Global Communications is faced with challenges as well as opportunities as it struggles to bounce back from falling stocks and competition. The company has been forced to make drastic decisions in order to survive in the telecommunications industry. For example, GC has partnered with a satellite provider to offer new products and services for customers. However, the most recent decision to outsource call centers to India and Ireland would create layoffs, and the plan has been scorned by the public and the Union. Employee morale is low and the Union is threatening to take legal action. Global Communications must explore alternatives, rebuild relationships, and improve organizational commitment in the hopes of succeeding.
Issue and Opportunity Identification
Global Communications is faced with several challenges. These challenges include tough competition within the industry that has forced the company to rethink its business plans as consumers demand more advanced services. In an attempt to address the issues GC is faced with, GC has planned to outsource its call centers to India and Ireland allowing for a significant reduction in labor costs. Second, the company has partnered with a satellite company to provide additional products and services to customers. Third, GC plans to launch an international marketing campaign which plans to increase profits. The Union’s disapproval of the plan was not anticipated. Executives realized the decision would not be favored however, the Union’s threat for legal action was unexpected. The public’s opinion was greatly influenced by the lack of loyalty to employees and the apparent contract manipulation.
Executives at Global Communications were presented with issues that required critical thinking to realize the opportunities they could achieve. “But vigilance and an understanding of how to manage decision-making groups and organizational constraints will improve the process and result in better decisions.” (Bateman, 2004, p.89). However, the decision making process was completely inadequate. Benchmarking research was limited, alternatives were not considered and risks were not taken into consideration. GC executives must now address the current issues GC is facing. These issues include: competition in the telecommunications industry, changes in technology, customer expectations, employee morale, company-union relations, and the image perceived by the public. By changing the strategy of decision-making, Global Communications can become a leader in the industry.
Effective decision-making requires compiling alternative solutions together, many which can be generated by including employees in discussion sessions. Opportunities or challenges can be identified by talking to employees, customers, and other stakeholders. (Problem Solving Based Scenarios, n.d., p.4). Also, generic benchmarking, “looking beyond your own industry for the best practice” (Maul, n.d.,p.1), should provide new perspectives that would further identify alternatives. The idea is to generate as many alternative solutions as possible, eventually selecting the best alternative with the least rick involved.
To regain profits, Global Communications must also develop strategies to increase organizational commitment. Announcing that lay-offs and pay decreases were likely to led to decreased employee morale and damaging company-union relationships, this would damage the company’s reputation. The Union has threatened legal action against Global Communications. To gain the trust back within the organization and the community, GC must improve communication within the company and involve the employees in the decision-making process. As morale increases, employees’ satisfaction of their jobs increases. Increased job satisfaction improves job performance, customer satisfaction and customer retention. Global Communications must also realize that the customer’s needs should determine the direction that they should take to succeed. GC cannot meet these needs alone however, exploring various options would prove beneficial.
Stakeholder Perspectives/Ethical Dilemmas
Several stakeholders with various perspectives exist in the Global Communications scenario. While each group has its own perspectives, some conflicting interests, rights, and values must be evaluated. First, profitability for the company is a priority for several stakeholders, including executive management and potential GC partners. The need to be profitable may generate an ethical dilemma in relation to the needs of the Global Communications’ employees, particularly if lay-offs or pay decreases are necessary for profitability. Although company executives and employees agree that respect and fairness to others are important, the need for profitability may override those values. Second, partnerships for GC and its partners may be dependent on the reputation of each individual company. Third, each entity within the telecommunications industry realizes the competition for survival is threatening and the outcome of GC’s struggle to survive may define the entire industry.
Advancements in technology and competition within the telecommunications industry have affected Global Communications. Stock values have dramatically decreased, customers have been dissatisfied with the services offered, employees have been threatened with layoffs and the company-union relationship has been negatively affected. GC must regain its image by developing new services in a global market.
Global Communications will become an internationally competitive entity by providing advanced technologically services through partnerships, employee loyalty, and customer satisfaction. By responding to the needs of the stakeholders, GC will regain the profits it lost. Global Communications must respond to the immediate needs of the employees and Union by mending relationships. Secondly, the company must respond to the demands of customers for new and improved services. The most logical choice would be to form partnerships that will allow the company to provide services quickly and safely to consumers. Next, GC should expand its customer’s and increase the retention between established customers. Global Communications ultimate goal is global expansion within three years. As plans are implemented to rebuild broken relationships, improve customer service, increase customer retention, and become global, GC should begin to regain profitability it once had.
