...While information technology outsourcing in general is not a new concept having been in existence in facilities management for several decades, global software outsourcing and global software development via offshore subsidiaries is a relatively more recent phenomenon becoming visible only in the early 1990s. The growth of interest in these arrangements is in part due to the pervasiveness, improved efficiency and reduction in cost of communications technologies. This is coupled with the pressure that North American and European companies are experiencing to look globally to meet their current software development manpower shortages. Companies such as Xerox and Kodak have internationally outsourced major pieces of their information systems operations and while such positive experiences are given prominence in the popular press, other not so-successful global software outsourcing experiences are often overlooked. One of the major reasons for the growth of global software development is because unlike material goods, digital information can be transported cheaply and easily. Software development tasks can be exported abroad for potentially increased access to advanced technological expertise and for reduction in costs. There are two major categories of global software outsourcing: “information systems related” and “information processing related” services. While the first category includes software development and maintenance activities, the second concerns the more routine data...
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...Demographic Complementarities and Outsourcing: Implications for India By: Mukul G. Asher Professor, LKY School of Public Policy National University of Singapore e-mail: sppasher@nus.edu.sg and Research Scholar Department of Economics National University of Singapore e-mail: amarendu@nus.edu.sg Amarendu Nandy May 2006 Draft – Not to be cited without permission The authors would like to thank anonymous referees, Sanjeev Sanyal, Amlan Roy, Anantha Nageswaran and R. Swaminathan for their useful comments. The usual caveat applies. _______________ This is a longer version of the paper prepared for IMRC 2006 conference on Global Competitiveness through Outsourcing: Implications for Services & Manufacturing, Indian Institute of Management (IIM), Bangalore, July 13-15, 2006. Abstract This paper analyses the implications of differing global demographic trends for India’s competitiveness in outsourcing and offshoring. It also briefly notes the implications of differing demographic trends among the Indian states. The paper argues that demographic complementarities with high-income countries provide India with one-time opportunity to sustain its growth rate and occupy all segments of global outsourcing and offshoring activities. India has used the labor cost advantage to gain reasonable market share in these activities. It however faces serious internal and external challenges in sustaining its international competitiveness, particularly with respect to labor cost....
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...TABLE OF CONTENTS CONTENTS | 1 | INTRODUCTION | 2 | PROBLEM STATEMENT | 16 | SOLUTION | 18 | RECOMMENDATION | 42 | CONCLUSION | 52 | REFERENCES | 55 | COURSEWORK | 56 | INTRODUCTION What Is International Trade? International trade theories are simply different theories to explain international trade. Trade is the concept of exchanging goods and services between two people or entities. International trade is then the concept of this exchange between people or entities in two different countries. People or entities trade because they believe that they benefit from the exchange. They may need or want the goods or services. While at the surface, this many sound very simple, there is a great deal of theory, policy, and business strategy that constitutes international trade. Below are the different trade theories that have evolved over the past century and which are most relevant today. Plus the factors that impact international trade and how businesses and governments use these factors to their respective benefits to promote their interests. What Are the Different International Trade Theories? In more recent centuries, economists have focused on trying to understand and explain these trade patterns. To better understand how modern global trade has evolved, it’s important to understand how countries traded with one another historically. Over time, economists have developed theories to explain the mechanisms of global trade. The main historical theories are...
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...Answer this question for me is anything near you made in America? Check your phone, shirt, shoes, anything. Now the reluctant expected answer should be, no. Now you probably did find China, Vietnam,Mexico,Bangladesh, or Thailand. The reason for all this is to make a point on how much Americans lives are outsourced. Outsourced is defined as to obtain a good or service from an outside source.Outsourcing has benefited individuals, businesses, and the world for centuries, however, through its brutalized international evolution, the country could suffer. The first type of individual outsourcing that everyone has been aware of for centuries is obtaining domestic help. The world has outsourced in this way for a very long time. Everyone has done this for similar reasons as to why anything is outsources because it saves time and efficiency while wanted tasks improve. Proclaimed in U.S. News & World Report - Money on “Why You Should Outsource Domestic Chores”...
