Mba500-Problemsolution-Globalcommunications

PROBLEM SOLUTION: GLOBAL COMMUNICATIONS Problem Solution: Global Communications Fred Nouri University of Phoenix Problem Solution: Global Communications Global Communications (GC) has seen its market share shrink due to increased competition from carries, such as the cable companies. To address this situation, Global Communication executives have devised a comprehensive cost reduction strategy. A major component of this strategy is to reduce Global Communication’s union labor cost through outsourcing and reduction in pay. While labor cost reduction is an attractive and viable option for a company, ineffective negotiation with organized labor can prove to be costly. It is fair to assume that Global Communication has not fully explored all options in their quest to reduce costs. As the paper illustrates, it may benefit the company to engage its workers and union representatives in and to seek solutions from them directly. In devising their strategy, Global Communication should also consider lessons learned from companies with similar circumstances and the experiences gained from their efforts, especially in global expansion. Situation Analysis Issue and Opportunity Identification Faced with increased competition, Global Communication finds itself in a difficult situation. Cheaper, more desirable products and services form competitors, such as cable companies, resulted in market share losses to the point where Global Communication’s shares have lost over 50% of their value in less than three years (“Scenario: Global Communications”, p. 1). To survive, the company must offer more technologically advance solutions to its customers, at a cheaper rate than the competitor. As part of a comprehensive strategy to regain market share, Global Communication decided to outsource their US based call centers to Ireland and India. Doing so will benefit the company in two ways. First, it will bring in the expertise that is needed to offer more technologically advanced solutions to its customers, and secondly, the cost of acquiring this expertise will be reasonable. As Global Communication CEO, Katrina Heinz stated, “India and Ireland have that expertise and for dirt cheap” (“Scenario: Global Communications”, p. 4). Global Communication is hoping to reduce its per-unit cost as much as 40% through this outsourcing. Global Communication’s outsourcing strategy involves operations and people in different cultures and environment. As such, the company is certain to face certain cross-cultural conflicts. Therefore, Global Communication should take steps to avoid these conflicts as much as possible. Kreitner & Kinicki (2003) advise, “Success or failure, when conducting business across cultures, often hinges on avoiding and minimizing actual or perceived conflict” (p. 493). By hiring an experienced International Consultant, Global Communication can gain immediate access to knowledge and expertise required to successfully negotiate and operate a business in Ireland and India. International Consultants are typically managers, with expertise in international business environments. The consultants can help in navigating through governmental processes, business negotiations, and business operations. When conflicts arise, “Consultants also can help untangle possible personality, and inter group conflicts from conflicts rooted in differing national cultures” (Kreitner & Kinicki, 2003, p. 494). Global Communication executives would like to cut employee costs by outsourcing call center jobs. In doing so, they need continued support and cooperation of workers, particularly the union workers, even though some of the same workers will lose their jobs due to outsourcing. The management failed to include and obtain buy-off from the union workers, who are critical stakeholders in GC’s future performance. As seen from the scenario, the union’s representative learned about the strategy after the plan was already approved by the board of directors. Doing so, the management in Global Communication created a conflict with the union. “Conflict is a process in which one party perceives that its interests are being opposed or negatively affected by another party.” (Kreitner & Kinicki, 2003, p. 486). Not understanding all the reasons behind the outsourcing strategy, and not being part of the decision making process, the union workers have adopted an in-group thinking attitude, believing the company is eliminating their jobs purely for the purpose of making bigger profits. In an in-group thinking, “Members of in-groups tend to see themselves as unique individuals who are more moral than outsiders, whom they view as a threat and stereotypically as all alike” (Kreitner & Kinicki, 2003, p. 508). This may have a severely negative impact on GC’s productivity and competitive advantage. GC’s management has an opportunity to reduce in-group thinking and inter group conflicts by increasing contact between different groups of workers, or Contact Hypothesis. Kreitner & Kinicki (2003) write, “According to the contact hypothesis, the more the members of different groups interact, the less inter group conflict they will experience. (p. 493). By increasing contact between the groups, union workers will see that they are not alone in paying the price for the company’s growth. Global Communication executives also bypassed the established organizational communication channels by not including the Union Representative, Maria Antez, during the strategy discussions. Instead of receiving clear and complete information, the union workers learned about the outsourcing through the grapevine. Information received through grapevine may be distorted, inaccurate, or incomplete, causing employee discontent, confusion, or negative attitude. According to McShane and Von Glinow (2004), “Employees develop more negative attitudes toward the