Seldom exist a single best solution to any problem. Rather there are a set or range of alternatives, one or more of which may work. (Problem Solving Based Scenarios: An Approach to Identify Opportunities to Create Value for the Business, n.d., p.7). Through the information that was gathered through benchmarking research, Global Communications can explore a variety of solutions.
The first proposed solution, GC’s initial approach to outsource call centers, has been selected by a number of companies as a means to reduce costs, including IBM and Honeywell. Both IBM and Honeywell have chosen to layoff and off-shoring. This approach does not address the stakeholder needs of the customers or employees. This solution alone does not meet the needs identified in the problem statement.
Delta Airlines and Global Communications have faced many of the same issues, and Delta’s approach provides a multifaceted alternative solution, each aspect was in direct response to the needs of various stakeholders including employees, the union, customers and share holders. After filing Chapter 11, Delta recognized the need for organizational commitment, which “is higher in organizations that fulfill their obligations to employees and abide by humanitarian values, such as fairness, courtesy, forgiveness and moral integrity.” (McShane, 2005,p.128). Placing emphasis on the value of employee contribution, the company held informative meetings to include employee input, giving incentives or rewards to employees, and provided up front communication. Delta’s proposed merger with Northwest Airlines promises to make Delta a global airline and increase stock over 65% in four years while saving Delta’s company-union relationship. Global Communications can be a leader in the telecommunications industry by addressing the interests of each stakeholder like Delta did.
Sears approached its decrease in market shares and profits by completely restructuring the company, beginning with a new CEO. With the need to improve internal leadership, processes, and performance, this huge undertaking requires a thorough understanding of “the real issues and opportunities from all perspectives.” (Problem Solving Based Scenarios, n.d., p.5). While this approach has unlimited value, the timelines for Global Communications must be considered.
Analysis of Alternative Solutions
Different solutions were evaluated against a set of weighted goals. The weight or importance of each goal was determined according to a scale of one to five; one being of low importance and five being of high importance. The probability of meeting each individual goal was rated on the scale thus, the best two or three alternatives were selected for further consideration. Two goals were rated as high importance because of the direct relationship with profitability. The direct relationship included increasing the customer base/retention and increasing the stock value. The next two goals, increasing customer satisfaction and maintaining positive feedback in employees’ surveys, were rated as medium to high importance. Success is represented by customer satisfaction. Finally, expanding the international customer base was rated as middle importance because the timeline for establishing a global presence is projected to take three years.
When the alternative solutions were evaluated against the weighted goals, one primary solution received higher a rating which was forming global alliances/mergers. A second solution, investing in employees and negotiating with the Union, received a lower score; a combination of the two solutions as a secondary solution receives the highest score of all.
Risk Assessment and Mitigation Techniques
The risks associated with each solution appear to be controllable, with benefits outweighing the overall risks involved. These risks can be minimized by careful planning. Wakeam ( 2003) identifies the following three risks associated with forming global alliances/mergers. First, cross-cultural conflict arising from the affect of political, cultural and social forces can be significantly reduced by researching some best business practices for a particular location. The company must learn to pay attention to marketing and advertising. Secondly, the potential for different visions and metrics among partners may change the direction of the business therefore, leading to alliance failure. The risks can be reduced by developing shared metrics, mapping key executives to their alliance counterparts, and holding regular meetings. Third, the effect of uncontrollable economic trends within various markets can quickly change alliance profitability. A company can help protect itself from consequences by frequently monitoring the status of reports and watching for new risks that may occur.
One key factor in Global Communications’ success would be investing in employees and negotiating with the Union. The company’s risks further damage of relationships if efforts are not successful. Employees lack of motivation, unrealistic goals and performance standards, unmet expectations for rewards/incentives, and the inability to reach agreements must be addressed by consistent communication. Placing emphasis on the value of employee input and stockholder needs are important.
Based on different solutions and the risk assessment, a comprehensive solution for Global Communications can be made to help the company address issues and realize opportunities. The decision to form global mergers has many benefits that will allow to GC to meet its goals. Establishing a global presence, improving and expanding services to consumers, expanding the customer base while saving retention and increasingly profitability are all goals GC has established to try to meet to become successful again. Investing in employees and negotiating with the Union will also meet the company’s end-stated goals, directly improving the relationship between the two.