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...Eric Newton 11/29/14 To Offshore or not to Offshore Outsourcing is a method that is becoming more of a normal business technique each and every year. The root definition of outsourcing is to transfer different operations of business to outside suppliers that provide lower costs. Examples of this would be companies giving an independent accounting firm the right to maintain their books because it may be cost beneficial as opposed to hiring an accounting department. A real life example would be Apple obtaining computer chips from their rival Samsung instead of making their own. In the last couple of decades, many more companies have been utilizing a different form of outsourcing, that is offshoring. Offshore outsourcing is essentially just outsourcing, in different countries where the quality of work may be better or cheaper. Larger companies typically use offshore outsourcing because the cost of transporting items or products overseas wouldn’t seem as material as would with a low-income company. Some different types of offshore outsourcing are manufacturing, research and development, accounting, human resources, and more (IWDRO). One of the more common types is manufacturing, and it is also one of the more controversial because some major companies such as Nike have been known to take advantage of the cheap labor overseas by not obliging to the human rights standards. Is it ethical for companies like Nike to overload all of the dirty work (manufacturing)...
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...As companies look for ways to strategically perform better in their respective industries many chose to outsource job functions. Outsourcing allows companies to grow and expand their business around the world. Many have attributed outsourcing to lowering operating costs, a method to increase expertise and gain additional technology, and as a way to improve efficiency and services. These advantages can help a company gain a competitive advantage over industry participants. When a company strategically plans to outsource ethical consideration must be acknowledged; especially when outsourcing is offshore. As a display of corporate citizenship a company must do their part to address ethical concerns related to this practice. Building a long term relationship with the outsourced company will aid in cultivating the competitive advantage. The following ethical principles can ensure the longevity of the relationship. One of the first principles states “seek not harm indigenous cultures” the company must become aware of the culture where they chose to outsource their business to. Understanding the cultures is a way to avoid ethical problems that could arise from not acknowledging cultural norms; rule-based or relationship based. Rule-based relationships support the basic principle that “seeks to uphold basic human rights.” To ensure you have engaged and satisfied employees display a courtesy for justice, equality, and their basic human rights. Not only must the culture and rules of...
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...issues that is vital in outsourcing is whether Chrysler wants strict management control for day-to-day activities. By outsourcing to TCS, Chrysler will be outsourcing its maintenance and support services, particularly its sales, marketing, product development, shared services and after sales functions . Although Chrysler has the general oversight of the project deliverables, it is still done by the outsourcer. This would impact project approach, employee morale, customer interaction and feedback. For example, a recent outsourcing which proved to not be a good idea was customer support for computer equipment sales by Dell. Dell could not control the interaction with their customers and there were numerous complaints about communication skills, product knowledge and general attitude of the outsourced technician . These services that are outsourced to TCS are part of Chrysler’s daily operations and thus stringent management control over these activities must be carefully explored to ensure quality services and excellent customer service. Organization Issues The main organization issue that Chrysler should have considered would be the morale of employees and public reputation during their decisions to outsource. It was reported by Bertsch that, 200 people, 20 percent of the full-time employees, were scheduled to lose their jobs because of the new outsourcing arrangement . By laying off workers, many labour unions have been protesting against outsourcing and want the government...
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...mixing of various cultures. The tern covers a range of aspects including economic, cultural and political trends. It also signifies the tendency of businesses and investment funds to cross national and domestic markets to other locations all over the world ending up strengthening the way various markets become interconnected, increasing international trade and enhancing cultural exchange. Globalization enables companies to draw workers from different cultural backgrounds and gain fresh insights into various cultures from the standpoint of marketing and management. The changes necessitate companies to learn the ways of dealing with the diversity and adopt new guidelines and policies. As more firms access foreign companies that provide outsourcing, employee wages tend to change significantly. The cultural, ethnic and religious diversity presents the need for increased employee training. Since more companies are operating on an international platform, employees begin working in foreign countries. With globalization it is relatively easy to manage projects from different corners of the world. Companies can also increase efficiency in their projects by comparing how other projects run in different parts of the world. Globalization has a huge impact towards increasing competition in the business world. The competition usually relates to service cost, products, price, technological adaptation, quick production and quick response among others. Presently, the market has a broad range of...