organization when management is slower than the grapevine in communicating information” (p. 346). Global communication management has the opportunity to use the grapevine communication channels for careful distribution of information and thus gaining the trust and cooperation of workers. As Kreitner & Kinicki point out, “The key managerial recommendation is to monitor and influence the grapevine rather than attempt to control it. Effective managers accomplish this by openly sharing relevant information with employees.” (p. 542). In its survival strategy, Global Communication relies on continued service and organizational commitment from its highly trained workforce. Organizational commitment is referred to as, “employee’s emotional attachment to, identification with, and involvement in a particular organization” (McShane & Von Glinow, 2004, p. 126). Due to the looming layoffs, the workers feel abandoned and betrayed by the company. The emotions of abandonment and betrayal may lead some workers to leave the company. Remaining workers may feel that they should not put 100% efforts into their work, causing productivity problems. Both of these situations will have a negative impact on Global Communication’s competitive advantage and must be addressed. According to Mcshane and Von Glinow (2004), “Employees with high levels of affective commitment are less likely to quit their jobs and be absent from work. Organizational commitment also improves customer satisfaction because long-tenure employees have better knowledge of work practices, and clients like to do business with the same employees” (p. 127). Therefore, Global Communication should make a serious commitment in regaining its employee’s trust and commitment to the company, thereby retaining as many of the skilled labor force as possible. A good start for Global Communication management is to work on five area, suggested by McShane and Von Glinow’s to build employee commitment. The five areas are, offering justice and support, job security, organizational comprehension, employee involvement, and trusting employees (McShane & Von Glinow, 2004, p. 128). In devising the business strategy, Global Communication management have traditionally failed to involve workers, specifically representatives from the organized labor. Doing so, the management created an atmosphere of distrust between the union and the management. Union workers learned about the layoff and outsourcing through the grapevine without being fully aware of challenges that Global Communication is facing, and therefore did not get a chance to offer their own solution. On the other hand, the management also does not trust the union workers. They intentionally kept the union representative away from the decision making process, only engaging her after the plan was leaked out through the grapevine. Lack of trust between the management and the union is the reason behind the coalitional model of decision making, where, “people disagree on goals or compete with one another for resources. The decision process becomes political, as groups of individuals band together and try collectively to influence the decision” (Bateman & Snell, 2003, p.84). As we can see from the Andre Mustov’s memorandum of March 10, 2004 to Katrina Heinz, the union is attempting to change the strategic decision of outsourcing by staging a strike (“Scenario: Global Communications”, p. 6). One way to resolve the issue of coalitional decision making is to give opposing individual the opportunity to work collaboratively toward the same goal. The idea is to reduce the politics involved in the decision making process and achieve a better decision. According to Bateman and Snell (2003), “One of the best ways to reduce such politics, and to make sure that constructive cognitive conflict does not degenerate into affective conflict, is to create common goals for members of the team” (p. 84). For example, Global Communication can invite representatives from all levels of the organization, including the union, and present the challenge facing the company and ask them to work toward identifying a solution. Doing so, the management not only will have the buy-in from all stakeholders involved, but it may also discover better solutions or an opportunity that was not thought of previously. Stakeholder Perspectives/Ethical Dilemmas There are various stakeholders with differing perspectives and interests. As such, conflict arises when, “one party perceives that its interests are being opposed or negatively affected by another party” (Kreitner & Kinicki, 2003, p.486). Obvious stakeholders in Global Communication are the shareholders; individuals who have purchased company shares and expect a reasonable return on their investment. As such, the shareholders are more interested in the rise of their share value than ethical decisions made by the management of the company. For example, if the management decides not to layoff workers because it is not ethical, the decision will be opposed by the shareholders because it will cost the company and will probably have a negative impact on the stock value. The board of directors for Global Communication is primarily interested in pleasing the shareholders, and therefore, it’s primarily concerned with decisions which will bring profitability and add to the value of Global Communication shares. As such, the board of directors has the right to sound, profitable decisions by the management of Global Communication. However, the board of directors may be held responsible for unethical decisions made as well, and therefore, they are interested in the sound strategic decisions, holding the management accountable for these decisions. Management of Global Communication is primarily interested in profitability of the company and resultant share value increase. The management is responsible for productivity of workers