Problem Solution: Global CommunicationsGlobal Communications (GC) is a telecommunications company with a decreasing market share and stock value. Too much competition within the industry is a problem. Competitors have penetrated the market offering progressive technology at affordable prices. In an attempt to mitigate these issues, Global Communications has decided to implement a bilateral strategy that requires downsizing the company's current union-staffed, domestic, technical call-centers by outsourcing labor to foreign countries, and to realize growth through the introduction of new services. Benchmarking is a tool in analyzing this decision.
Situation AnalysisIssue and Opportunity IdentificationThe competition amongst communication companies is fierce with the local, long-distance, and international markets. Cable companies have emerged into the market with television, Internet, and telephone services. The senior team at Global Communications has initiated a cost-savings measure to improve profitability and market the company on an international level with the goal of becoming global.
The cost-cutting measure is to outsource the technical call-centers to India and Ireland.
Outsourcing will reduce call-center unit costs by 40%. Some of the current technical call-center representatives will be relocating to expanding consumer call-centers, with a 10% salary decrease. Releasing many technical call-center representatives is necessary in this plan. Some senior management leaders are not displaying emotional intelligence with union and employee communications. According to McShane and VonGlinow (2005), 24% of employees are chronically angry at work because they believe their employer violated basic promises and did not fulfill the psychological contract. Global Communications' employees recently negotiated their union contract and conceded to a 20% education and health benefit reduction. Employee morale and continued productivity are concerns of the senior management. Outsourcing will lower the employees' organizational commitment. Employees with a high-level of emotional commitment are more motivated and perform superior job performance (McShane & Von Glinow, 2005). The union...