Strategic Management: Information Service Segments Essay

Question:

Describe about the Strategic Management for Information Service Segments.

Answer:

Introduction

The report reflects the case of an Australian company, Telstra where it potentially focuses on outsourcing potential job roles associated with the contact centre activities to different emerging and developed economies around the globe. The report would significantly aim at understanding the internal and external factors that has prompted the company for outsourcing the jobs to offshore regions while also aiming to understand the impact of such activities on the different stakeholder groups of the company. Finally, the report would also evaluate the implications of the company’s continuing job roles in the Australian region on the customers and employees.

About Telstra

Telstra operates as an effective institution operating in the telecommunication and information services segment in the Australian market. The company contributes in the generation of different types of communication services across varied telecommunication markets across the globe. Estimates reflect that Telstra reflects a generation of 17.2 million mobile telecommunication services, fixed voice services of around 7.0 million and also around 3.4 million broadband services for the retail market. The telecommunication organisation focuses on creating an interconnected community in the future period. The company focuses on the development of technology and potential content solutions that are both simple and accessible for use for the general masses (BUCHANAN et al., 2014). Telstra actively works in meeting the digital communication needs of its customers relating to the Australian markets. The communication company spans its operation based along 22 international regions. Telstra in terms of generation of effective telecommunication services contributes in networking and connecting different external stakeholders like individual and corporate customers, government bodies and other such social communities. The telecommunication and information services generated by Telstra potentially help in enhancing the quality of life and work for different individuals (Telstra , 2016).

The telecommunications and information technology services organisation focuses on operating through a total of 3000 employees spanning across 22 different international markets. The company has developed communication infrastructures through the development of subsea cable networks along the Asia-Pacific region (Hong & Doz, 2013). Further, Telstra also specialises in the generation of application services and also operates in the development of software, online and electronic sales, e-health campaigns and video delivery related activities (Telstra International , 2016).

Telstra conducts its information technology and telecommunication services based along five core values outlined as follows. The company aims at taking care of its different stakeholders. Telstra also promotes the working in a collective fashion for generation of needed betterment (Hong & Doz, 2013). It also focuses on promoting an environment of mutual trust among its different stakeholder groups (Fournier & Lee, 2009). Telstra aims at simplifying complicated product and technology solutions. Finally, the fifth value reflects on Telstra’s aim to operate in a courageous fashion owing to moving over to challenging markets and territories (Telstra , 2016).

Telstra also operates as an effective value based firm that focuses on taking on potential responsibilities for meeting of information needs of customers and stakeholders based along international markets. Further, Telstra also focuses on operating in a deterministic fashion for creation of diverse options for its customers (Maxwell, 2012). The management of Telstra also does not deter the generation of humility and continually focuses on promoting an environment of learning and growth in the organisation. Finally, Telstra reflects the courage of challenging its functions and operations for the meeting of value sets (Telstra , 2016).

External and Internal Issues

External Issues affecting Telstra

One of the most potential external issues encouraging Telstra to outsource its call centre operations to Philippines is identified to be the cost of running the call centres. It is evaluated that the minimum salary that needs to be generated to a call centre employee in Australia operating for around 38 hours amounts $41,332. On the other hand, call centre employees operating for around 47 hours in the Philippines market is observed to gain average minimum salaries of only $5,751 (Khan & Khalique, 2014). The low cost of operations in terms of salary of call centre employees evaluated by the management of Telstra amounts to be an important aspect that encourages the company to shift its call centre operations to outsourced markets like Philippines (Contact Centre Central , 2016). Moreover, the existence of potential infrastructural and technological potentials in Asian regions like India and Philippines is observed to encourage Telstra in moving its telecommunication operations to such regions (Dowling, 2013). The management of Telstra defends its outsourcing initiatives regarding the off shoring of call centre operations in that the same contributes in the enhancement of greater flexibility for the firm in meeting changes in consumer needs (RASTOGI & TRIVEDI, 2016). A spokesperson of Telstra stated in the above respect that the company focuses on operating through an effective admixture of internal staffs, local agencies and other off shore agencies that in turn help the company in potentially servicing new and changing expectations of the consumers (Ferdman & Sagiv, 2012). Thus, development and creation of outsourcing opportunities for its internal employees in different low cost markets would potentially help Telstra in reducing business and customer servicing costs (Cai, 2013). Telstra focuses on outsourcing large number of customer servicing jobs to the Indian market such that the same contributes in helping the telecommunication company develop an effective presence along the Indian subcontinent (Suhasini & Suganthalakshmi, 2015). The creation of local delivery centres is taken to help Telstra in gaining potential access to local and regional resources and infrastructures and also in enhancing the skill base of the employees employed from the regional market (Podsiadlowski et al., 2013). Along with India and Philippines, Telstra focuses on developing its offshore presence based on the development of an effective skilled workforce that would help in generation of customer services and in meeting of customer delivery needs for different international markets like Hong Kong, Singapore and other developed markets like London and New York (Coyne, 2014).