and thus has the rights to employee’s commitment to produce given work in return for fair wages. Management values profits; or how the numbers look at the end of a given period. An ethical dilemma may arise when managers have to layoff workers in order to meet given profit margin. Additionally, management may face an issue if an ethical decision, such as increased expenditure for responsible waste management, may jeopardize the rights of shareholders to increased profits. The union workers, supervisors, and managers are primarily interested in job security and fair wages. They expect to receive pay for hours worked and they expect the work to continue without interruption. A dilemma occurs when the company’s management is forced to reduce the workforce due to less work or expectation of larger profit. Union workers have the right to be treated fairly, and thus, they value fair treatment. A conflict may arise from the definition of fair treatment. What the management considers fair may not be considered the same by the union. Non-union workers of Global Communication have the same interests, rights, and values as the union workers. They are also interested in fair wages for their jobs and they have the right to be treated fairly. A conflict may arise if the company decides to retain union workers and layoff the non-union employees with the same jobs or skill sets. Finally, the customers of Global Communication are interested in reasonable services by the company and they have the right to receive such services at a reasonable cost. The customers value technology because the industry is technology driven. More advanced technology means better, faster service at lower costs. Customers of Global Communication may be slightly concerned with ethical decisions made by the company, however, their primary concern, one that drives their buying decision, is the company’s ability to deliver needed services at lower costs than other companies. Problem Statement Global Communication will improve its profitability and increase its share value by obtaining the approval of all critical stakeholders in implementing a business strategy to lower expenses and expand into global market. End-State Vision Through its highly trained workforce, Global Communication is able to provide to its customers relevant technology, superior service and support, and superb value in products and services, globally. Alternative Solutions As part of a comprehensive strategy to bring the company back to profitability, increase the market share value, and become a global provider of technologically advanced solutions, Global Communication management has identified three specific goals. The goals are to reduce the per-call unit costs by 40% by outsourcing the call centers to Ireland and India, retaining 90% of the remaining, skilled workforce after the outsourcing and resultant layoff, and increasing the customer base by 50% through hiring of 1000 additional sales representatives. It is beneficial and important to consider alternatives which may produce the same results, and to weight the costs and risks associated with each alternative so that desired results are achieved. One way to achieve Global Communication’s strategy of successfully launching an operation in Ireland and India is to hire an International Management consultant. By doing so, Global Communication may be able to avert conflict which may arise from lack of knowledge about business operation in Ireland and India. As James Sebenius points out, “Cultural differences can influence business negotiations in significant and unexpected ways, as many a hapless deal maker has learned” (The Hidden Challenge of Cross Border Negotiations, 2004). An alternative to hiring an International Consultant may be to create an International division within the company and develop the required skills through education and hiring of internationally skilled workers. Global Communication’s strategy of outsourcing its call centers, and thereby realizing a 40% cost reduction in per-unit cost, is certainly a viable solution. Outsourcing has become a popular method to reduce costs among business, small and large, due to cheap labor available in countries such as India. However, not all outsourcing strategies produce the desired results. One alternative to outsourcing is called co-sourcing, where call handling is shared between the internal resources and an external partner (Co-Sourcing, 1999). Co-Sourcing is a viable alternative when the company wants to reduce costs associated with call handling, but also wants to retain control and expertise in-house. According to Frank Fuhrman, “Sharing the responsibility for customer contacts allows companies to focus on their core competencies while remaining intimately involved in their customer care programs. It permits them to retain control of the biggest fears many companies have with regard to outsourcing” (Co-Sourcing, 1999). In Global Communication case, systems and procedures can developed so that low-level calls not requiring technical knowledge can be answered by a partner company, while more complex technical calls can be handled by internal workforce. Global Communication will also need its highly trained workforce after the layoff. In order to be productive, at least 90% of remaining workforce after the layoff will have to be retained, because their skills are needed. Retaining employees means increasing the worker’s organizational commitment. To achieve this increased commitment, Global Communication has identified opportunities such as supporting the employee’s well being, or providing job security. An alternative to creating a better working environment, and thus increasing the worker’s desire to stay with the company, is to increase commitment continuance, where the employee is reluctant to leave because leaving will be more costly to the employee. For