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With increasing consumer demand for products and services, many industries are experiencing exponential growth. With the increase in competition, many companies are finding it progressively more difficult to remain competitive. These companies may face numerous challenges, including a decline in profits. Companies are feeling increased pressure to make extreme changes and decisions that will likely affect the morale and productivity of their employees, but will boost profit and revenue. The following is a comparative analysis of how different companies implemented the use of organizational commitment, organizational communication, and emotional intelligence while executing plans created to increase profits and maintain competitiveness within their industries.
BellSouth is a telecommunications company that provides various services to over 46 million customers worldwide. BellSouth has four main divisions of operation covering the areas of communications, domestic wireless services, the Latin American market, and an advertising and publishing group. In 2000, the telecom industry hit hard times, with the industry losing in excess of $1 trillion in market value (ebstrategy.com, 2006). BellSouth was facing increasing competition and financial troubles. The telecommunications industry was, and still is, facing tremendous pressure to reduce capital and operating costs (ebstrategy.com, 2006). Comparable to the situation in the Global Communications scenario, BellSouth found it necessary to consider alternative solutions to cut costs and increase revenue.
In 2001, BellSouth faced a dilemma characteristic of many companies after the Internet Bubble popped: a dwindling IT budget with continued growth for IT needs. To combat the increasing cost of continual maintenance and development of IT applications, BellSouth began strategically evaluating its outsourcing capabilities to further trim down IT costs (ebstrategy.com, 2006). Outsourcing was not a new concept for BellSouth. In 1998, BellSouth selected Accenture as the IT outsourcing strategic partner to assist in improving service, budget consious performance, and on-time delivery (ebstrategy.com, 2006).
After making the decision to pursue outsourcing opportunities, BellSouth was faced with the undertaking of deciding just how to communicate their plans without causing uproar. Good communication is essential for the success of any company. BellSouth began by sending out an internal newsletter explaining what was to happen to the company, and the reasoning behind it. Bellsouth then issued a press release to national media outlets. In doing this, BellSouth was able to announce the information to the public using language that conveyed the changes in a positive way.
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Outsourcing was not a new idea to the BellSouth team, unlike with Global Communications. As a result, BellSouth was able to advance with their new plans with minimal notice from the media. BellSouth exercised satisfactory emotional intelligence in dealing with the situation, and the employee reaction. Overall reaction from the employees suggested that even though the employees were not pleased about the situation they understood the reasoning behind it. Although layoffs did take place, BellSouth was able to proceed with their plans without a marked negative effect on organizational commitment among remaining employees.
America Online (AOL) is an U.S.-based, global media and Internet services company operated by Time Warner. In 2001, the total value of AOL stock dropped from approximately $226 billion to approximately $20 billion. AOL’s customer base has also decreased to 13 million subscribers as of December 2006, barely ahead of Comcast, AT&T and Yahoo, its competition. (Wikipedia, 2008) AOL has stiking similarities to Global Communications because it was pushed to consider outsourcing options in order to save the company.
AOL also shares similarities to Global Communications since their outsourcing plans were leaked before AOL was ready to release the information.
Much unlike BellSouth, AOL and Global Communications were left with the unpleasant task of dealing with the repercussions of not being the ones to inform their employees about their plans to outsource jobs. AOL’s outsourcing plans inadvertently slipped out on it’s website in a job posting looking for, “a global program manager to coordinate software development teams in the United States, Dublin, Ireland and Bangalore” (Hu, 2006, para. 2).
AOL displayed poor organizational communication because those in charge did not inform the employees of the outsourcing plans, instead allowing for the media to break the news to the employees at the same time as the general population. Another reason AOL’s plans became a big news event was because of recent layoffs that had taken place among engineers in California. As a result of AOL’s inadequate communication, the organizational commitment may become reduced because employees’s job security is threatened, and many may lose trust in the company.
Fear among AOL’s existing IT workers that their jobs will be outsourced has also increased emotional tensions within the company. Emotional intelligence refers to how well the employees within a company can deal with their emotions and take care of a situation or problem objectively. AOL and Global Communications caused employee distress not only because of the plans to outsource jobs but also because of their lack of organizational communication in handling the situation.
Chrysler is going through a tough time trying to sale their inventory of cars, since the sales of cars have been low not only due to market conditions but also due to numerous issues with mechanical problems. On top of that one of Chrysler’s plastic manufacturers is filing bankruptcy, giving little time for Chrysler to find another manufacturer. In addition, 32,000 thousand unionized employees had gone on strike due to not being able to reach an agreement.
Chrysler is currently going through its toughest time up to date. Communications between management and the union are not going well, since the union is asking for job security and healthcare. But due to company financial situation, job security, healthcare and salaries cannot be guaranteed. After a meeting between Chrysler management and the UAW, it seems that there are no solutions in the near future.
Due to the company’s financial problems the best option for Chrysler is to continue cutting out on payroll and benefits to provide the company with a little boost and relief financially, while new strategies are put into place.
Chrysler had agreed to sell everything they have in order to provide lasting benefits to its employees and dealers to a multibillion company called Cerberus. Chrysler was confident that Cerberus was the right strategic buyer for Chrysler, with a long-term commitment to growth and success. Cerberus had expressed immense confidence in and respect for the people of Chrysler and their leadership team, and is committed to working constructively with both union leadership and Chrysler's management team to help us realize our full potential. As a private (non-public) company, would be better positioned to concentrate on our long-term plan for recovery rather than on short-term results. With the financial strength and additional operational expertise brought by our investment partner Cerberus, Chrysler will renew its focus on what has always made us special: the passion, creativity and commitment of our employees, suppliers and dealers to delivering exciting Chrysler, Jeep and Dodge vehicles and quality Mopar parts to our customers.
NetZero was the first company to offer free internet service to its consumers. However, as being the first company to do so, issues with different way of servicing those clients would arise. First, competition like Kmart and Alta Vista and growth retention. As other companies came out offering same services NetZero customer base went from 4 million to 2 million. The reason why customers stop using NetZero’s free internet was because after a some of time they would need it to become regular customers to NetZero paying a small fee.
Communication among employees at NetZero could be categorized as excellent. When people thought they could not make real revenue, it’s started growing sharply. Another way to attract more customers to be interested in the company’s stock the management comes up with a project called Free Cash Flow. Which means that NetZero will discount it to the present on a per share basis resulting in the stock’s Present Value. NetZero’s management team is well organized and knows when to come up with new ideas to bring more customers interested in the company’s product.
As the internet became more than a necessity and big companies like AOL came out with high speed internet, NetZero had to create a more innovated program to keep their current customers and entice more to become interested and acquire their service. This is when they came up with the 3G “Third Generation of the internet”; The speed seems to go faster than traditional dial up and is a fraction of the cost of broadband. 3G technology pioneers a new side of the internet, establishing a quality service for people who can’t afford higher fees or equipment upgrades. This populist approach is garnering a lot of appeal.
Analysts thought NetZero, the little company that came out of nowhere with their free service and ugly e-mail system, would be a flash in the pan. However, by continually updating their software, adding amenities and developing new technology, NetZero was the little company that has arisen on the field of battle and conquered the Goliaths of the Internet service age.
NetZero has a tremendous commitment towards their clientele; this is why they work so hard to provide the best service possible. From coming up with new software to trying to give their stockholders the best possible profit through a Free Cash Flow (FCF) and a 10 Year Treasury Yield with a high percentage. NetZero’s commitment to their customers is their first priority.
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