable companies. “To compete with the local telephone and cable companies,
Global has created alliances with a satellite provider to offer video services as well as a satellite
version of broadband. Partnership with a wireless provider will allow the small business owner
anytime Internet access using wireless telephone or PC cards. Even company information hosted
in mainframes can be accessed remotely” (Scenario, Global Communications).
By taking these two steps Global will be able to show measurable increases in profitability
within the near future and save the company from going under. These steps shows that Global is
identifying the emotional intelligence of all that is involved in this situation and working closely
with the union to come to compromises that will help benefit both the company and the
employees involved. This will help keep the morale and productivity
up across the company and help keep Globals’ philosophy of “Our Edge is People” (Scenario,
The gap that exists between what actually happened with Global Communications and the end result that we are hoping to have is all in the involvement of handling the transition in a fair way with both the union and the employees involved. Global has decided to make changes and propose these changes to the board before even consulting with the union on how they could make it more beneficial to all parties involved. They completely ignored the earlier negotiations that they had agreed upon with a 20% cut in benefits and proposed a plan to the board before considering the current contracts. When Global got approval from the board to go ahead with the plans Global still did not take the time to review the plans with the union to ensure that the employees best interests were taken into consideration. Instead they moved forward with the plans and left the company open to future morale issues and low productivity levels companywide.
Global has been on a downward trend and needed to make some major changes in order to stay competitive with other communications companies and become more profitable. They decided to create more services to its consumers and to outsource its call centers to India and Ireland in order to cut costs. These plans were good ideas for the company to improve business but the problem was in the way that the plans were carried out and how they delivered the plans to the people.
Global did not inform the union as to the plans to outsource the call centers, which meant that many employees would face a lay-off and the others that chose to be relocated to other countries would have to take a 10% pay cut. Without thinking of the ramifications of such a decision and without coming up with compromises they put themselves in the situation of losing morale and productivity amongst the whole company. If they would have just gone back to the table with the union and come up with solutions to help benefit both the employees like severance packages and a retention bonus the company could have put a more positive spin on the issues. The company felt that since they had the boards blessing on the future changes that it was in the best interest of the company to not waste anymore time on negotiations and move forward with the plans. With these kinds of actions there will definitely be some ramifications that the company will have face with the union in the future.
1,357 word count
* Global Communications Scenario, University of Phoenix Word document, MBA class 500.
Issue and Opportunity Identification
Issue Opportunity Reference to Specific
(Include citation) Concept
Global did not take the time necessary to think out the negative impact of not working with the union to come up with a compromise to put their ideas to make Global more profitable and competitive into action.
Global has decided to outsource it’s call centers to India and Ireland to get the most intelligence for the cheapest cost on the company. This will cause lay-offs and 10% salary cuts to many employees that have already given up 20% of their current benefits in earlier negotiations in order to help bring the company to profitability.
Global has always had the image of “Our Edge is our People” and this will totally throw that image away. This will also cut down the morale and productivity of the employees. Global partner with the union to come up with a strategic plan to benefit both the employees of Global and the company itself. “Mega-giant Global Communications announced yesterday that it will outsource thousands of its technical support jobs to new call centers in Ireland and India” (Scenario, Global Communications).
Global needs to become competitive with the current competition that is available to consumers. Introduce new services to small business and consumer customers. “First, they plan to realize growth through the introduction of new services, primarily to its small business and consumer customers, who will now be served in both local and long-distance markets across the country” (Scenario, Global Communications). Realize Growth
Global needs to think on a global level and be able to provide high intelligence while cutting costs. Market itself on an international level. “Second, the senior team has identified cost-cutting measures that will improve profitability” (Scenario, Global Communications). Cost-cutting measures
By making plans without working with the union on the current contracts that were recently negotiated Global completely disregarded the reactions that they would get from making these plans.
Work with the union on negotiating new contracts and compromises for future changes. “Apparently, there is no room for negotiation around your new strategic plan. Our meetings are going nowhere. I had hoped we could establish some common ground and a win-win situation. Obviously that is not the case. In fairness, I want to inform you that we will take action both through the government and all other available resources” (Scenario, Global Communications).
The Interests, Rights, and
Values of Each Group
Employees Keeping their jobs and future bonus.
Union Supporting the current employees of Global and their rights in the current contracts.
Company Keeping Global competitive and become profitable.
End State Goals
The goal for Global is to come up with productive negotiations that both support the current employees by working with their union contract and coming up with solutions to help support the changes needed to become more profitable. Create cost-cutting measures.
Global will learn the emotional intelligence that is needed when making major changes and use this information to create a smooth transition for both the company and the employees.
Global will also create more services available to its consumers to help keep it competitive against other telephone and cable companies in the marketplace. Realize growth.