...report is written in efforts to evaluate ethics of outsourcing and the dilemmas involved. | Ethics of Outsourcing Outsourcing has been the target of many positive as well as negative topics amongst many Americans. The United States economy has taken many hits and efforts to reduce costs have resulted in increased outsourcing in labor as well as service industries. The ongoing debate of whether outsourcing is unethical does not fall only in the act of outsourcing itself but also in the terms to which outsourced employees are treated. The question of whether mass layoffs are justifiable or ethical toward employees who are dedicated to corporations for so many years and whether resorting to illegal labor is ethical are also derivatives of outsourcing. We continue to ask ourselves if this form of cost reduction and its effects on the U.S. employees morally ethical? In these challenging economic times, there has been a large array of speculations towards the subject of outsourcing jobs to other offshore destinations. Outsourcing has been going on around the world for a large amount of time before now. Though it seems to be more of a negative topic of discussion during the fall of the American economy, it is important to realize the positive global impacts it has created. It is still considered a morally challenging topic, but there are both advantages and benefits that are being reaped around the world from outsourcing. Outsourcing has been a leading marketing tool for allowing...
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...Introduction This Internet article, Advantages & Disadvantages to Outsourcing IT, offers a quick summary on the pros and cons of outsourcing. Outsourcing allows vendors who specialize in their field to adequately plan and implement a particular subset of tasks. The outsourced vendors also have specific equipment and technical expertise, most of the times better than the ones at the outsourcing organization. (Williams, 2008). This article also discusses the utilization of outsourcing can lead to a decrease in financial overhead and operation costs. Services are contracted out, the need for office space, through rent or ownership, is greatly reduced or eliminated, as is the need for parking and travel. Outsourcing, also, eludes the need to hire individuals in-house; hence recruitment and operational costs can be minimized to a great extent. According to the article, the biggest concern is the inability/challenge of ensuring the most effective and efficient processes are employed to meet the organizations requirements. Operation can be hindered or difficult due to the geographical distance, time zone difference, and lack of face-to-face communication. Outsourcing lends to a lack of onsite expertise, this can be problematic as the organization grows. (Williams, 2008). While the issues abound, the largest issue is the risk and exposure an organization has when dealing with a third party, outsourcing risks poses a risk in breaching of confidentiality and other malicious use...
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...Problems in outsourcing 1. Executive Summary Outsourcing is the way of distributing the work in an organization to the other companies, in case the parent company is not having the expertise in handling the situation. Hence, the companies are entering into different business opportunities, even though they are not having the expertise and thus outsourcing the work in the organization to the other potential companies. The outsourcing may be national or international. Generally the outsourcing will be highly seen in the service industry rather than the manufacturing industry. When the work is being distributed to other companies, there will always be a scope for the cultural variations which will affect the efficiency of the organization. As the service outsourcing deals with the different cultured people involved, it is highly discouraged to tie up the performance of the company with the cross cultural management of the organization. Hence, the companies are adopting the cross cultural management such that the different cultured people, processes and the operations will be run under a same hierarchy which will be monitored by the management of the organization. In this document, the effect of the cross cultural environment will be discussed in the outsourcing department and how they have faced problems in designing a global strategy to handle the outsourcing. The management theories like Trompenaars will be specified in this document to enhance the knowledge of these theories...
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...This paper describes the situation at the United States (US) based company, Global Communications (GC) in the telecommunication industry. Different challenges and opportunities at GC are discussed. The paper continues by discussing the different stakeholders' perspective/ethical dilemmas and continues by framing a problem statement for the Global Communications situation. An expected end state situation is then described for GC scenario. The paper continues by analyzing different alternative solutions to the Global Communications situation , the risk for each solution is described and an optimal solution from a numbers of alternative solutions is selected. An implementation plan for the selection solution for the Global Communications situation is described and a metrics to monitor the plan is presented. This paper concludes by reviewing the selected solution to the situation and discussing the expected result. Issue and Opportunity Identification As a result of competition from cable companies, the United States based company, Global Communication (GC) is losing market share and profitability in the telecommunications market. The traded stock value has dropped from $28 to $11 in a two year period and stockholders are receiving diminishing returns (University of Phoenix, 2006). The stockholders have lost confidence in the management. Management is under pressure to renew stockholders confidence by increasing returns on the stock and the traded stock value. Senior management...
