Problem Solution: Global Communications
All managers are concerned with one thing which is how to make the right decision in all problems thrown at them from different departments of the organization. Some problems are easy to solve while others require effective problem solving to analyze and decide on couse of best action.
Katrina Heinz, the chief executive officer of Global Communications (GC) was hired to increase company’s revenues and profits. Global communications is one of the many aching companies within the telecommunications industry. Too much competition within the industry has lowered GC stock values by more than 50%.
GC’s senior leader team has developed a new strategic globalization plan to realize growth and profitability. The plan would introduce new services, making new alliances and implying cost cutting measures. Cutting cost would include laying off huge numbers of employees and hiring others from India and Ireland.
The Technologies workers union has tried to work with GC to face its financial problems. They reduced 20% of employee’s education and health benefits. They expected GC to keep all of its employees and try to improve things for them in the future. CG never involved the union towards formulating its new strategic plan. The union was shocked that they were never involved in suggesting alternatives. Laying off huge numbers of employees and using thousands of foreign employees will set a precedent for the whole industry. The union president decided to utilize all of its resources to stop GC’s plan and help huge numbers of employees save their jobs.
The purpose of this paper is to develop a solution for GC to survive and grow in the competitive industry of telecommunication while retaining most of its employees.
Issue and Opportunity Identification
In this section GC problem is described and analyzed. Major issues and opportunities are discussed. The events that lead to the problem are described next.
World wide competition within the telecommunication industry has lead to diminished returns. GC is under tremendous economic pressure as its stock has depreciated more than 50% in the last three years.
The senior leader team of CG has put together a strategic plan to save the company and become a global corporation. They decided to cut costs by outsourcing small business technical centers to low cost more technical sophisticated centers in India and Ireland. They also decided to compete in local markets and step up towards globalization.
The downside of their plan was the huge number of employees that would be laid off or relocated with salary cuts. They decided to soften the blow of their plan by explaining to the employees and the unions the challenges they face. They decided to bring career counselors to help laid off employees with their future jobs. They also decided to create a new set of values to reflect today’s realities. They aimed at communicating their new plan in a way that would address the union and employees concerns.
The workers union reduced 20% of employee’s education and health benefits .
The union accepted to give up these major benefits to enable GC to cope with its financial difficulties and survive in its competitive environment. The union hoped that by giving up such benefits, CG would retain its current body of employees and would make things better in the future. The union considers GC’s new plan unethical as it manipulate around current contract conditions.
GC excluded inputs from the union and employees while formulating its new plan. They gave all reasons for the union to reject their plan. The union president declared that he opposes CG’s new strategic plan. He threatened to do all that could be done to prevent execution of the plan. GC has created a problem by deciding to force the union and employee to change their values instead of working a new plan with them taking in consideration their values.
Communication problems within the CG affected the way they formed their new strategic plan. The senior leadership team utilized a centralized decision making policy. They didn’t get input or feedback from all stakeholders, such as employees, union, contracted small business. They were not open to feedback from the union to win their support. They missed out on alternatives that could have been suggested by missing stakeholders. The didn’t benchmark with companies they have alliances with. They also missed out on opportunities to more effective ways of running each other’s businesses.
GC’s new plan is out of line with its highly publicized “Our Edge is People”. GC lose is its competitive advantage which comes from loyalty of its employees. GC has a history of treating its employees well. Employee layoffs and relocation will cause a major morale issue and will decrease loyalty of employees, thus decreasing productivity and losing GC’s main competitive advantage. Competitors will seize this opportunity of low morale within the company to come after GC’s best employees.
GC should have included the union as a partner during its negotiation towards developing a new plan to face financial difficulties. All avenues and alternatives should have been considered towards preservation of all stakeholders’ interests and values.
The Technology Workers Union is determined to utilize all its resources towards stopping GC’s plan.
Stakeholder Perspectives/Ethical Dilemmas
The stakeholders in this GC situation are the Board of Directors of GC, the Senior Leadership Team, the Technologies Workers Union representatives, and the customers and small businesses.
The board of directors is only interest of the well being of GC and its capability to rebound in the telecommunication industry. They mainly care to increase GC revenues and profitability. They trust the senior leadership and their chief executive officer that they hired six months earlier to turn around their company. The love the idea of outsourcing as it reduces unit costs for handling calls by nearly 40%. They support the transform into global corporation as a means to open new markets and increase profitability.
