Situation Analysis and Problem Statement

Situation Analysis and Problem Statement

Global Communications is facing many challenges in an effort to compete in an ever-changing technological time. Global Communication would benefit from utilizing the 9-step problem-solving approach when forming alternative to evaluate for their business plan. Using this problem-solving method will help the company to identify the key stakeholders associated and recognize the possible ethical dilemmas that may result from stakeholders having competing values. The method will help them recognize the existing problem, and how they can select the alternatives that will achieve their end-state goals. The plan will help them implement their optimal solution and evaluate any risks associated with it. Understanding the current environment is essential for Global Communications to obtain the best benefit from using the problem-solving method.

Situation Background (Step 1)

Global Communications is in a precarious situation. In the past three years, Global Communication's stock price has suffered over a 50% depreciation, tumbling from $28 per share to $11 per share. Their business has suffered partially because of the highly competitive industry in which they operate. Throughout the past several years, the cable companies have entered the telecommunications market offering complete solutions, including computers, television, and telephone services (University of Phoenix, 2006). Additionally, due to globalization, there are now local, long-distance, and international markets competing for the same business (University of Phoenix, 2006).

In an attempt to compete, Global Communications has developed a new two-fold business plan. First, Global Communications plans to introduce new services to their small business and consumer customers. Additionally, Global Communications has aligned with a satellite provider to provide satellite television services and internet broadband. Global Communications has also partnered with a wireless provider to allow small businesses to access the internet using a wireless telephone or PC card (University of Phoenix, 2006). Second in the business plan, is to implement several measures to increase profitability by cutting costs. The cost cutting measures include outsourcing the technical call center to India and Ireland, resulting in domestic job losses. Some employees whose positions are being outsourced can be relocated into the consumer call center, but those employees will have to take a 10% pay cut. To ensure that both of these initiatives work, the company plans to increase marketing on an international level (University of Phoenix, 2006). Both pieces of the company's new plan presents them with several issues that need to be realized and many opportunities that should greatly benefit the company's future.

Issue Identification

Global Communications has several issues that they are currently confronted with. The first issue is that their stockholders are disappointed with the company and the waning telecommunications industry as a whole. The lack of stockholder confidence has resulted in more than a 50% decrease in the stock price for Global Communications during the past three years. Three years ago, the stock was trading at $28 per share, compared to $11 per share now (University of Phoenix, 2006).

Another issue that the company is faced with is a potential public relations nightmare. The company has stated many times that their loyal employee base gave them the competitive edge (University of Phoenix, 2006). The most recent move by the company, to outsource jobs and layoff one thousand employees, is inconsistent with this once highly touted philosophy. A public relations disaster is certain if the company fails to address this inconsistency.

As a result of Global Communication's outsourcing plan, the company is going to face difficulty from its employees and the labor union. The union is upset because they recently gave a 20% concession in the health and education benefits in hopes of avoiding an outsourcing situation (University of Phoenix, 2006). The union feels that they have been slighted and not included in the decision-making process.

If the company follows through with its two-fold plan, Global Communications still faces stiff competition from other telecommunications companies and the cable providers that are encroaching on the market. Overcoming the competition of the cable companies is going to be one of the critical issues that Global Communications must address.

The outsourcing plan that Global Communications will be implementing provides them with excess real estate the vacated technical call centers. While this may be a lesser issue compared to some of the other ones the company is facing, it is still an issue that the company will have to resolve. Global Communications will have to decide to sell, lease, or fill this real estate with other operations. Although faced with these issues, Global Communications also recognizes that they have several opportunities that can be realized through this process.

Opportunity Identification

Global Communications has the opportunity to implement cost-cutting measures. Increased profitability should follow and lead to an increase in stockholder confidence and to an increase in the stock price of the company. Global Communications also has the opportunity to work with other companies and providers. Forming strategic alliances will help Global Communications compete with the cable companies, because now they will be able to offer video services, a satellite version of broadband, and internet access with wireless telephone or PC cards. By setting up the technical call centers in Ireland and India, Global Communications has the opportunity to live up to its name by being truly global. They can expand services and market themselves internationally. By relocating the call centers internationally, Global Communications has the opportunity to reduce their labor costs while hiring a thousand new technical salespeople. Global Communications also has the prospect of repairing their relationship with their employees and the labor unions. Handling the outsourcing and layoffs in a professional, caring manner, they can mitigate the resentment from the employees. Global Communications has the opportunity to provide job-training and career counseling to employees that will be terminated. For employees that decide to transfer to the consumer call centers, the company can offer a retention bonus to alleviate the impact of the salary cut that these employees will face. Buy-out and severance packages could be extended to employees who are losing their job to soften the financial hardship they will face. Global