The challenge for implementing the optimal solution requires commitment from management support and employee contribution. According to Bateman, implementation requires four steps that will help ensure this commitment: (1) define the necessary strategic tasks in a simple language; (2) evaluate the organization’s ability to implement those tasks; (3) develop implementation agenda; and (4) implement the plan while monitoring the progress being made. The tasks for implementation of GC’s solution have been indentified: introduction of new services; formation of global mergers; investment into the employees; and Union negotiation.
Global Communications must realize four major challenges before implementation can begin. These challenges include: “(1) the organizational immune system, (2) numerous complex variables, (3) the interconnectedness of elements affecting change, and (4) the need to change everything at once.” (Kotelnikov, 2008). Effective implementation may be limited by the organizational immune system or complex variables such as technology and organizational arrangements. Any change can create a ripple effect within the organization because of interconnected nature of organizational elements. The desired outcome can only be reached by making changes within overlapping issues.
The plan for Global Communications will be guided by a committee whose members include executive management and middle management. This committee is responsible for the various aspects of implementation, picking team leaders and members, and determining the extent of decision-making to be assigned to each team leader. During the first month the committee should develop a new vision statement for the company and select team leaders and members. All disruptions in implementing should be reported to the committee.
The first strategic task, the introduction of new products and services to meet consumer demands will be addressed by the Customer Response team. The team leader should be someone who is trusted and well-respected. The team members should include various performers with customer experience. The team should research customer’s needs, identify customer service issues and opportunities, and conduct benchmarking research for addressing the findings. Initial findings should be reported to the committee within the first three months. The second task which is forming alliances/mergers’ will be assigned to a new Strategic Alliance Team. They will identify potential partners who can share GC’s vision and provide services to the customer’s needs. The team should identify best practices within the industry for the merger’s to make recommendations as needed. Team members should be familiar with Global Communications’ financial status. Any recommendation should be submitted to the committee within six months.
The next task would be to invest in the employees. Creating a successful Employee Incentive Program (EIP) according to best practice standards would be beneficial to the employees. The EIP director will evaluate incentive/reward options according to the benchmarking research that was conducted. Some options include stock distribution, pay for performance, or skill pay for cross-training. The overall program should focus on alignment with Global Communications’ vision and establishing feedback through communication. All EIP activities should be approved by the committee.
The last task is to negotiate with the Union. Communication between the EIP director and Union representatives is essential for issues to be resolved in a timely manner. The EIP director does not have the authority in such matters. However, the EIP director should report any outstanding issues to the executive management team. Management and the EIP director both need to be present at every Union meeting.
Evaluation of Results
Global Communications’ strategy to turn the company around within a three year period will be evaluated using specific metrics and targets as related to each end-state goal that was previously discussed. First, GC will watch stock value as a metric for overall profitability. Stock values have decreased by half and the company expects to increase stock value by 25-35% annually, thus allowing for a projected three-year recovery time frame. Second, GC expects customer’s to be satisfied therefore, satisfaction scores should improve annually by 5-10% as services are expanded through alliances. Third, as the demands of customers are met GC anticipates a 15-25% annual customer base increase and a 5-8% annual customer retention improvement. Fourth, as Global Communications improves the relations with the Union and employees, the company should exceed expectations in 75-85% of annual morale and job satisfaction surveys. Finally, the percentage of international customers within the customer base should increase to 25-35% within the three years.
The metrics chosen for each end state goal are derived mainly from existing reports. Using a new measuring system for evaluation is not recommended. These metrics do not take into account uncontrollable economic, organizational, or social variables. The assumption is made that the implementation process for all solutions will be a success. Failure to meet these expectations should be evaluated by management.
The challenges for Global Communications’ are clearly defined. The company must make informed decisions to ensure survival in a competitive market. Global Communications must restructure services by entering into mutually beneficial partnerships. This will allow for expansion of its customers’ base. GC can then start to focus on becoming internationally competitive industry by exploring alternative solutions as they are developed. The company must also restore broken relationships with employees and re-build its reputation. With the understanding that integrity is of most importance, this will help ensure success in the industry. In addition, Global Communications must determine to build organizational commitment to increase job satisfaction, employee performance, increase morale, and customer satisfaction and retention.
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