The Senior Leadership Team also care about profitability and growth. They aim at surviving and growing in the highly competitive telecommunication industry. They developed a strategic strategy plan to transform into a global corporation. They plan to enter the new local and global. To make up for reduced revenues, they plan to cut costs by laying off employees and hiring much cheaper employees from Ireland and India. They overlooked their companies competitive advantage which is their loyalty to employees. They decided to make hollow promises to fulfill in the future to ease the blow of their new proposed plan of laying off their employees. They don’t care for business ethical values. They don’t care to keep the highly publicized image of GC care for their employees. They believe in centralized decision making and lack the sense of organization communication.
The Technologies Workers Union is interested in the well being of their members. They care for their members to keep their jobs while enjoying appropriate benefits. They care to create more jobs for the unemployed. Even though they have no legal right to be included in GC formulation of business plans, but they offer to help suggest alternatives that would prevent employees from losing their jobs. They would like GC to exhaust all possible alternatives before laying off their employees. They showed their interest in GC existence as a reliable enterprise by making concessions in their employees’ benefits.
Customers and small businesses care to get the best service possible. They require swift and highly sophisticated technical support form technical call centers.
Ethical dilemmas come from competing values or rights when both of which are fair and reasonable. There are a number of values to consider that are at the heart of an ethical dilemma in the business setting. These are: trust, caring, accountability, fairness, respect, citizenship, integrity, and honesty, among others (Gomez).
In CG situation, the ethical dilemma arises from the conflict of interests between GC’s senior leadership team and the workers union. The senior leadership team care to layoff workers to cut costs and increase profitability and meet financial difficulties. The Union cares for its members to retain their jobs, while preserving their benefits. The union has no legal rights towards implying its needs. CG care to preserve the well established reputation of taking good care of its employees.
GC would like to increase its profitability and ensure its growth and survival in the highly competitive telecommunication industry. The senior leadership team has put together a strategic plan to cut costs and open up new local and global markets. They planed to cut costs by outsourcing of technical call centers for small business. They would layoff and relocate a huge number of their employees to use the more technically sophisticated and much cheaper call centers in India and Ireland. Increased revenues and provision of new services in newly opened markets would enable GC to grow and survive as an edible corporation.
Laying of employees would greatly influence the highly publicized image of GC. GC could lose its best employees to competitors. The workers union would use all of its resources to oppose the newly suggested plan.
GC lacks good organizational communication. Stakeholders and partner companies are not involved in decision making. Their input towards creation of more alternatives to solutions is not transferred within the organization. Low decision expectance it expected from stakeholders. GC existence and ability to compete in the telecommunication industry is questioned with its competitive advantage and loyal employees under threat. The new suggested plan should be altered to achieve an end state that is better preparing the GC for its expected global competition.
GC should De-centralize their decision making policy. Consider and be open to solutions to problems they get from their customers as well as their employees to decide on an effective plan. GC organization should be further modified to extend communications towards all stakeholders. Input and feed back from stakeholders should be incorporated in managerial decision making
. Company profitability should be accomplished by cutting costs and increasing revenues. Revenues could be expanded by opening new markets and providing more services in the local and global markets.
Employment satisfaction, security and morale should be at its highest attainable levels to ensure high productivity and reputation within the telecommunication industry. Competitive advantage must be maintained and expanded towards increasing the number of customers. Technical sophistication of call centers should be increased to meet customer expectation. This could be accomplished by more training and more selective selection of employees. A new set of values should be prepared taking input from all stakeholders to better reflect today’s realities. GC should build on the highly publicized “Our Edge is People” by showing more sympathy and compassion with its own employees. GC should maintain an ethical attitude towards its employees and customers by standing up to currently established contracts.
The end state could be further translated into specific goals that would measure the degree of attainment of the desired end state. The following goals are defined:
1. GC increases its profitability by more revenues and lower costs.
2. Local and global advertising to open new markets and provide more services.
3. Utilize a more effective network structure that includes all stakeholders by holding periodic meetings of all stakeholders to discuss different company issues.
4. Employment morale should be measured and alleviated periodically.
5. Establish a suggestion system to collect ideas and suggestions from all stakeholders. Use internal benchmarking to share information in a constructive way.
The degree of attainment of these goals would present the degree of attainment of the end state to be acquired by GC towards its solution of its current problems. To translate GC from its current situation to the end state, alternative solutions should be evaluated towards the attainment of our end state and end state goals.
Benchmarking and research is used to identify alternative solutions to the problem that will best achieve the desired end state and goals. The following three alternatives are considered.
