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Problem Solution: Global Communications Mba 500

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Problem Solution: Global Communications

MBA 500

University of Phoenix

Problem Solution: Global Communications

Global Communications (GC) finds itself at a crossroads and must act quickly to solve the current dilemma. GC has seen it's revenues dip and due to intense competition in the industry and the stock price has dipped from a high of $28 three years ago to it's current price of $11 a share. The management group has decided that it must act now to increase revenue by introducing new services through partners and reduce costs by outsourcing call centers currently hosted in the United States overseas to India and Ireland. But management did not involve one of it's key stakeholders, the Technology Workers Union, in the decision process and that group is now threatening to take legal action. With many workers faced with either job losses or a reduction in salary, employee morale is at an all-time low.

Describe the Situation

Issue and Opportunity Identification

There is too much competition in the telecommunications industry and GC does not stand out as unique. Cable companies and other telecommunication providers are all trying to reach the same market. Wall Street is not looking favorably on the industry as a whole and coupled with GC low earnings has caused the company's stock price to drop. To complicate matters the union is concerned about the plans to reduce costs by outsourcing their call centers to cheaper sources of labor in foreign countries. If they take legal action it could cast a cloud over the company as a whole causing it's stock price to continue to languish.

GC is focused on growth through the introduction of new services, focused on small businesses and consumers. They are partnering up with a satellite company to offer video services. They are also working with a wireless provider to offer Internet access using wireless telephone and PC cards. If the stock market likes the cost cutting moves it could boost the stock price. Also by outsourcing the call centers to lower labor cost markets it will allow the company to grow quickly since those markets have an abundance of highly-trained, low cost labor. But the cost-cutting moves are in danger since the company does not have the backing of the Technologies Workers Union.

The decisions made by the management group were handed down without taking into consideration the effect they would have on all the stakeholders. This apparent lack of emotional intelligence threatens to be an ongoing problem in the company if not addressed in some way.

Stakeholder Perspectives/Ethical Dilemmas

The key stakeholders for GC include the Technology Workers Union, the management group at GC, the stockholders, the partners involved in the new business developments and the customers.

Customers are an important stakeholder in GC. The moving of call centers can have a negative impact on customer satisfaction. Take note of the case of Everdream software. They partnered with a top outsourcing firm and trained foreign workers in the U.S. for months before moving their call center from North Carolina to Costa Rica. The result? Despite his careful preparation, customer satisfaction dipped from 95 percent to the low 80s within a month, owing mostly to language barriers and phone static. A scant seven months later, Everdream pulled the plug and moved the call center back to North Carolina. Customer satisfaction quickly went back to its previous levels. (Sauer, 2006)

GC must work to rebuild its partnership with the union. The union is trying to protect the jobs of its members. The company could offer a plan that would reduce headcount by attrition and voluntary separation programs. At the same time, it could increase the staff at the new call centers as growth occurs due to the new partnerships. Instead of laying-off skilled work force, GC could utilize them in other areas and as new positions are needed add workers to the new call centers. With a partnership in place with the union, there would be no legal battle and no bad press to hurt the stock price.

Frame the "Right" Problem

GC will become a leader in telecommunications by fending off competition, increasing employee morale, rebuilding it's partnership with the union, reducing costs and becoming a leading innovator in the industry.

Describe the "End-State" Vision

GC will know it has succeeded when the stock price for the company exceeds $28 a share, the level of three years ago. The new partnerships in video services and wireless Internet access are growing at a steady rate and providing the company with significant new sources of revenue. The new call centers in Ireland and India are launched and do reduce costs. Employee morale will improve due to a renewed partnership with the union that allows fewer people to lose their jobs while placing new jobs in the newly launched call centers. And by improving customer satisfaction with the quality of the services being offered and the technical expertise now available at the new call centers.

Identify the Alternatives and Benchmarking Validation

GC has seen its stock price dip and wants to address that by lowering costs and outsourcing its call centers. That will allow GC to lower its labor costs by hiring employees in foreign countries that demand lower wages. Using outsourcing successfully is essential to the financial stability of Global Communications (GC). Outsourcing has become a popular way for many businesses to cut costs. Call centers have been outsourced longer than any other business operation, and companies are now outsourcing parts of their human resources departments (University of Phoenix library, Info Trac One File, 2003, p1). Companies such as Pegasus own and operate call centers all over the world. This Dallas based company has nine centers located in America, Europe and Asia (University of Phoenix library, Info Trac One File, 2003, p1). Outsourcing call centers has been a trend for many different types of business. For example, AOL/Time Warner outsourced its helpdesk to call centers in India in order to remain competitive with companies such as Google and Yahoo! (Srinivasin, 2003, pNA). These countries have skilled labor pools that are willing to work for lower wages thus saving the company millions of dollars over time. GC



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