example, “Many firms tie employees financially to the organization through low-cost loans, stock options, or deferred bonuses” (McShane & Von Glinow, 2004, p. 127). Global Communication can offer stock options or retaining bonuses to selected employees, based on the needed skill sets, in order to pursue them to remain with the firm. Global Communication has also identified an opportunity to improve decision making and create a more collaborative working environment by involving the union workforce. The company desperately needs the union’s cooperation in achieving the desired end-goals. However, both the union and management have taken a hard stand, with the union threatening a strike, which will severely impact Global Communication’s strategy. It is then critical for Global Communication to obtain the union’s cooperation. Being an organized labor force, the Union has shown that it can effectively stop the operation of a large business, as is the case with UPS and Teamster’s union in 1997 (Big Brown, 1997). An alternative to taking a hard-nose approach in dealing with the union is for Global Communication to involve the union in the decision making process and to make the desired end-state a common goal. Working toward a common goal will reduce the conflict and us-versus-them mentality currently existing. Analysis of Alternative Solutions Although many alternatives are listed, the sum of solutions can be summarized as reducing the labor costs and retaining as many employees as possible in case of a layoff. In table 3 below, the three end-state goals, reducing the per-unit costs by 40%, retaining at least 90% of the workforce in case of a layoff, and increasing the customer base by 50%, is listed on top of the table. Reducing the per-unit costs by 40% is assigned the highest weight of 5, because without such reduction the company can not compete in either domestic or international market and will face severe financial consequences. Increasing the customer base by 50% is ranked second highest with the weight of 4 because without increasing the customer base, Global Communication will not realize the financial results that it needs. Since the scenario does not give the current number of customers versus the potential market available, the analysis can not tie a specific number to the number of desired customers. The increase in customer base by 50% is assumed to be possible, as well as probable. Therefore, this goal is not rated as high as reduction in costs, because it is assumed that if call costs are reduced, customers will follow. Lastly, the goal of retaining 90% of workforce is ranked 3, or moderate (middle). Again, current scenario does not give current number of workforce, technical, or skilled workers. The assumption is made that 100 of the workforce is always expendable, and therefore, the goals of 90% is listed. There are only three primary alternative solutions are listed, and then scored according to possible impact in achieving each of the desired end-state goals. No secondary alternative solution is listed because any alternative solution can be looked at as a component of the primary alternatives already listed. Alternative A or outsourcing the call centers to Ireland and India is ranked 4 relative to the goal of reduction in per-unit cost. Again, an assumption is made that outsourcing to Ireland and India will result in lower-per unit cost. However, outsourcing itself can be a costly and risky project. Therefore, ranking of 4 is assigned to account for possible shortfall in achieving the desired 40% reduction in costs. Outsourcing is ranked 2 (low to middle) against the goal of retaining 90% of workforce because by itself, outsourcing play a role in the employee’s decision to remain with Global Communication. However, if the company can successfully persuade the workers to remain with the company, then outsourcing will be a beneficial strategy. Lastly, outsourcing was given a score of 2 against increasing the customer base by 50% because outsourcing of a call center plays a small role in persuading the customer, however, it will play a bigger role in retaining existing customers by providing efficient, friendly service and support. Alternative B, increase employee’s commitment, is listed as a solution to the issue of possible loss of employees due to the looming layoff. More than a solution, this alternative should really be a component of a strategy to retain employees. However, it is listed here because one of the requirements for successful implementation of outsourcing is to retain as much of the skilled workforce as possible. Increasing employee’s commitment to the organization by itself involves multiple solutions and alternatives, the numbers of which is too great to be discussed here. In the context of this scenario, increasing employee’s commitment means steps to persuade the remaining employees to remain with the company despite of possible layoff threats. This solution by itself is ranked low (1) against the cost reduction goal because it will do very little to reduce per-call costs. However, it is ranked higher (4) against the goal of retaining 90% of workforce because employee’s commitment will probably result in most workers to remain with the company unless they have no other choice. This solution is ranked moderate or middle (3) because existing employees, knowledgeable in products and services will have a better chance of attracting new customers than new employees, who do not know the company’s service profile and may even lose customers until they are fully trained. Negotiation with the union with the objective of reducing the costs of per-unit call is ranked 2 against the goal of cost reduction because an assumption is made that Global Communication has already attempted and failed in doing so. In fact, according to the scenario, union workers recently had given