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...Running head: Outsourcing Characteristics Outsourcing Characteristics Name CMGT 578 23 September 2013 Professor Scott Goodman Outsourcing Characteristics In this paper, the Outsourcing features will be talked about in great deal and the features will consist of what are the influential aspects in a company determining to outsource. One reason that most companies select to outsource is that they have a prospect to reduce needless expenditure. In addition, the risk engaged in outsourcing will also be reviewed, this risk is that company information is no longer confidential and the partners you selected to outsource currently to have access to all the company information. Faith and professionalism is significant in selecting to outsource to a partner. The advantages of outsourcing will also be conferred in this paper as well. I will explain in detail the method following outsourcing and the company following outsourcing. When establishing whether a company is supposed to, they contemplate many elements and one may be nothing, but the cost cutback. This also has an effect on estimate timelines, project timelines are decreased and the labor cost is cheaper. Many companies that decides to outsource their business because the pay rate is considerably lesser in the region where they would contract out their job. Another deciding element is in the assessment to subcontract the company, they do not have to employ consultant or experts...
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... but Flextronics cannot keep up with these changes. In addition, Lego bids for a lower price at the beginning and lock it over a long period, which is hard for Lego to convince Flextronics that its profits has been considered as well. Without a profitable business model for both parties, a win-win solution is hard to achieve. The second challenge is especially for Lego, since it has little prior experience in outsourcing a large amount of production, but decide to outsource 80 percent of its production to Flextronics. There will be many unexpected situations. Lego doesn’t have an accurate picture of what should happen when. In particular, Lego is a European company while Flextronics is from Singapore. They may have different culture, thinking and working styles. Setting up processes for sharing information at all levels is especially important for cooperation than in-house production for both companies. Moreover, Lego has several categories of products, and it keeps broadening its portfolio into new areas. Therefore, transition internal operations to an outsourcing partner, typically involves so many staff, can...
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...Kelly Services, Inc. 999 West Big Beaver Road Troy, MI 48084 December 2, 2012 Mr. Laszlo Bock, Senior Vice President People Operations Google, Inc. 1600 Amphitheatre Parkway Mountain View, CA 94043 Dear Mr. Bock: You’re invited to join 90% of Fortune 500 companies that have streamlined human resource management while maintaining a high performing workforce. We at Kelly Services are making this offer because we know it’s hard for growing companies to process job applicants and continue recruiting top talent while controlling expenses. Adapting the hiring process to meet the needs of a large company requires a special approach. Recruiting efforts must be coordinated to avoid wasted endeavors. Outsourcing projects is a consideration to limit rising recruiting cost. To add complexity, offering a broad spectrum of products and services on a global scale requires workers with various skill sets in multiple countries around the world. It is necessary to fill specific positions, while juggling the need to maintain equal opportunities for individuals with diverse backgrounds. Geographic and cultural barriers can make it hard to source qualified workers. Kelly Services understands the issues facing Google and knows the difficulties involved in managing human resources in a large organization without an experienced partner. That is why we are offering our proven expertise, which has won multiple awards from successful companies such as Chrysler, Ford, Intel,...
