Question:
- What is/are the consideration/s of MCI Communications Corp. in choosing a business location, based on the general procedure for making location decisions.
- Management Lesson Learned (Personal learnings or takeaways from the case study)
Modules are given below
'3 84% guys had selected Colorado Springs," Mr. Liebhaber says. He was mistaken. While many rankand files MCI employees were retained by generous relocation packages, after making the move, numerous key executives and engineers, and hundreds of the divisions 51% minority population, said no, or fled Colorado Springs soon after relocating. \"It was like living in a loaf of Wonder Bread,\" says James Finucane MCI's top engineer until he took a job with a competitor back east in 1994. \"There's no culture, no diversity, no research university, no vitality or resiliency to the job market.\" The move isolated MCI's engineers from top management and marketing colleagues at headquarters, undermining the spontaneous collaborations that had generated some ofthe company's most innovative products. Meanwhile, the professionals Mr. Liebhaber hoped to recruit more engineers, pushing the move's total cost to about $200 million or 10 billion pesosfar more than MCI officials anticipated. \"Most of the savings we had hoped for never materialized,\" says Leroy Pingho, a senior executive who oversaw the relocation. When the move was announced, many rankandfile workers were enthusiastic. MCI's relocation policy paid for every expense imaginable. Costing an average of $100,000 or five (5) million pesos per employee, it included up to six (6) months of temporary housing and living expenses, privateschool tuition for workers' children and a full month's pay for miscellaneous expenses. And there were exceptional housing bargains. Thousands of workersfar more than Mr. Liebhaber expectedtook advantage of the offer, undercutting his plans to recruit lower cost employees in Colorado. But there was far less enthusiasm amnnn- caninr manannrc Iamnc 7||rrn lUlr nH-rh'FinlrI'c currnccnr and flan hnad n'F Curd-amt Enninnnrinn 1 lI10:36 '3 84% When the move was announced, many rankandfile workers were enthusiastic. MCl's relocation policy paid for every expense imaginable. Costing an average of $100,000 or five (5) million pesos per employee, it included up to six (6) months of temporary housing and living expenses, private-school tuition for workers' children and a full month's pay for miscellaneous expenses. And there were exceptional housing bargains. Thousands of workersfar more than Mr. Liebhaber expectedtook advantage of the offer, undercutting his plans to recruit lower cost employees in Colorado. But there was far less enthusiasm among senior managers. James Zucco, Mr. Ditchfield's successor and the head of Systems Engineering, stayed behind and eventually left to join AT&T Corp. Also staying put was Gary Wiesenborn, the division's No. 2 executive, who later moved to Bell Atlantic Corp. Mr. Pingho, who oversaw the division's financial planning and budgeting, declined to move and quit in 1993. There was also significant fallout among the division's minority population. Although MCI declines to provide specific numbers, it confirms there was a reduction. According to former employees who had access to Equal Employment Opportunity Commission data, there were roughly 1,300 African-Americans on Systems Engineering's staff and a combined 700 Asians and Hispanics before the relocation. Since the relocation, minority representation has been cut almost in half, to about 600 African-Americans and a combined 500 Asians and Hispanics. \"It was a disaster for diversity,\" Mr. Ditchfield says. But MCI officials say that despite the reduction, its Colorado division is still more ethnically diverse than other local companies. 03 Activity 3 *Property of STI Pace 1 of 2 1 lI10:36
