Management Plannin in Global Crossing - Essay Example

Planning for Success Global Crossing, a world wide communications provider, serves a large segment of of fortune 500 companies, hundreds ofphone and communications carriers, as well as internet service providers. The organization provides broadband service, internet service VOIP, video, audio and meeting solutions that are so frequently used by today’s businesses. As a communications provider, Global Crossing has developed intricate global communications networks that it claims are secure and reliable. Among the various services offered are those in its ‘Fast Track’ program, such as dedicated internet, on-demand video and audio conferencing, long distance services and VOIP. Two programs offer customers the ability to market the services under their own name brand or through co-branding. Physical locations include Pennsylvania, Indiana, California, Florida, and New York in the US. Overseas locations include Argentina, Great Britain, Ireland and Hong Kong. Extensive cable networks, phone lines, routers, servers and technical equipment must be maintained at an optimum level to provide the extensive services that the organization offers. There are communications experts, IT professionals, financial managers and customer service representatives that must work efficiently to maintain all the accounts that are served. Executives and top decision makers must determine current market demand based on information provided by managers of marketing and sales. They must then make decisions about infrastructure such as whether certain networks in specific locations should be upgraded. They rely heavily on the technical managers to assist with tasks in this area. Decision makers must also determine future needs of current customers, based on technology trends and usage. Decisions on what types of services and how they will be delivered are critical. Planning for Success 2 Planning for one type of service when customers tend to use other types of services can be costly in terms of equipment enhancement and purchase, as well as in hiring and retaining the talent to operate the equipment. “Upstarts tried to build, buy or borrow network capacity in anticipation of demand for data traffic – demand that seldom materialized to the extent forecast. A glut of unused network capacity was behind the bankruptcy filings of Global Crossing and several other communications companies” (Romero, 2002). Using better forecasting methods may have prevented decision makers from attempting to expand networks so aggressively. Overseas locations appear to be those that have at least adequate infrastructure to support the services that Global Crossings offers. Britain and Ireland are cultures that strongly encourage education and any technology that enhances or promotes learning. In Britain many high school and college level exams can currently be taken online. Hong Kong has developed extensive infrastructure in the expectation that as manufacturing increases, communications between business partners and global customers will increase. Argentina is also strategic in providing network infrastructure for Latin America. “A survey conducted by Microsoft found that almost eight million people in Argentina, a country of 37 million, regularly surf the Internet and use e-mail, a higher proportion than most Latin American countries” (Valente). In development of its networks, Global Crossing must take into account the legal aspects involved in overseas networks. Some countries impose heavy tariffs to those who use existing infrastructure. Others see the development of expansive networks as as a way to reach global business partners, as in the case of Hong Kong. Impose heavy tariffs would not be advantageous in this instance. There are also issues of accessibility and security for customers who use the organizations services. Planning for Success 3 Often sensitive financial and personal information is exchanged via internet, fax or phone. Financial transactions such as account transfers must be secure. Global Crossing must plan on how security will be handled for its customers and what it will do in the event security is breeched. It must also take into account the legal liability it may incur as a result of losses to customers, when fraud or theft is committed in cyberspace or across communications networks. Global Crossing must also take into account the legal responsibilities that come with sharing its network or buying network cable from other organizations. In 2002 the organization came under scrutiny by the SEC for allegedly reporting deals with Quest Communications as revenue on their books. Not only doe such actions create legal issues for Global Crossing, they devalue stock when their actions are made public. This can greatly affect the financial health of investors and shareholders. Creating more revenue on the books when it does not exist has the potential to hurt not only shareholders, but employees who may own company shares and have invested time and money into pension plans. With bankruptcy employees financial futures can be hurt severely. Other ethical issues include hiring practices for employees in the overseas locations. In Hong Kong wages are much lower comparable to the US. If the company fails to pay into the pension programs of the countries in which its operations are located, employees may fail to receive benefits upon retirement, leaving them financially destitute. If Global Crossing benefits from the efforts of overseas employees, it has an obligation to contribute to their well being and that of their communities in general. Ireland is known for its incentives for global businesses. Its 12.5 percent business tax is the lowest of all western nations. Ireland also offers a tax credit for Research and Development. The credit also makes special allowances for IP(intellectual property). Planning for Success 4 Irish tax treatment of intellectual property (I.P.) is dependant on the nature of the IP rights and can be summarized as follows: Scientific Research: revenue and capital expenditure on activities in the field of natural or applied science for the extension of knowledge is allowable as a trading expense in the year in which the expenditure is incurred” ( Deloitte & Touche, 2007). Communications networks can be considered intellectual property. Research can include feasibility studies and testing or production of networks to ensure usability and reliability. Under the guise of research, Global Crossing can still earn revenue from those customers in Ireland and Britain who use their services. This is great for the organization, but of little benefit to the UK nations. Ireland’s tax laws and credits are meant to attract local business and boost the economy. Global Crossing has an obligation to contribute to the welfare of the nations in which it conducts it business and where it makes use of existing infrastructure for profit. Existing infrastructure enables Global Crossing to more easily develop and expand communications networks. The organization has carefully chosen nations that have already built extensive networks. It has also chosen nations where business tax and tax incentives are most advantageous. Hong Kong has IT expertise for Global Crossing to hire for technical operations of its networks. Aside from the tax incentives, Ireland has numerous call centers with well trained customer service or call center agents. It can contract with such centers for its customer service activities, reducing the hassles of hiring and training such employees. The IT expertise is beneficial to Global Crossing not only in daily operations of networks, but also in development of alternatives in routing, should parts of existing networks fail or malfunction. The ability to contract with call centers allows the organization to move communications from one location to Planning for Success 5 another reliable center, in the event of a natural disaster. Strategically located networks already in place allow Global Crossing to provide services more quickly and less costly. Location of existing networks, financial incentives and available talent are three main factors that influence planning and decision making by management of Global Crossing. Planning for Success 6 References Deloitte & Touche. (2007). Retrieved August 1, 2007 from http://www.idaireland.com/ home/index.aspx. Global Crossing. Home page. Retrieved August 1, 2007 from http://www.globalcrossing.com/customer/collaboration/cust_collaboration.asp Romero, S. (2002). Global Crossing Under Scrutiny for its Trading. New York Times. Retrieved July 1, 2007 from http://query.nytimes.com/gst/fullpage.html. Valente, M. (2007). Computers Alone Can’t Bridge Digital Gap. Retrived August 1, 2007 from http://ipsnews.net/news.asp. Read More