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Situation Analysis and Problem Statement
In business, companies are always competing with each other to remain the leader in the industry. Companies want to have a competitive edge over others in the business. Global Communications is at point, where they need to make some changes to their organizational structure to remain competitive in the market. The new approach of Global Communications will bring astonishing opportunity for growth in the industry however ethical dilemmas and issues will arise when the company implements the new plans. This paper will evaluate the issues and opportunities facing Global Communications in their goal to become a global leader in the industry. First a look at the situation Global Communications is facing to better understand opportunities and issues.
Situation Background (Step 1)
Global Communications is a telecommunications company that is faced with increasing competition and decreasing profits. The company has faced depreciation in stock value, with the price per share dropping 50% in three years. Shareholders are becoming increasingly upset and want to rebound and remain competitor in the industry. Global Communications has devised plan to introduce new services to their customers by creating an alliance with a satellite provider as well as applying practices that will increase profitability and cut costs. By implementing this new plan Global Communications faces several challenges.
The first issue that Global Communications faces is in their move to become a global leader in the industry is the need to outsource to India and Ireland. To do this, Global Communications needs to layoff several employees and many of those who remain will most likely be relocated with a 10% salary cut. The impact of several coworkers and friends losing their jobs will affect the moral of the remaining employees. Global Communications is faced with the challenge of maintaining the trust and loyalty of their employees to realize their new growth goals.
The second issue that Global Communications faces is the issue with the Union. The Union is upset because they feel that this is a ploy by Global Communications to manipulate a recent contract. The president of the Union, Andre Mustov, informed Global Communications that action would be taken against them through all necessary resources. Global Communications is facing a law suit that will bring potentially damaging media attention at a time when they are trying to earn the trust of the global market.
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The third issue Global Communications faces is the reputation of the company with their employees, customers, and the local community. Global Communications was known to have a competitive edge because of their loyal employees. The implementation of letting several employees go to outsource their jobs to Ireland and India.
The fourth issue that Global Communications faces is the issue with Maria Antez, the Union liaison. Maria was not informed of the new company strategy, and when news of it leaked out before Global Communications had a chance to break it, Maria looked foolish in the eyes of the Union. They were unhappy with the results of her recent negotiations and giving up over 20% of education and health benefits. Maria convinced them that this was a necessary step in the long- term growth plan of the company, and it would give the Union more members while benefiting the current ones. Now they want to outsource jobs to India and Ireland. This goes against everything Maria told the Union, and now she looks like a fool. The Union lost their trust in Maria.
The fifth issue that Global Communications faces is unhappy shareholders because of the decreasing value of stock. Over the last three years, the value of stock as decreased 50%. Global Communications is part of a diminishing telecommunications industry and shareholders are losing faith in the company's ability to rebound after the recent economic pressures. Global Communications needs to maintain trust with there shareholders and make them believe that this is what is best for the company.
The first opportunity for Global Communications comes from being able to cut labor cost by nearly 40% and increase profitability. By outsourcing to Ireland and India, Global Communications is reducing labor cost and increasing profitability while gaining an advantage in the global market. They want to become a global leader in the industry, and what better way to start their reputation in the global market. Global Communications outsourcing to other countries will help build trust in their new market.
The second opportunity for Global Communications is to realize growth through the introduction of new services. Global Communications teamed up with a satellite service to provide video services and broadband, and a wireless partner for internet access anywhere. This complete solutions package is comparable to those offered by their competition. This partnership will allow Global Communications to compete with the telephone and cable companies and could be very profitable for the shareholders.
The third opportunity for Global Communications is to increase the technical sophistication and expertise of the technicians by having call centers in India and Ireland. Not only will this provide Global Communications with experts in the field assisting their customers it will also reduce labor cost for the company. Small business owners were interested in having the expertise of the technicians from overseas.
