Situation Analysis and Problem Statement: Global Communications

Situation Analysis and Problem Statement: Global Communications

Situation Analysis and Problem Statement: Global Communications

Situation Analysis and Problem Statement: Global Communications

The realm of communications within a global economic environment is critical because of how critical effective communications has become in comparison with corporate operations. Global Communications (GC) while finding it necessary to adopt a radical business strategy in order to stay competitive, seems to have relegated the importance of communication among its corporate stakeholders to one of convenience and commonplace. GC is currently faced with a more than 50% loss of capital valuation on the stock market and is faced with increasing competitive pressures from a myriad of smaller, more nimble competitors in the telecommunications industry. In order to meet these competitive pressures, GC, and its executive staff, has devised a strategy whereby several of its call centers will be outsourced to both Ireland and India resulting in the lay-off of a considerable number of staff. Additionally, GC has intends to partner with a satellite communications provider to move into wireless services and intends to realize up to 40% savings on a per call basis by relocating its technical call centers overseas.

Issue and Opportunity Identification

The primary issue for GC is whether to risk alienating a majority of its retained employees by the threat of further lay-offs as well as the scheduled reduction in pay for the remaining call center employees who will be retained. Clearly, while competitively attractive, this strategy risks affecting the operational integrity of the company based on its stated belief that its employees are one of its most valued competitive advantages. The opportunities are two-fold for GC: 1) the value for the company in reducing some of its operating costs by 40% or more is cannot be overstated, and 2) while perhaps finding it necessary to undertake such a strategy, GC’s executive leadership had an opportunity to involve the union and its leadership in the decision-making process and allow them to understand the long-term necessity of some of these decisions.

Stakeholder Perspectives/Ethical Dilemmas

There are three primary stakeholders involved in this situation and each is equally important. GC is a publicly held company and the shareholders expect it to be operated in a globally competitive manner and in a business environment where all major telecommunications competitors have, if not already outsourced call center operations, appear to be considering it, shareholders demand that GC take the lead in this strategy. Executive management is charged with the efficient and fiscally sound operation of the company and as such, they too must consider all competitive options. However, executive management must also consider effective employee relations since its immediate responsibility is the overall smooth operation of the company rather than the purely results driven perspective of the shareholders. As McShane notes, in the post-Enron world, executive leadership must now first guide by self-leadership rather than by fiat alone(2005). Finally, the employees, as represented by the union, while also expecting the company to be managed as competitively as possible, also maintain the expectation that their interests are important to such sound management and that their input in strategic management decisions of such magnitude will be considered. The primary ethical decision is not necessarily related to the outsourcing of jobs since, at the most basic competitive level, GC must consider this option in order to stay competitive or run the risk of far more pervasive lay-offs later by becoming uncompetitive through a failure to reduce operating costs over time. The ethical question is centered on executive leadership’s absolute failure to involve the employees, as represented by the union, in any phase of the decision-making process. While it could have been expected that the union would never agree to such as strategy, by being involved in the process it might have recognized the necessity and even if it had not, it could not have accused the company of ignoring it later as GC, in fact did.

Frame the “Right” Problem

As many companies have discovered in the past, developing a mission statement that aligns with the stated observations of executive leadership, or visa versa, is critical. While GC’s mission statement is not given it is apparent that it, as represented by Sy’s revelation that he believes GC’s competitive advantage lies with its loyal employees, is embarking on a strategy that runs