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...Supply Management Outsourcing Purchasing is common to all organizations with any kind of supply function. It is one of the basic processes of supply management. As time has gone by, the term ‘purchasing’ has taken on a broader definition. As companies become more independent, more competitive, and start growing towards the future in technology, specifically e-commerce, purchasing becomes a strategy. Purchasing became “strategic sourcing.” Strategic sourcing has become a huge responsibility for the supply manager. There are a few activities that strategic sourcing accomplishes for the manager. It allows the manager to strategize the spending habits of the company, it forces the manager to strategically look in to the supply market for any changes, trends, and what other firms are offering, and it provides a method to develop a sourcing strategy that fits the company’s strategy to lower costs and risk, while bringing in a profit. Profit is produced through mastering or at least competently managing the five M’s; machines, manpower, materials, money, and management. Part of that strategy is where and how to source these 5 M’s that will meet the cost strategy of the company. This brings up the most strategic question a firm can ask of a supply manager; to make or buy? To meet the company’s needs that will consequently meet the current demand, should the company in-source or outsource? What should the company outsource? What are the functional areas of supply management...
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... Events that lead to the need for an evaluation of IT Governance within the Brazilian government were the fact that there was an increasing need for business integration. That business integration can only be achieved by aligning with IT services. By doing this, value will be created while reducing costs. Information technology is the largest capital expense that contributes to a correctly managed firm and allows the organization to effectively achieve its business goals. This is necessary to standardize business and customer needs and for the progression of the country. 2. Why had the Brazilian government outsourced so much of their IT operations? What are the reasons for outsourcing, and what are the disadvantages and consequences of overusing outsourcing in either the public or private sector? There are many reasons why an organization would outsource some of its responsibilities to another country. The question to ask is if the return outweighs the risk of the investment. America outsources a lot of its production to Brazil to be manufactured. As a child, everything seemed to be “made in Brazil”. In the restructuring of the government, it was decided to outsource the IT operations. Some reasons...
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...Abstract Global Communications (GC) was facing a major decline in revenue, profits and stock values and had to make serious upgrades in its business practices. GC had to determine a cost-effective way to ensure their company would survive. The solutions involved outsourcing jobs, laying off workers and offering new services as well as teaming up with a satellite provider. Although stakeholders realized without these changes, GC would not survive, it is found to be difficult for some long-term stakeholders. GC’s approach appeared to have personal and ethical conflicts as they failed to communicate with employees. GC has identified the problem, strategized with its stakeholders, implemented a plan and has set the process for reevaluation and changes, if necessary. GC has found other companies, in and outside its industry, to benchmark and has taken the best practices for issues similar to theirs and have used them to increase revenue, and forego any immediate outsourcing of call center jobs. However, GC has a communication problem, in that the union was never consulted or included in the decision to outsource positions. Whey they learn of the idea, the union is very upset as they worked very hard to have employees agree to a decrease in benefits previously. The union is outraged and states they will fight the newly devised plan for its members. Implementation of these changes would allow GC to lead the communications industry globally, while providing their small...