The fourth opportunity for Global Communications is an overall increase in profits. This will occur from globalization and the decrease in labor cost by outsourcing to India and Ireland. Profits will also increase with the layoff of several employees, and the 10% salary cut implemented for remaining employees. By marketing aggressively on the international level their new products and services, Global Communications should become a leader in the global market which will increase profitability.
The fifth opportunity will come when Global Communications is able to increase employee benefits because of the increase in profitability. Global Communications will want to ensure the happiness of their employees and reward them for a job well done. This will lead to an increase in productivity and motivate employees to work harder and increase job performance. Keeping employees happy by giving them the benefits they want will maintain their trust, increase job performance, and decrease turnover and overhead.
Stakeholder Perspectives/Ethical Dilemmas
Global Communications has several stakeholders that have conflicting ideas about the issue that will lead to several ethical dilemmas. First are the stockholders in the company. After seeing a 50% decline in the price per share of stock in the last three years and diminishing returns, they are ready for the aggressive approach to market the company internationally. However, they are looking at one thing only, profits. They are willing to do whatever it takes to maintain a leader in the industry and expand overseas. The ethical dilemma that arises is the layoff of several long-term employees. Many lives will be affected by the globalization and the stockholders are thinking about money in their pockets.
Other stakeholders involved in the issue are the employees of the company. Several employees will be laid off while others will be forced to relocation and salary cuts. These are the employees that help build to company to where it is today yet they are not good enough to market the company in today's ever-changing global industry. The ethical dilemma that arises here is the decision to outsource and increase profits by decreasing labor costs. Global Communications is choosing to ruin the trust the built up with their employees to gain an edge in the global market.
The Union is another stakeholder in the issue of Global Communication becoming an industry leader in the global market. This is a long-term alliance that has completely been violated in the last few negotiations, and Global Communications made their liaison, Maria Antez, look foolish and untrustworthy. They will be affected by the news of the globalization and many will associate their views with those of Global Communications.
Consumers are also stakeholders in the company and they want to have these new product options and technical expertise available to them; therefore they support the globalization and expected job loss for current employees.
The stakeholders present several challenges to Global Communication through all aspects of this decision of globalization; however the most important challenge is to make all stakeholders in the company believe that new product services and outsourcing are key components to the long-term success of Global Communications in the global market. Loosing all those employees is a hard a price to pay yet was a necessary step in the evolution of Global Communication into the international market.
Problem Definition (Step 2)
The problem statement is a detailed analysis of the problem at hand and defines the alternatives and outcomes for achieving an answer. Global Communications wants to compete with local cable companies by offering comparable packages and transform into a global corporation within the next three years. This will be done by introducing new product services, hiring expert and sophisticated technicians from overseas, and aggressively marketing in the international industry. There are a few goals that will need to be accomplished to ensure that Global Communications reaches their expectation.
End-State Goals (Step 3)
The first goal that Global Communication needs to accomplish is to offer comparable packages to the complete solutions ones the local telephone and cable have. They need to remain a competitor in their current market and to do this they need to expand their product services.
The second goal for Global Communications is to become a global leader in the telecommunications industry. They will do this with the new product services and aggressively marketing overseas. To become a global leader, they will have to enter into the international market as well as win their trust over.
The third goal is to maintain their reputation with employees and consumers. They are known to have a competitive edge because of their loyal employees. They need to find a way to gently introduce the idea of globalization and the severe layoff that will arise from it, and keep trust and faith in the company. They need to ensure that this is best for the company and after the expansion and growth employee benefits will increase.
Global Communications is faced with several issues while implementing their strategy to enter the global market and become a leader in the industry. The company will face many issues and ethical dilemmas that will arise from the implementation of the new strategy. There are several opportunities that will arise for Global Communications; they just need to figure out the best way to inform the stakeholders of the necessary job loss of several long-term employees. Global Communications needs a problem statement to analyze the situation and determine the best alternatives for proceeding with this aggressive globalization.
Outsourcing to India and Ireland