The company must identify the strategic objective that it hopes to meet through offshoring. At this point, that has taken place. The decision to look at offshoring has been undertaken on the basis of a television show. This is not a good way to decide corporate strategy. The decision to pursue offshoring should be made on the basis of fulfilling a broader corporate strategy. In the case of this company, there is little reason to believe that there is another benefit to the company to offshoring other than cost reduction. Therefore, cost cutting must be congruent with the company's broader strategy.
In terms of difficulties, one difficulty is that of finding the right cultural fit. Most company do not adequately address this as they tend towards the lowest bidder, a function of using cost reduction as the primary motivation for engaging in the offshoring in the first place. It is recommended that the CEO pursue offshoring on the basis not only cost but cultural fit as well. This is critical because the offshoring needs to be effective. The company has few resources to dedicate to managing this new resource, and the distance and time zone differences will make direct management of offshored employees much more difficult than employees in the same office as the CEO.
It is recommended that to address this problem, a study be done of cultural dimensions. Hofstede's cultural dimensions will provide insight as to which foreign cultures have the best fit with our culture. With this knowledge, a firm can be identified that may be able to provide workers with such a cultural fit. In addition, however, it is important that the company also draw up specific guidelines for hiring workers/companies/contractors offshore. These guidelines will guide the hirers to employees with the best cultural fit. There will still be difficulties, however, so it will be necessary to provide our management team with material on the type of culture with whom they will be dealing. For anybody in the offshore unit that is going to deal with our management directly they should receive training about our culture as well, to ensure that miscommunication and cultural misunderstanding is minimized.
The second problem that was identified is that the remaining employees at home are likely to go through a range of emotions. They are likely to feel fear, anxiety, stress and all of these factors could lead to declines in productivity, increased turnover and other negative outcomes. It will be necessary for management to address these issues as well. The first step towards addressing these issues will be to communicate to the remaining members of the company the rationale for the offshoring and the benefits that it will convey to the company. They need to understand that there is not going to be a second round of offshoring, so their jobs are safe. This will remove the apprehension and fear, and understanding how important the offshoring is to the company will help them to accept and hopefully approve of the plan.
There will also be a second step because this is a small company. The employees likely all know one another. This means that if any offshoring takes place, the remaining staff will have had friends that lost their jobs as a result of the restructuring. This can be expected to cause bitterness and resentment among some employees. Management can alleviate this by communicating the necessity of offshoring -- that it promotes growth, that it will help the company to survive, that it was necessary in the face of stiff competition. The remaining employees must be convinced that the offshoring was absolutely necessary, so that they are less likely to harbor bitterness and resentment on behalf of their former co-workers.
The third problem that needs to be addressed is that of the legal and ethic issues. Offshoring is cheaper for a number of reasons, among them the lack of labor laws in many countries overseas. Moving overseas raises some ethical issues for the company, as many other firms that have gone overseas have noticed -- Nike for example was the subject of sweatshop scandals in its Asian shoe factories.
It is recommended that to address this problem the company create a code of ethics and responsibilities for dealing with overseas suppliers of goods and services. The company most likely does not have such a code. By developing one, the company will not only be able to govern...
By relocating their businesses, companies save significant amounts of money, time, and other resources that can be better used for other purposes, therefore increasing the company's productivity and general efficiency. Also, "this positive effect of offshoring is considered the primary reason why companies prefer to outsource their jobs to other countries, especially those in the South East Asia since wages are undeniably cheaper" (ePacific, 2007). In addition to this, it
It may come back tenfold, as corporations suggest, in overall income from exports, higher salaries in poor countries whose recipients will become consumers of American goods, and higher profits for American corporations in the meanwhile because of lower overhead. Still, as Hira and Hira suggest, it would not hurt to take precautions that American jobs are protected by first of all admitting that a problem exists, by gathering data
Offshoring Gordon and Rutt (2008) attribute the rise of globalization to cheap gas, but that is only part of the story. Cheap gas makes shipping around the world competitive, but does the high cost of doing business in the U.S. relative to other countries. For simple tasks like manufacturing, many countries around the world are capable of leveraging their cheap land and/or cheap labor to produce at a level of quality
"Dell recently established customer and technical support centers in India, China, Morocco, Panama, and Slovakia and has set up design centers in Taiwan and China. Furthermore, it not only has manufacturing facilities in Texas and Tennessee, but also in Brazil, Ireland, Malaysia, and China" (Pruitt, 2012). Eeven though Dell has come under fire along with other companies by critics who say that offshoring is robbing U.S. citizens of jobs, the
Personally, the practice of offshoring is abhorrent and to be avoided. It takes jobs away from qualified American workers simply for a company to save money. Many companies pay their offshore employees extremely low wages that lead to sweatshop like working conditions for many in the manufacturing industry. Companies are entitled to make a profit, but when it is at the expense of the workers who create their products, then
Offshoring Country selection: China China, undeniably, represents one of the best markets to perform a clinical trial. It is home to the largest global urban population, and provides an extensive patient pool as well as a vast network of hospitals. The country boasts of nearly 1.4 million physicians/doctors and over 1 million technicians and nurses. Low medical staff salaries partly contribute to lowering clinical trial costs in China by around 50% of
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