SYSTEMS TECHNOLOGY INSTITUTE

CASE STUDY

A Case Study Related to Facilities Management

Presented to the Faculty of the Tertiary College
STI College Global City
Taguig City

In Partial Fulfillment
Of the Requirements for the Program
BS in Business Administration

By
GONZALES, MARIEL V.
 ACTIVITY

“Innovative MCI Unit Finds Culture Shock in Colorado Springs”

I. Background

In 1991, the chief technology officer of MCI Communications Corp. decided to relocate

MCI’s brain trust—the 4,000-employee Systems Engineering division that created numerous

breakthrough products—from MCI’s Washington, D.C., headquarters to Colorado Springs.

Avid skier said that “ a magnet for the best and brightest “ would be computer software

engineers, like mountains , low crime rate, healthy climate, and rock bottom real-estate

prices. Mr. Liebhaber argued that new hires would jump at the chance to live in ski country,

while veterans would stay longer, reducing MCI’s more than 15% annual turnover rate in

Washington. The move, he contended, would also save money by cutting MCI’s facilities,

labor, and recruiting costs. Besides, four other high-tech companies—including Digital

Equipment Corp. and Apple Computer Inc.— had recently moved there and 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.” professionals Mr. Liebhaber

hoped to recruit moreengineers, pushing the move’s total cost to about $200 million or 10

billion pesos—far 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.

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, private-school tuition for workers’ children and a

full month’s pay for miscellaneous expenses. When Mr. Liehabler took advantage of the

offer his plans to recruit lower-cost employees in Colorado, had 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. 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.
II. Statement of the Problem

a. What is/are the available location planning option/s for MCI Communications

Corp.?

 Collaboration to create the most innovative products for the company.

 Recruit more engineer.

 Recruit more engineers at low cost in Colorado, but senior management

is less enthusiastic.

 System Engineer division with 4,000 employees that has created many

successful products.

b. What is/are the risk/s associated in the location decision of MCI

Communications Corp.?

 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, private-school tuition for workers' children, and

a full month's pay for miscellaneous expenses.

 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.

 c. What is/are the consideration/s of MCI Communications Corp. in choosing a

business location, based on the general procedure for making location

decisions?

MCI Communication Corp.'s CEO believes that by relocating the

business, they will be able to produce more innovative and successful

products in with the engineering divisions.

d. How will MCI Communications Corp. avoid its organizational problem by

choosing a different option for location planning?

Mr. Liebhaber would also save money by cutting MCI’s facilities, labor,

and recruiting costs. MCI Communication Corp. retained the strategy of

location planning to solve the problem. They consider optional planning to

what they want to achieve when it comes to organizational problems.

III. Areas of Consideration

This case study explains how organizational relocation planning, in

collaboration with another engineer, results in a more efficient workplace.

 a successful and unique product. It demonstrates what Mr. Liebher gave up to

relocate the MCI Communication Corp to Colorado, despite the lengthy process. It

also demonstrates what benefits an employee will receive if this planning strategy

results in a quick resolution of a problem.

IV. Alternative Courses of Action

This case study demonstrates how a particular location planning

strategy can benefit the company while also motivating each employee. It

demonstrates how highly valued the engineers who create the products they have

are. They believe that MCI Communication Corp.'s relocation provides the

company with collaborations that have resulted in some of the company's most

innovative products.

One disadvantage of planning is that there has been a decrease in African-

American employees since moving location.

V. Recommendation

The company needs to hire more engineers who can contribute

significantly to the development of an innovative and successful product that meets

the needs of consumers. To assist each other's businesses in growing and meeting

customer expectations. The location planning is so important for the company, and in
 MCI Communication Company, we don't need to have culture shock and reduce

employees, we need to think that we need to have a strategy and plan to build a good

product and collaborate with other companies. There is no need for a conflict between

the need to consider what people require and the need to provide it.

VI. Management Lessons Learned

I had an idea of what should be considered before locating the company

in this case study. I learned that in order to have a good exit for a company that will be

built, we need to consider and think more innovatively. I also learned that we must

consider the necessary employees and their rights. Even if there are numerous

conflicts, we must constantly think of new ways to avoid problems. We must consider

both their talent and their rights when discussing diversity.