up 20% of their benefits without achieving the desired profitability. However, there is a chance that the union agrees with the outsourcing and the layoff, if they are involved in the decision making process. Negotiation with the union will certainly help in retaining knowledgeable workers, thus, it is ranked 4 against the goal of retaining 90% of the employees. This solution is ranked 3 against increasing the customer base because although the union workers probably do not play a role in attracting new customers, absent of skilled union workers or a strike by the union may cause existing customers to leave Global Communication. Risk Assessment and Mitigation Techniques Implementation of any project or change comes with a risk. In selecting a suitable plan, managers must assess the risks associated and device a reasonable strategy in case the risk is materialized. Risk is defined as, “An uncertain event or condition that, if occurs, has a positive or negative effect on project’s objectives” (PMBOK, 2007, p. 373). In implementation of outsourcing strategy, Global communication is facing the risk that its projected 40% reduction in costs may not materialize, even under the best of circumstances. For example, to launch the operation in Ireland and India, GC may have to invest more than projected capital. Additionally, there may be government regulations, taxes, or tariffs that will reduce the projected cost reduction. Since the operating in a foreign market is unfamiliar to Global Communication, this risk is probable. However, should the risk materialize, the impact to GC’s profit margin will not be so great that it would cause financial hardship to the company. This is assuming that GC’s management have done a good job in researching the strategy and possible cost reduction benefits. To mitigate this risk, which means to react after the risk is realized, Global Communication can lower its profit projections, despite of disappointing the shareholders and Wall Street. Outsourcing also carries the high probability of union worker’s discontent with the company. In that case, the union may call for a general strike, as they have already hinted to. A general strike by the union workers may be crippling to Global Communication, as the company will not be able to service its current customers or implement its plans for globalization. The only mitigation available to Global Communication, should union strike, is to open negotiations and offer incentives to the union to resume work; a costly alternative. Global Communication should seriously consider this risk. In 1997, UPS management underestimated the will of the Teamster’s union to go on strike, only to realize that they had made a costly mistake. By the time the UPS conceded, it had lost over $650 Million dollars in revenue. At the end, UPS agreed to keep the pension plan intact and further agreed to move over 10,000 part-time workers to full-time status (Tentative, 2007) In increasing employee’s commitment, the risk is that some employees may still decide to leave the company despite of GC’s offering. However, at least some of the employees will decide to remain on their job, especially if GC is able to offer bonuses. Therefore, this risk is assessed as Medium probability. The consequence of skilled labor force leaving the company is great, however, with incentives, it is reasonable to assume that most of the workers will remain on the job. To mitigate this issue, Global Communication can hire individuals with the same skill sets from outside of the company even as temporary contractors. Additionally, it is important for the management to start a training and knowledge transfer program so that there are always more than one person with a skill set to perform a given job. Negotiations with the union bring with it the risk that the union may refuse to cooperate. This is the same risk identified in the outsourcing strategy, listed above. Since the union is already at odds with the company, this risk is ranked high in probability. As stated before, a general strike will cripple Global Communications operations and its implementation of measures to reduce costs. The only avenue available to Global Communication in that case is to negotiate with the union, offer incentives, and thereby incur additional costs. One additional low risk identified with the plan to negotiate with the union is that negotiations may result in making the union even more confident, and thus more at odds with the company. This will cause GC to lose its leverage and bargaining position with the union. If this risk is realized, there are no alternatives available to the company. Optimal Solution Based on the research conducted, and given the issues facing Global Communication, the best solution appears to be a strategy, combining outsourcing of some jobs, while taking solid measures to create a positive and desirable work environment for workers of Global Communication. Other companies have successfully implemented a collaborative environment with organized labor. For example, General Electric Company has gone through many outsourcing and moving jobs to overseas operations without encountering stiff resistance from its unionized workforce (Singer, 2007) It is important for Global Communication management to engage representatives from the union, as well as other workers within the company, describe the situation and the desired end-state goals, and then let the committee work together to plan a strategy for bringing the company back on profitability track. It is well understood that outsourcing the call centers may result in achieving 40% cost reduction in per-unit calls. However, this benefit may come at a greater cost of a general strike by the union and therefore, loss of all profits. The decision by the representatives of workers may or may not be the outsourcing. If the workers agree