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...Adversity of Outsourcing: Outsourcing from the Employee’s Perspective Schillen & Steinke Mitigating the Adversity of Outsourcing: Outsourcing from the Employee’s Perspective Sarah J. Schillen Seattle Pacific University USA sschillen@gmail.com Gerhard Steinke Seattle Pacific University USA gsteinke@spu.edu ABSTRACT This paper explores how outsourcing activities and decisions put the well-being of the remaining employees at risk, ultimately affecting productivity and creating further costs to the employer. It highlights four potential threats to remaining employees: trust, job satisfaction, motivation, and stress. The paper provides several suggestions for mitigating these impacts, including communication to retain trust, acting ethically to ensure satisfied employees, seeking an understanding of employee perspectives to build employee motivation, and providing good planning along with training and development to reduce employee stress. INTRODUCTION Globalization provides organizations with more options than ever before. Business leaders are continuously encouraged to adapt, reevaluate, and strategically improve processes and approaches. Best practices are reinvented rapidly in attempt to keep up with market trends. The quest to recognize new methods for increasing revenue has become the inspiration for exploring new management techniques and strategies. One such rising trend in the advent of global markets is that of outsourcing. Common purposes for outsourcing include improvements...
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...who answered her call had such a thick foreign accent that she could not understand them. She explained to the representative what the problem was, but she could not understand any of the information given to her. She asked to speak with a different representative; after being placed on hold for several minutes, she had no better luck with the new representative. She and her husband tried several more times to communicate with them, finally hanging up in frustration. They vowed to never purchase another thingamajig from the Computer Company again. They have just experienced offshore outsourcing. Offshore outsourcing of customer service is unethical and may have negative effects on the economy. Outsourcing customer service is companies hiring other firms to perform their customer service operations for them. Offshore outsourcing is contracting with firms in other countries. Offshore outsourcing is also known...
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...Abstract LPO (Legal Process Outsourcing) is currently one of the fastest growing industry as it provide low-cost and time saving services. This study aims to know about LPO, specifically its origin, the services it provide, its quality and satisfaction, its impact in the legal industry and its status nowadays. The theories related to the topic like Transaction Cost Theory and Value Chain Analysis are discussed in theoretical framework. In addition, this research uses descriptive type of design as a method. Finally, conclusions are formed based on the data collected from the instruments used relevant to the topic such as PDF’s, books, and articles from the internet. CHAPTER I Introduction Legal industry operates in a global market place, and both clients and firms are seeking to understand how global outsourcing can add to their business. Lawyers have always outsource work to other lawyers with specialist knowledge. Firms are using their offices in other jurisdictions to do their legal work and offering that services to other firms. (The Law Society, 2011). In the Philippines, Legal Process Outsourcing (LPO) is one of the fastest growing sector in Business Process Outsourcing (BPO) industry. Many LPO’s have out growth due to increasing demand for legal outsourcing and off shoring abroad. Various U.S law firms chooses Philippines because of its highly educated lawyers who are experts in their fields, high English proficiency, similar with the US legal systems, lower labour...
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...1 Percent vs. General Public Upper class vs. the common people and the effects of the upper class interest to keep power; how well does the 1 percent of America represent my interest? I say it is a 50/50 relationship. They like money and power, and they, would do whatever it takes to keep it, so the decisions keep business as usual helps keep people employed but at the same time business as usual can mean the opposite. Money equals power, and I believe that, there (Americas 1 percent) interest to keep making money and to keep power they would do what’s required to keep our economy going witch mean job security for right now. Job security is something scares right now, and economy is not getting better. When the upper 1 percent of America that’s controls large businesses that employee a majority of our community decide to move to another country to save money that is when we (community) have conflicted interest with the upper 1 percent. Interest and conflict is something happening all too much now a day. America’s general public is not much different from the upper class when it comes to interest. The upper 1 percent wants to make money and so do the general public the only difference is that if the upper 1 percent decides to take their assets to another state let alone another country our general public will end -up with conflict. This is just one of the main reasons our economy is hurting, and our general public unemployment rate has gone up. It is a 50/50 relationship...