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...Impact of Outsourcing in improving productivity in modern Organizational Introduction In today’s world of ever increasing competition, organizations are forced to look for new ways to generate value. The world has embraced the phenomenon of outsourcing and companies have adopted its principles to help them expand into other markets (Bender 1999). Strategic management of outsourcing is perhaps the most powerful tool in management, and outsourcing of innovation is its frontier (Quinn 2000). Outsourcing is a management strategy by which an organization delegates major, non-core functions to specialized and efficient service providers, or as Corbett (1999). President of Michael F. Corbett and Associates asserts, Outsourcing is nothing less than the wholesale restructuring the corporation around our core competencies and outside relationships. The traditional outsourcing emphasis on tactical benefits like cost reduction (for example, cheaper labor cost in low-cost countries), have more recently been replaced by productivity, flexibility, speed and innovation in developing business applications, and access to new technologies and skills (Greer, Youngblood, and Gary 1999; Bacon 1999). The market for providers of outsourced services of all types is growing rapidly. In 1996, American firms spent over $100 billion in outsourced business activities (Casale and Overton 1997). Other estimates place the total U.S. market for outsourcing at more than $300 billion by the year 2001 (Dun and...
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...Jacksonville, Florida that distributes ever type of sportswear from head bands to athletic shoes. Artemis Sportswear has been around for seven years but is in a market with increased competition, tight budget, and regulation changes. The company is looking at profit loss if something is not done. The company’s past sales history, current and projected business plans, and budget one can conclude what is taking place. This is why Artemis sportswear is in the process of figuring ways to cut back on some of their expenses and still increase the profit growth. Labor Costs In today’s cutthroat business existence, this firm faces challenging choices concerning costs. Labor (employees) is one area where operational costs can be slashed. Overtime, outsourcing, benefits, retirement, and salaries are other areas that can be examined to cut expenses. Overtime pay can be very costly to companies. Companies generally pay time and half and double time when employees work an excess of 40 hours and for holidays. To cut expenses, overtime must be...
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...Perceived Impact of Outsourcing on Organizational Performance Dean Elmuti, Eastern Illinois University Introduction In todays world of ever increasing competition, organizations are forced to look for new ways to generate value. The world has embraced the phenomenon of outsourcing and companies have adopted its principles to help them expand into other markets (Bender 1999). Strategic management of outsourcing is perhaps the most powerful tool in management, and outsourcing of innovation is its frontier (Quinn 2000). Outsourcing is a management strategy by which an organization delegates major, non-core functions to specialized and efficient service providers, or as Corbett (1999). President of Michael F. Corbett and Associates asserts, Outsourcing is nothing less than the wholesale restructuring the corporation around our core competencies and outside relationships. The traditional outsourcing emphasis on tactical benefits like cost reduction (for example, cheaper labor cost in low-cost countries), have more recently been replaced by productivity, flexibility, speed and innovation in developing business applications, and access to new technologies and skills (Greer, Youngblood, and Gary 1999; Bacon 1999). The market for providers of outsourced services of all types is growing rapidly. In 1996, American firms spent over $100 billion in outsourced business activities (Casale and Overton 1997). Other estimates place the total U.S. market for outsourcing at more than $300...
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...Chapter 6 1. Discuss why companies “go international,” giving specific reactive and proactive reasons. Companies go international for many reasons, including reactive ones, such as international competition, trade barriers, and customer demands. Proactive reasons include seeking economies of scale, new international markets, resource access, cost savings, and local incentives. Those companies which are proactive in establishing a presence in many countries from their outset are referred to as “Born Globals.” 4. Explain the process of environmental assessment. What are the major international variables to consider in the scanning process? Discuss the levels of environmental monitoring that should be conducted. How well do you think managers conduct environmental assessment? Environmental assessment is the first major way to weighing international strategic. The assessment includes environmental scanning and continuous monitoring to keep abreast of variable around the world that are pertinent to the firm and that have the potential to shape its future by posing new opportunities. Environmental scanning is the process of gathering information and forecasting relevant trends, competitive actions, and circumstances that will affect operations in geographic areas of potential interest. Scanning should focus on the future interests of the firm should cover the following major variables. 6. Discuss the relative advantages of globalization versus regionalization/localization. Advantages...
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