Global Communication - Problme Solution

Problem Solution - Global Communications Corporation

Thomas D'Amore

MMPBL 500

Ken Edick

23 Feb 2007

Problem Solution: Global Communications Corporation

Problems or challenges are an inevitable part of any business environment. Many business organizations have to make critical decisions on a routine or daily basis and most of these decisions are essential to their operations and may have a huge impact on their company's financial health. To effectively handle these problems, businesses have to adopt problem-solving models to assist them in identifying the problems, the available alternatives, assist in the implementation or execution of solutions, and generally serve as a guideline in problem-solving.

Using Global Communications (GC) as the subject of the case study will describe how a strategy was designed and implemented to assist the organization in identifying problems, establishing alternatives, identifying strengths and weaknesses, and selecting the most appropriate course of action. The paper will show how GC has arrived at the most optimal solution or solutions that would address all the organizational problems and attain all its business goals by applying the problem-solving model. Gaining an understanding of the company's background would provide a solid foundation needed in finding a resolution to the problems at hand.

Situation Background

Due to increased competition in the telecommunications industry, Global Communications has been struggling to maintain its market share. In the past three years, the company has seen a significant 50% depreciation in its stock value. In addition to increased competition in the telecommunications industry, the organization feels vulnerable from cable companies which recently started offering all-inclusive communications solutions. GC is currently ill-equipped to compete with cable and telephone companies that are offering complete packages for television, telephone, and computer communications. As a response to the situation, members of GC management team has formulated a strategic and aggressive approach which involves expansion of GC's service offerings and implementing cost-cutting measures.

The first part of the strategy involves creating an alliance with satellite providers in order for GC to expand its menu of services. GC hopes to start offering video services and satellite version of broadband internet services. In addition, GC hopes to offer remote internet access to its customers. By expanding its services, GC hopes that customers will find no need to switch companies since GC already provides an all-inclusive communications solution. Furthermore, the expansion will entice new customers to contact GC and potentially become customers. Global Communication is targeting small businesses and consumer customers with this service expansion. As a result of this expansion, GC's market share will become more stable, diverse, and more competitive than before.

The second part of the approach involves cost-cutting measures. After arduous negotiations with the Technologies Workers Union, GC was able to trim pay down by 10% and medical insurance and education benefits by 20%. The company further decided that cutting pay and benefits would not be sufficient; therefore, more serious action was needed. This came in the form of outsourcing technical call centers and other technical positions to India and Ireland. In addition, GC needed to increase technological sophistication which will allow them to gain entry in the global market. By outsourcing jobs to India and Ireland, the company will be able to achieve three of its goals, entry into the global market, an increase in technological sophistication, and a reduction in operating costs, specifically the cost of labor.

GC's board approved the measures to outsource the jobs without consulting and negotiating with the Workers Union. Besides the legal issues involved with the negotiation, GC has an added concern of deteriorating employee morale which may affect the company's productivity, attendance, and loyalty. The employees are critical to GC's success, only through employees' cooperation can GC execute its business strategies to grow and succeed. In order for GC to have smooth transition and implementation of their growth initiatives, they have to perform an in-depth analysis of their situation, identify the issues and opportunities available, and implement the most appropriate course of action.

Issue Identification

GC is presented with several issues or concerns, which the organization must address appropriately and in a timely manner. Global Communications' main problem seems to be their struggling financial health. In the past three years, the company's market share has diminished by an astonishing 50%. This problem can be attributed to increased competition in the telecommunications industry and limited service offerings by GC making them uncompetitive. In addition, the cost of doing business, specifically labor, has been steadily increasing and affecting the company's profitability. In addition to poor financial health, GC's other problems include poor employee morale, a rift in the relationship with the union, a lack of technical sophistication, a non-diverse portfolio of services, and increased competition in the telecommunications industry.

In order to resolve these problems, GC has devised a few measures to correct these problems; unfortunately, these measures have resulted into second-tier problems. For instance, the poor employee morale is a result of Global Communication's reduction in force, unfavorable compensation and benefit modification, and GC's announcement of outsourcing the jobs to India and Ireland. GC's employees and the union are extremely unhappy with GC's business methods. First, the workers and the union had to agree to a 10% pay cut and 20% benefits cut. After completing the negotiations with the Union, GC made an announcement that the company will outsource the jobs to India and Ireland. This announcement came as a full surprise to the employees and the union since GC failed to consult and communicate the decision to outsource with any representative from the union.

With all these issues or challenges facing GC, the organization must develop a strategy to address these