4. Moving Offsore And The Factors Involved (Week 2) Flashcards
What is teleworking?
- conducting work outside of the traditional workplace
- Utilising IT and telecommunications equipment
- Teleworkers are employees who work away from their usual place of work during normal business hours with the assistance of some form of IT.
- Also includes hot desking and hotelling where employees who are not always physically present and are not assigned a fixed space.
How does teleworking connect with strategy?
- RBV - resources as a source of sustained competitive advantage
- Flexibility contributes to dynamic capability - capacity for learning - renewal and relocation of resources to achieve business goals in continuously changing enviroments
- Teleworking is part of a flexibility strategy in periods of transformation / work fluctuation; fits with externalisation of activities; enhances employee work teim; better control over building space, support faciltiies in periods of business expansaion
What are advantages (8) and disadvantages (6) of teleworking?
Advantages
1. attraction and retention of employees who are seeking greater autonomy
2. Potential positive impact on firm performance
3. Greater organisational commitment and reduced turnover
4. Reduced absenteeism
5. Overhead cost savings
6. Greater flexibility to meet competing work and family demands
7. Productivity improvements (greater control over workflow and less disruption)
8. Potential improvements for individual well-being and health
Disadvantages
1. Social isolation of the individual
2. Reduced sense of beloning
3. Perceived part-time status
4. Not connected with day to day informal communication
5. Low visibility has been connected with poor career advancement
6. Costs of home OHS
Background to offshoring
- Offshoring is changing the organisation of work in all advanced market economies and is linked to the globalisation of the economy and utilising information and communication technologies
- The contentiousness associated with the current wave of (service) offshoring focuses on high-skilled white collar jobs. The significance of the job losses has infiltratied political, economic and social discourse
What is the background to offshoring?
- A form of outsourcing work that is not constrained by actual physical customer contact or local knowledge and thus has the potential to be undertaken globally particularly in low cost locations
- The current interest in (service) offshoring is related to the changing AME production base from manufacturing to service and knowledge. Offshore call centres are a good example of the trend.
Arguments for and against offshoring
- Transfer labour responsibility and cost to a third party
- Avoidence of unions and / or additional employment cost - holidays and super
- Back office work completed overnight ready for the next work day
- Refocus on organisational resources on to ‘core’ activities
- Negate the problem of skill shortage
Most common functions outsourced
- finance / accounting
2. procurment
Most popular modes of offshoring
- outsource to a local third party at the offshore location
Most popular offshoring destinations
- India
- China
- Japan
- Malaysia
Most important reasons for offshoring
- low cost labour
2. high level of expertise
Most significant outcomes
- Improved service quality
- better access to qualified personnel
- increased productivity
Most important strategic driver
- labour cost savings
Cost benefit decision for outsourcing
- As the offshoring services market matures, the complexity of issues confronted by management require a more in-depth and reflective view of the decisions to offshore
- Cost-benefit decision are now taking account of
a. operational difficulty
b. quality and service
c. security, privacy and legal matters and
c. social, moral and politcal concerns.
What are the operational issues related to offshoring?
- operational risk - need to assess the extent of codification or the extent to which work can be easily explained without previous experience and easily measured. Management attitude and lack of experience with offshoring and small scale operations can make offshoring unviable
- Quality and service issues - structural risk which is the behaviour of teh service provide varying from the agreed behaviour; lack of graduate skills; lakc of interpersonal skills such as language, empathy and cultural understanding, teamwork. The expectation that customers in AMEs have for good quality serviceand the ongoing costs of monitoring these isseus
What are the security, privacy and legal issues (4)?
- security of information moving across boarders
- poor governance
- poor legal protection and support at the offshore destination
- loss of copyright control