Alternative one suggests that GC lower the salaries of all its employees on all levels of responsibilities. GC would publicize its stand as a team towards the financial difficulties they meet. Instead of letting go a number of fellow employees, all GC employees would share the responsibility towards increasing profitability and increasing market share. A retention bonus would be suggested to make up for cuts in salary once the company’s profits rebounds. The companies well publicized “Our edge is People” would be built on to provide more character and integrity within the telecommunication industry. GC competitive advantage would be increased against competitors. GC would maintain and continue its history of treating its employees well. More customers would turn towards GC for its moral stand towards problems. Productivity would increase due to higher morale and loyalty within the company’s employees. The workers union would further support GC towards its preservation of its employees. GC ethical image would benefit from keeping current contract conditions.
GC would also alter its decentralize decision making policy. GC would alter its network communication structure to include all of its stakeholders. GC would use internal benchmarking to share information in a constructive way.
Alternative two suggests that GC merge with a competitor (Kurylko, 2002). The merger would reduce costs and increase revenues due to increased of market share. GC would cut the costs by combine similar functions from both companies into a single headquarter function. Larger company resources are more capable of competing against smaller companies. Markets of both companies would be integrated.
Alternative three suggests the union further decrease its member’s benefits aiming towards decreasing company costs. Instead of closing small business call centers, GC could lower the number of employees working within these centers, getting rid of the lowest performing employees. Competition towards avoiding being cut would encourage employees to high productivity.
Analysis of Alternative Solutions
The relative importance of each weight is a major determining factor in the solution to best suit the achievement of end state. High profitability would greatly influence the achievement of GC’s growth and profitability. Opening of new markets would strongly influence GC achievement of its goals. New markets would widen market share and increase revenues. The effective network structure would also strongly influence GC survival as a viable company. Effective communication within the company would ensure more alternatives to be presented and chosen from towards selection of solutions to problems and situations that GC would encounter. Employment morale and internal benching are important factor in productivity of GC.
The first alternative scores the most in Table3. First alternative is chosen to be the solution to implement towards the achievement of the end state and end state goals.
Risk Assessment and Mitigation Techniques
Risk of salary cuts would lower the morale of highly skilled employees that require higher salaries for their qualifications. Competition could aim for and offer higher salaries for GC’s best people. Production would then decrease and more cuts in costs would be required.
The risk that the Savings from further decrease in member’s benefits and partial layoff of lowest performing employees working within the call centers could not be enough to raise profitability of the company. With lower profitability, GC growth is impossible.
The risk of all three alternatives is moderate and is not a determining factor in the alternative to utilize towards the achievement of the end state and end state goals.
The optimal solution that would guide GC towards the transition towards its end state is described in this section. GC should lower the salaries of all its employees on all levels of responsibility. GC would stand as a team, with each employee putting his share towards the survival of the company. Emotional Intelligence concepts would prevail within company employees as integrity and unity gets publicized. GC ethical image would benefit from keeping current contract conditions. The companies well publicized “Our edge is People” would be built on to provide more character to GC. GC competitive advantage would be increased as GC would maintain and continue its history of treating its employees well. Productivity would increase due to higher morale and loyalty within the company’s employees.
GC would promise a retention bonus should things get better in the next three years to make up for cuts withstood due to financial difficulties. The workers union would further support GC towards its preservation of its employees. The union could help in the future cut on employees’ benefit to show its willingness to stand with GC to support its survival in case more financial difficulties are encountered. GC would build more alliances worldwide to open new markets and increase its market share.
GC would manipulate a decentralize decision making through a new communication network that includes all of its stakeholders. GC would collect input and feedback and share information in a constructive way.
GC would publicize its stand as a unit towards its financial difficulties. GC would declare a 5% decrease in all its employees’ salaries. GC would declare a 15% retention rate in the following three years once growth and profitability is attained. GC would publicize its new communication network and encouragement for stakeholders to submit ideas and suggestions.
Evaluation of Results
GC would be able to reach its state goal of profitability and growth utilizing the suggested solution. Loyalty and productivity within GC employees would be alleviated. GC would gain more competitive advantage and emotions against its competitors.
Increased profitability and attaining of globalization status will measure the success gained from implementing the suggested solution. Employee’s morale and productivity would measure the decentralized decision making and effective company communication within the company.
Strategic decision making within some organization have the largest and longest affect on this organization success towards achieving its goals. Effective communication within GC would have collected inputs and ideas from all stakeholders. The senior professional team should utilize the ideas and feedback collected while formulation of business plans. A plan that includes and consider all interests of all stakeholders would be only possible to achieve only when all stakeholders input have reached the decision making group.
GC ethical dilemma of laying off employees could be avoided while still increasing profitability and growth. With GC standing as one unit towards its financial difficulties, GC’s competitive advantage and care for its employees would ensure its readiness for growth into the global market.
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