Strategic Changes at Western Union

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change at Western Union

Case summary

Christian Gold faces opposition in her attempt to define Western Union's global placement. The single entity that was responsible for Western Union's international operations was deemed insufficient to meet and satisfy their global clientele. Having a background in different cultures and geography, Gold understood that each region should be treated uniquely. She noted that each region had its own culture and needs. Therefore, treating all the regions in the same manner would spell doom for the company. Gold proposes that Western Union be divided into three divisions in order for each region to have a separate division head (Konrad & Mitchell, 2009). Having individual division heads would ensure that a person who understands the individual and cultural needs of the region manages each region. This would allow Western Union to target its products and services better to the consumers. There is a fear of losing revenue within the company. There is opposition from Gold's peers who do agree with her in regards to strategic international plan, but are in disagreement in regards to the decentralization and responsibility for profit and loss.

Major issues

Global expansion requires that responsibility be handed to people who might not understand the operating standards of the company. The senior vice presidents were U.S.-centric, which made it hard for them to handle and promote the products internationally. Western Union might have a presence in 195 countries, but all marketing and product development was done in the United States (Konrad & Mitchell, 2009). Gold had proposed that the company should relinquish control over some of the projects, which was not well received by the senior vice presidents.

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The international division only had one product line, while in the U.S. The company had multiple product lines. There was need to introduce other products in the international market to increase the company's revenues. Concentrating on consumer-to-consumer business internationally makes the business vulnerable to competition.

Reorganization was not easy because the First Data management team did not see the need to spend the estimated U.S.$4 million and yet the company had been steadily growing (Konrad & Mitchell, 2009). Western Union had managed to increase its revenues by eighteen percent in 2002. The growth occurred in the current model. The parent company was satisfied with the current model and convincing them to accept a reorganization for Western Union was not easy. Inactive management would only respond when there is a need to act in order to avoid a crisis. This makes the First Data management team inactive managers and Gold an interactive manager.

Alternate courses of action

There is a need for compromises if the company is to achieve its strategic goals. Compromises do not mean that issues should be shoved away, but rather that all stakeholders agree to try out something before deciding it does not work. Introducing new products in the international market will not be easy, and the best strategy would be to start small. Choosing one region and implementing the strategy there fully would allow the company to….....

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