Internal Issues affecting Telstra

Telstra focuses on outsourcing its call centre operations to international regions like Philippines in that the management expects that the offshore move would contribute in the generation of effective customer services (Dowling, 2013). Along with generation of effective customer servicing, Telstra focuses on sending large number of call centre operations to offshore markets in that the same would contribute in reducing activities related to back-office duplication (Adhikari, 2016). The company management of Telstra continually focuses on slashing and off shoring jobs to foreign markets in that the same would contribute in enhancing the profitability aspect of the company in the long run. The above factor is prompting Telstra to tap emerging and low cost economies for off shoring the call centre operations (Ongori & Nzonzo, 2011). Again, generation of investments by Telstra relating to the sectors of international assets, cloud computing and also for development of 4G mobile services further require the telecommunication company to generate offshore markets for its employees (Tolonen et al., 2014). The generation of business agreements with Indian firms like Tata, Wipro and also with Infotech further encourage Telstra for employing around 2500 people in the offshore locations for rendering of potential customer services (Stevens & Ogunji, 2010). The focus of Telstra’s management in restructuring the firm based on the creation of the customer service delivery wing further trigger the need for its outsourcing endeavours of call centre operations (Cai, 2013). The continual search for cheap labour resources had triggered the intention of Telstra for sourcing jobs in emerging and growing markets like Philippines and India (Coyne, 2014).

Outsourcing Impact on Stakeholders

Impact on Customers

The restructuring and outsourcing efforts of Telstra is observed to have significant impact on its clients. The outsourcing activities of the company is taken to potentially affect the Network Application and Services Unit or NAS that addresses the need of government bodies and other business institutions with different technology products and network services like cloud computing, internet security and also video conferencing (Hutchens, 2013). The company spokesperson of Telstra admits that the removal of experienced staffs from its technology and operational divisions would tend to create problems like network outages. The same is taken to affect the quality of work and services generated by the company to its clients (Olsen & Martins, 2012). The continual removal of skilled Australian workers from Telstra’s workforce has in fact questioned the reliability and effectiveness of the services generated by the technology company to the Australian customers that tend to pay premium prices for gaining the services generated by the company (CPSU, 2016). The outsourcing activities of Telstra potentially affect the quality and reliability of the customer services generated by the telecommunication organisation (Bhatia & Kaur, 2014). Customers complain that Telstra in terms of outsourcing and creating of offshore jobs is on the spree for making large number of job roles redundant in nature (Edewor & Aluko, 2007). Further, Telstra is continually causing job cuts of experienced staffs from its different branches and departments and rather depending on the incorporation of inexperienced contractual staffs from different offshore regions (Sarno & Herdiyanti, 2010). The above activity undertaken by the company to boost its profitability is taken to potentially affect the quality of services generated by the company to customers on a nationwide and global basis (Cai, 2013).