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...Outsourcing refers to a company which contracts with another company in order to provide services that might otherwise be performed by its own employees. These jobs are handled by separate companies that specialize in each service. Often, these outsourced employees may be located overseas. To know whether outsourcing is appropriate in a given circumstance, it is important to understand several key concepts. Many professors and experts in the business world have conducted case studies and general research to understand the implications of outsourcing, both positive and negative, and the environment which provides the greatest chances for a successful outsourcing venture. The framework within which a firm must decide whether to outsource or not will often involve a two-stage decision process. First, the business must make its decision and secondly, it must take managerial action to implement the decision. To begin with, a company must identify why outsourcing can be useful in an ideal situation and then evaluate whether their circumstances fit these conditions. Essentially, outsourcing can ideally benefit a company from a financial perspective since the outsourced work can be cheaper in and of itself and secondly because it allows the company to focus on other, perhaps more pressing issues. As important as it is that the company can identify appropriate conditions it is equally necessary to be aware of circumstances which will not provide an appropriate environment to outsource...
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...Abstract For the past four decades, outsourcing has provided organizations in running aspects of production and operations (Corbett, 2004). Designed to help build better businesses, stronger economies, and improve conditions in developing countries, outsourcing has become a popular business concept. The purpose for this paper is to review outsourcing as a viable business concept, identifying how outsourcing is used, benefits and setbacks, and options available for business support. The author will examine the concepts driving companies to use outsourcing as a worthwhile business strategy, utilizing several sources showing progression from initial conception to present day use. With today’s rapidly changing environment, one must question how outsourcing will adapt, allowing for continued success. Introduction In recent years, consumers have felt the impact of outsourcing on a personal level as they contact technical support for computers, satellite, and other services. While the ideas have been utilized for decades, outsourcing has become more common today as companies attempt to downsize without compromising success. The following will examine the concepts driving companies to use outsourcing as a worthwhile business strategy, utilizing several sources showing progression from initial conception to present day use. Outsourcing Overview Outsourcing involves transferring work or tasks to an external party, allowing for partnerships with other organizations (Power, Desouza...
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...Global Communications Problem Solution Paper and Defense Problem Solution: Global Communications (GC), once riding the telecommunications boom of the 1990's, now has a plummeting stock price and very nervous board of directors. The future of the company depends on its ability to benchmark and outsource operations while effectively communicating the strategic plan in an ethical way. Like many of their competitors in this volatile industry, profit margin is shrinking, competition is intense, and the whole industry seems to be a losing bet on Wall Street. GC has fallen behind the telecommunication industry. GC feels the pressures of the industries and trying to keep up with its competitors while watching its stock prices fall. Yet the investors are giving GC pressure to correct the problem. GC needs to offer better or a new services than what their competitors are not providing to their customers. Simply put, Global Communications is not where it needs to be in terms of globally viable business opportunities and general profitability. Our paper will present the problems currently confronting Global Communications (GC) and the solution of implementation of an aggressive approach to be a truly global resource. This paper will discuss the alternative solutions to their existing problems, risk assessment for the suggested alternative solutions, the optimal solution, and lastly the implementation plan to deal with the problem. Issue Identification GC has...
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...Exploring the Factors Affecting Hotel Outsourcing: Taiwan Case The purpose of this study was to examine factors affecting hotel outsourcing in Taiwan. A series of two studies was performed. In study 1, content analyses of senior hotel manager interviews were conducted to explore factors determining hotel outsourcing, including jobs requiring capabilities and skills that may be difficult to afford with the hotel’s tight or limited resources, a hotel’s resources and its business scale, transaction costs, and jobs with standard operation procedures. A questionnaire survey was used in study 2, and results indicated that the percentage of current outsourcing and desired outsourcing for international tourist hotels in Taiwan was very low, showing that strategic outsourcing has not received much attention among Taiwanese international tourist hotels. The most outsourced hotel departments were housekeeping, security, maintenance, and information systems. The findings of study 2 also showed that only hotel’s resources influence the outsourcing decision-making. The effect of predicting outsourcing was not significant for transaction costs. The results of this study provide both hotel management and outsourcing service providers with insights of hotel outsourcing in Taiwan. Keywords: Hotel outsourcing; transaction costs, valuable resources; asset specificity; international tourist hotels Introduction Due to economic globalization, market maturity, technological change,...
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