that outsourcing is the best solution for Global Communication, then the union, being represented and have worked toward the same goal, will buy-in to the strategy and Global Communication will avoid a general strike by the union. Additionally, by engaging the union and other employees, the atmosphere of in-group thinking will be reduced. As Bateman and Snell (2003) point out, “One of the best ways to reduce such politics, and to make sure that constructive cognitive conflict does not degenerate into affective conflict, is to create common goals for members of the team—that is, make the decision-making process a collaborative, rather than a competitive, exercise by establishing a goal around which the group can rally” (p.84). Additionally, Global Communication should increase its employee’s commitment to the company. According to Mcshane and Von Glinow (2004), “Organizational commitment also improves customer satisfaction because long-tenure employees have better knowledge of work practices, and clients like to do business with the same employees. Employees with high affective commitment also have higher work motivation and organizational citizenship, as well as somewhat higher job performance” (p.127). Global Communication should reassure its employees, especially the union workers, about their job security, and fair treatment. This can be achieved through careful monitoring of the grapevine and releasing information. Additionally, the company can hold regular town-hall meetings, where senior managers can speak about the plans and receive feedback from employees. By involving the employees in the decision making process, workers feel trusted and involved in the fate of the company. Implementation Plan Implementation of recommended solution requires significant time and commitment form various resources within the company, including appropriate representatives the union workers and management, non-union workers, and middle and senior level management. The company should start the strategy meetings with the representatives of workers and management immediately. In these weekly sessions, senior management should first present the issue facing Global Communication, and then briefly outline the alternative solutions that have been considered, beginning with the outsourcing option. The committee is then charged to find an acceptable solution to all levels of participants with the support of their respective management. The final solution and perhaps an alternative can then be presented to the board of directors for approval. Because of the weekly schedule, eight meetings should be enough to establish a recommended solution. Sy Rodriguez, the EVP-Consumer Marketing and Sales, will be charged with the responsibility of identifying the participants and conducting the meetings. The town-hall meetings are an important component in regaining the employee’s trust and thus averting mass exodus of skillful individuals. Therefore, Katrina Heinz, the CEO will be charged with scheduling and conducting these meetings. Katrina will need help in setting an agenda, gathering data for presentation, and collection and analysis of input from workers. Therefore, resources from IT, accounting, Finance, and Strategic Planning will be required. Frequency of the town-hall meetings at least in the beginning should be once per month. Joel Thompson, the Executive Vice President of Human Resources and Public Relations, will be in charge of negotiating with the union. From the scenario, it appears that Joel historically has carried these negotiations and is familiar with the politics involved. Additionally, Joel has access to various information and laws pertaining to labor negotiation. The negotiation should be conducted daily, with representatives from the highest ranks of the union management. Because of its daily schedule, only 30 days are needed to complete the negotiations. Finally, the CEO is also charged with identifying a suitable International Management Consulting firm or an individual. The time frame for this task is set to 60 days because a decision by the strategy committee against outsourcing may render this effort useless. Evaluation of Results There are different evaluation results for different tasks. This paper’s recommended solution is to engage the union and the workers to craft a best solution. To that end, a set of deliverables were identified, with appropriate time lines. The measurement of how effective the recommended solution is will depend entirely on different sets of criteria. For example, the recommended solution specifies town-hall meetings with the workers in order to regain worker’s trust and commitment to the company. However, this commitment can only be tested and measured after a layoff is announced, to see how many workers leave the company. Additionally, town-hall meetings will not directly affect the end-state goals, such as reduction in cost per unit by 40%. It will, however, help to avoid loss of skilled labor force, which may be detrimental to Global Communication’s survival. The write believes that the only measurement applicable is creation of a recommended plan by the strategic committee and identification of a desirable International Consulting firm in 60 days. Conclusion As Kreitner & Kinicki pointed out, “effective communication is critical for both managerial and organizational success”, (Kreitner & Kinicki, 2003, p.520). Without clear and effective communication even the best thought-out plans are doomed to fail. As the case story of GE demonstrated, one way to plan effective communication is for the management to consider all of its stakeholders in their strategic decision making process and solicit their support, especially in difficult times such as when the company is about to outsource and layoff a large number of workers. In contrast, as the case of UPS shows, wrong assumptions