Gap Analysis: Global Communications

There are risks with any business venture. The marketplace is so unstable that a company that seems to be flourishing one day can fold in a short period of time. It is important for management and/or leadership to stay abreast of any technological advances, new services, etc. in order to remain competitive. Simply keeping up with the competition will no longer provide the results needed to secure a place in industry. Top companies tend to have a creative edge that separates them from their competition.

With the continual advent of new telecommunications services and technologies, the telecommunications industry is becoming increasingly competitive. Cable companies, able to provide customers with complete communications solutions, have taken a great deal of business from the telecommunications industry. And although Global Communications was, as recently as three years ago, thriving with stocks trading for $28 per share, this company has also fallen prey to the competition.

In response to the financial distress that has resulted from the overwhelming amount of competition, Global Communications' senior leadership has developed a restructuring plan to revitalize the company. This plan, which will call into question the company's ethical standards, must be implemented in excellence because the integrity of Global Communications is at risk.

This analysis will evaluate the ethical dilemmas that have surfaced in response to the new plan, how well Global's senior leadership has communicated the plan, which groups or individuals have an interest in Global, and how well the plan will be received by others.

Situation Analysis

Issue and Opportunity Identification

Global Communications stocks have depreciated by more than 50% over the past three years and are now only worth $11 per share. The amount of competition Global Communications faces has increased tremendously. In order for Global Communications to continue to survive in the telecommunications industry, the company must offer new, attractive services and find ways to cut costs and increase profitability.

In an effort to make this much needed company revitalization a reality, senior leadership has put together a restructuring plan that will include offering new services such as 24-hour internet access using wireless telephone or PC cards to its small business and consumer customers. To cut labor costs, Global Communications will move some of its technical call centers to India and Ireland. Outsourcing this labor will allow Global Communications to reduce the costs for handling calls by almost 40%. This will be a substantial savings for the company. However, because of the plan to outsource, thousands of current domestic employees will inevitably lose their jobs. Some will be allowed to relocate to other domestic call centers, but will have to take a 10% pay decrease.

Senior leadership thought that it was in the best interest of the company not to mention the proposed plan to anyone until it was approved by the board. However, senior leadership failed to realize the importance of discussing this proposed plan with the worker's union in advance to putting it into motion. This non-communication has strained the relationship between Global Communications and the workers' union.

Global Communications is in a place of desperation. If changes are not made quickly, the company will not survive.

Stakeholder Perspectives/Ethical Dilemmas

Perhaps the most important stakeholder in any company is the one who has funded the business venture. Global Communications investors are understandably less than happy that the company's stock has depreciated by over 50%. The company is under pressure to recoup itself and take its place as a successful entity in the telecommunications industry.

Global Communications employees and the workers' union are also very much vested in the company. In an effort to support the long term growth of the company, employees recently gave up 20% of their health and education benefits. Their sacrificing of these benefits is evidence that they are concerned about company growth and job stability. The workers and workers' union feel that is unfair to outsource jobs because of the rescinding of the benefits.

To the same end, senior leadership is working to ensure that Global Communications heads in a direction that will allow the company to increase profits by offering better products and services and cutting costs. If the company is not revitalized in the marketplace, their jobs are stake as well.

Global Communications senior leadership must decide which group of shareholders has more vested interests in the company? Is it more important to implement this new plan in an effort to quickly resolve some of the company's financial issues or to act in the best interest of the many company employees who face the possibility of unemployment? Was it ethical for senior leadership to ignore their responsibility to communicate with the union leadership before sending this new plan to the board for approval?

End-State Vision

After properly implementing its restructuring plan of offering new services and outsourcing labor to cut costs, Global Communications will become a major entity in the telecommunications industry. Shareholders will be more confident in the company because the stock will regain its value as a direct result of the new services offered.

Global Communications will earn back the trust of its employees. Because of the company's revitalization and financial success, the company will offer better benefits for its workers that include the return of those benefits that the workers gave up before the plan was implemented. Due to company growth, Global Communications will expand some of its domestic call centers and offer more jobs in the communities that were affected by the outsourcing.

Senior leadership has realized the importance of communicating with the worker's union. And, because of this realization, the two will have regular meetings to discuss important issues that could potentially affect the workers. According to Kinicki and Kreitner, "Face-to-face conversations, for instance, are useful for communicating about sensitive or important issues and those requiring feedback and intensive interaction (Kinicki & Kreitner, 2004, p. 13). Senior leadership will make extra efforts to communicate face to face with the workers' union. Global Communications will operate in a manner that holds to its "Our Edge is People" philosophy.

Senior leadership will make a commitment to continually evaluate any changes in the telecommunications industry. Global Communications will act accordingly and continue to thrive in the marketplace.

Gap Analysis

Global Communications' senior leadership must be sure that the new products and services will be successful in the market. If these are not successful, they must continue to develop new products and services until they are able to meet the needs of their client-base and potential clients. Offering desirable products and services will attract new customers and help raise the market value of the stocks and increase profitability. Senior leadership should also evaluate the company's waste and extra expenses to see if there are other areas where money can be saved.

Global Communications should offer severance packages for all of the employees that will be laid-off. In addition to financial support, Global should also provide career counseling services and training opportunities that will help the workers find new jobs.

Conclusion

The success of Global Communications is dependent upon the implementation of the new restructuring plan. Generally speaking, the telecommunications industry has changed, and Global Communications must change in order to remain competitive. However, change is not easy. And because the number of US companies outsourcing labor is growing, Global Communications' decision to move some of its call centers to India and Ireland will be scrutinized. In spite of the scrutiny, senior leadership must steer the company in a direction that will promote long term growth.