Impact on Employees

The continual outsourcing activities of Telstra based on opening of call centre operations in emerging markets like Philippines is observed to vehemently cause job cuts in the Australian market. Immense job cuts in a continual fashion tend to affect the quality of work life of the employees creating a sense of insecurity (News.com.au, 2016). The company management of Telstra mentioned that the company would take needed care and support the need of its employees that have been shacked and retrenched from the company’s operations (Dartey-Baah, 2013). The growth of job losses is however taken to enhance the level of pressure on the working of existing employees pertaining to the sales, service, operations and also of the office teams (Eszterg?r-Kiss & Csisz?r, 2015). The existing people are thereby required to work in a relentless fashion for sustaining the quality, reliability and standard of services generated by Telstra (Ong, 2016). Telstra is accused for generating unfair treatment to the Australian employees in search for growth and profitability in terms of expanding across the global market. The increased job cuts rendered by Telstra in the Australian market are observed to significantly affect the quality of work life for the different employees and also affecting the families of its workforce (Aspara et al., 2011). The employee union in Telstra continually raises its voice for the ruthless shacking activity of Telstra that causes the sudden reduction in the employment position in Australia (Shi & Wang, 2011). The company management of Telstra further mentions that it is the duty of the subordinate members in the company for potentially convincing the company for retaining their jobs whereas it the prerogative of the company to decide that whether it would continue buying services from the employee or ousting the person from the company’s operation (Abdullah & Shamsher, 2011). The job cuts conducted by Telstra thus makes the employees require them to be cared by the social welfare system regarding their food, clothing and shelter needs until they gain an effective employment opportunity (LeMay, 2014).

Impact on Shareholders

The outsourcing operation of Telstra though is taken to help the company incur increased profitability and thereby gain the ability to generate potential dividend to its shareholders. Further, the outsourcing activities of Telstra coupled with continual job cuts have made the company management able to make plans for returning $1.5 billion to the potential investors (Roos-Frantz et al., 2012). The outsourcing activities conducted by Telstra are also observed to generate positive impacts on shareholders in terms of creating an increase in the share price by around 1.2 percent. The new share price for Telstra shares after the price rise during 2013 amounted to $4.98 (McGrath, 2013). Telstra’s endeavours for continually downsizing its staff strength across its different contact centres without the generation of prior information to ASEX or the Australian Securities Exchange generated a negative impact on the share prices of the company. The prices of Telstra’s shares countered a slip by around 7 cents thereby gaining a new price of $4.76 during July 2013 (Hutchens & Lucas, 2013).

Implications of the Jobs continuing in Australia

Telstra is planning to enter into an agreement with New Zealand based telecommunication company Gen-I such that the same would help the company in generating effective services to both the Australian and New Zealand based customers. The agreement focused on being entered into by Gen-I and Telstra is taken to make the telecommunication services agile, flexible and speedy in nature. The tie-up of Telstra and Gen-I is also evaluated to enhance the quality of services offered in by the telecommunication company to the customers (Rozkwitalska, 2012). This would contribute in reducing the level of customer dissatisfaction that had been accruing on account of Telstra’s policy of continued job cuts (gen-i, 2016). The continuation of telecommunication business by Telstra in the Australian region has encouraged and attracted a further lease for 11 years and 5 months from the property investment company, Investa (Olsen & Martins, 2012). The gaining of the lease from Investa is taken to help Telstra in effectively transforming its workplace and also in developing an effective collaborative hub in the Melbourne region. Telstra being a potential tenant of Investa, the latter company is ready to generate needed investments for meeting the emergent needs of Telstra in providing quality telecommunication services to the Australian consumers (Rozkwitalska, 2012). Telstra is evaluated by Investa as a potential destination that focuses on generating innovative services for its customers and also in creating a thriving and attractive workplace for its employees (Investa , 2016). The Global Operations Centre (GOC) of Telstra currently manages the large scale telecommunication services, high speed internet services and other broadcasting services to cater to the needs of its diverse customer force located along various Australian regions (Slavi?‡ et al., 2014). Further, the GOC also contributes in servicing the digitalisation needs of its customers located both along the regional and international regions. The new setup of GOC of Telstra is also observed to contribute in the generation of quality customer services and also enhance the level of customer experience along the regional and international level (Melbourne Australia , 2016).

Conclusions

The report reflects the impact of the outsourcing activities of Telstra where the organisation focuses on creating contact centre jobs in the offshore markets, on the different stakeholders of the telecommunication company like employees, customers and shareholders. The report also effectively analyses the external and internal issues that contribute and motivate Telstra for outsourcing the contact centre jobs in offshore regions like Philippines and India. The main reason inferred for such large scale outsourcing of contact centre jobs to emerging countries is the reduction of business and manpower cost for Telstra (Fournier & Lee, 2009). The large scale outsourcing and job cuts rendered by Telstra is also analysed to significantly impact the position of the stakeholders of the company thereby leading to a reduction in the stock prices in ASEX. The report also reflects on the implications of the continuing job roles of Telstra in the Australian region both from the point of view of the company and the customers.

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