about the stakeholder needs and failing to involve the workers in strategic planning can lead to disastrous results. Global Communication, in its quest for more profit, is wise to learn from successful companies such as GE, and at the same time avoiding mistakes made by organizations such as UPS. References Scenario: Global Communications (2008). University of Phoenix, Retrieved March 17, 2008, Bateman, S. & Snell, S. (2004). Management: The new competitive landscape. (6th edition) New York: McGraw-Hill. Big Brown grounded as Teamsters strike UPS (1997, August 4). Retrieved March 19, 2008 from http://www.cnn.com/US/9708/03/ups.strike/index.html Fuhrman, Frank L. (1999, June). Co-sourcing: A winning alternative to outsourcing call center Operations, Retrieved April 7, 2008, from http://findarticles.com/p/articles/mi_qa3877/is_199906/ai_n8830172/pg_3 Kreitner, R., Kinicki, A. (2003). Organizational Behavior (6th edition). New York: McGraw-Hill. McShane, S. L., & Von Glinow, M. (2004). Organizational behavior: Emerging realities for the workplace. New York: The McGraw-Hill Companies. PMBOK (2007). A guide to the Project Management body of knowledge, 3rd edition. Newtown Square, PA Sebenius, J. (2002, March). The Hidden Challenge of CROSS-BORDER NEGOTIATIONS. Harvard Business Review, 80(3), 76-85. Retrieved April 7, 2008, from Business Source Complete database. Singer, S (2007, May 13). Big Job Security, Pensions Top GE Union Meet. Retrieved March 19, 2008 from http://www.ibtimes.com/articles/20070513/ge-union-negotiations.htm Tentative agreement reached to end UPS strike (1997, Aug 19). Retrieved March 19 2008 from http://www.cnn.com/US/9708/19/ups.settlement/index.html Table 1 Issue and Opportunity Identification |Issue |Opportunity |Reference to Specific |Concept | | | |Course Concept | | | | |(Include citation) | | |Global communication’s strategy is to |Global Communication can |Analyze techniques of cross-border negotiations. |Cross-cultural | |launch operations in Ireland and India.|hire an International | |conflicts | |Being unfamiliar with business rules |Consultant to guide the |“Consultants also can help untangle possible | | |and cultures in Ireland and India, the |management in |personality, and inter group conflicts from | | |company is certain to encounter |understanding different |conflicts rooted in differing national cultures.” | | |conflicts, which it must avoid or deal |cultures and building |(Kreitner & Kinicki, 2003, p. 494) | | |with effectively. |cross-cultural | | | | |relationships to avoid | | | |“Success or failure, when conducting |conflicts. | | | |business across cultures, often hinges | | | | |on avoiding and minimizing actual or | | | | |perceived conflict.” (Kreitner & | | | | |Kinicki, 2003, p.493) | | | | |The union workers believe that Global |Global Communication has |In-group thinking and Inter group Conflict |Identify the basic | |Communication management does not take |the opportunity to reduce| |concepts of conflicts | |the union workers rights and interests |in-group thinking and |“Priority number one for managers faced with inter |and conflict resolution| |into considerations when making |inter group conflicts by |group conflict is to identify and root out specific | | |strategic decisions. The underlying |discovering and |negative linkages among groups.” (Kreitner & | | |cause of this belief is in-group |eliminating the negative |Kinicki, 2003, p. 493 | | |thinking, which creates an inter group |linkages between the | | | |conflict |union and non-union | | | | |members as well as mixing| | | |“Conflict is a process in which one |various groups of | | | |party perceives that its interests are |workers. | | | |being opposed or negatively affected by| | | | |another party.” (Kreitner & Kinicki, | | | | |2003, p.486) | | | | |Global Communication executives |Global Communication |Organizational Communication |Communication channels | |bypassed the established organizational|management should monitor| | | |communication channels by not including|the grapevine and use it |“The key managerial recommendation is to monitor and| | |the union Representative, Maria Antez, |to distribute accurate |influence the grapevine rather than attempt to | | |during the strategy discussions. |information, counter |control it. Effective managers accomplish this by | | |Instead of receiving clear and complete|rumors and inaccurate |openly sharing relevant information with employees.”| | |information, the union workers learned |gossips, and reduce |(Kreitner & Kinicki, 2003, p. 542). | | |about the outsourcing through the |anxiety among workers by | | | |grapevine. Information received |affirming management’s | | | |through grapevine may be distorted, |commitment to build a | | | |inaccurate, or incomplete, causing |better company. | | | |employee discontent, confusion, or | | | | |negative attitude. | | | | | | | | | |“Employees develop more negative | | | | |attitudes toward the organization when | | | | |management is slower than the grapevine| | | | |in communicating | | | | |information” (McShane & Von Glinow, | | | | |2004, p. 346 | | | | |Faced with possible layoff due to |Global Communication can |Emotions in the workplace |Apply the concepts of | |outsourcing, Global Communication |increase its employee’s | |emotional intelligence | |workers feel insecure and unsure. |affective commitment by |“Corporate leaders have good reason to pay close | | |Workers may feel that the company is |supporting the employee’s|attention to employee loyalty because it can be a | | |not committed to them and therefore may|well-being, trusting the |significant competitive advantage. Employees with | | |resign from the company. Lack of |employees, providing job |high | | |organizational commitment may also |security, and most |Levels of affective commitment are less likely to | | |cause poor performance, which will |importantly, involving |quit their jobs and be absent from work. | | |impact Global Communication’s |the employees in the |Organizational commitment also improves customer | | |competitive advantage in the market. |decision making |satisfaction because long-tenure employees have | | | |processes. |better knowledge of work practices, and clients like| | |“Organizational commitment refers to | |to do business with the same employees. Employees | | |the employee’s emotional attachment to,| |with high affective commitment also have higher work| | |identification with, and involvement in| |motivation and organizational citizenship, as well | | |a particular organization.” (McShane & | |as somewhat higher job performance.” (McShane & Von | | |Von Glinow, 2004, p. 126) | |Glinow, 2004, p. 127) | | | | | | | |Global Communication’s management did |Global Communication |Elements of decision making model |Apply critical thinking| |not involve representatives from the |should include | |to a decision process | |union or non-union workers in their |representatives from the |“One of the best ways to reduce such politics, and | | |decision making process. This created a|union, and then give them|to make sure that constructive cognitive conflict | | |coalitional decision making process, |a common goal to achieve.|does not degenerate into affective conflict, is to | | |which the union is trying to change the|Doing so, Global |create common goals for members of the team—that is,| | |strategic decision of outsourcing by |Communication will |make the decision-making process a collaborative, | | |using tactics such as negative |realize better decisions,|rather than a competitive, exercise by establishing | | |publicity or work stoppage. |as well as buy-in from |a goal around which the group can rally.” | | | |all workers. | | | |“The coalitional model of decision | |(Bateman & Snell, 2003, p.84) | | |making arises when people disagree on | | | | |goals or compete with one another for | | | | |resources. The decision process becomes| | | | |political, as groups of individuals | | | | |band together and try collectively to | | | | |influence the decision.” (Bateman & | | | | |Snell, 2003, p.84) | | | | Table 2 Stakeholder Perspectives |Stakeholder Perspectives | | | | |Stakeholder Groups |The Interests, Rights, and | | |Values of Each Group | |Shareholders |Interest = Stocks value | | |Rights = Return on investment | | |Values= Profitability | |Board of Directors |Interest = accountability | | |Rights = Profitable decisions by management | | |Values=profitability | |Management |Interest = Increase profit | | |Rights = Employee commitment | | |Values= Profitability | |Union workers (and managers) |Interest = Jobs, Pay | | |Rights = Fair treatment | | |Values= Fairness | |Workers (non-union) |Interest = Jobs, Pay | | |Rights = Fair treatment | | |Values= Fairness | |Customers |Interest = Good service | | |Rights = reasonable cost | | |Values= technology | Table 3 Analysis of Alternative Solutions [Click twice on table to change, see instructions on next page. The alternatives and their ratings as well as the goals and their weightings shown below are for illustrative purposes, you should enter your own. Delete this paragraph when done.] [pic] Note: The table format varies from APA standards in conformity with guidance contained in the preface to the APA Publication Manual, 5th edition. Table 4 Risk Assessment and Mitigation Techniques |Risk Assessment and Mitigation Techniques | |Alternative Solution |Risks and Probability |Consequence and Severity |Mitigation Techniques | |Outsource call center to |Medium - May not result in targeted|Medium-GC will not achieve its |Lower profit projections | |Ireland and India |cost reduction |desired profit margin | | | | |High-General strike will impact | | | |High-Discontent among union workers|strategic plan implementation |Offer incentives to the union workers| |Increase employee commitment |Medium – Employees may still leave |Medium – Loss of skilled labor |Hire from outside | | |the company | |Implement training to have back-up | | | | |personnel | |Negotiate with the union to |High-negotiations will fail to |High-General strike will impact |Offer incentives to the union workers| |achieve cost reduction |produce desired reduction in costs |strategic plan implementation | | | |Low-places the union at a better |Low-GC will have less leverage to| | | |position to bargain |gain union’s cooperation |None | Table 5 Optimal Solution Implementation Plan |Deliverable |Timeline |Who is Responsible | |Conduct weekly strategy meetings with |2 months |EVP-Consumer Marketing and Sales | |representatives from all workers and management | | | |Implement once per month town-hall meetings |30 days |CEO | |Conduct negotiations with the Union for cost |30 days |EVP-Human Resources and Public | |reduction | |Relations | |Research and recommend an International Management |2 months |CEO | |Consultant | | | | | | | | | | | | | | | Table 6 Evaluation of Results |End-State Goals |Metrics |Target | |Reduce unit costs for call handling 40% by |Profit report generated monthly will show |Monthly review of profit report, beginning six| |outsourcing technical call centers to India |per-unit cost, as well as projected cost for |months from implementation day. | |and Ireland within six month. |the remaining months in fiscal year. | | |Minimize the impact of layoff by retaining |Review and comparison of labor force and |Monthly report by HR, showing number of open | |90% of remaining workforce after the layoff. |skill sets against requirements |positions | |Increase customer base 50% by hiring 1000 |Sales report or customer report with actual |Monthly, beginning six months after the | |qualified sales in 12 months |and projected income from each customer. |implementation day. | | | | | | | | |