Research Paper on "Outsourcing Jobs to India"

Research Paper 10 pages (2981 words) Sources: 10

[EXCERPT] . . . .

Outsourcing jobs to India.

Outsourcing to India

The process of globalization led to significantly increased competition in most business fields. Local companies are forced to compete in their domestic market with foreign companies that come with less expensive products and services. In order to maintain their competitiveness, companies must apply strategic alternatives that allow them to reduce their costs while maintain their quality level. Outsourcing is one of these strategic alternatives. Most corporations started by outsourcing their production process to cheaper destinations in order to reduce production costs and to be able to provide competitive prices. In addition to this, companies decided to establish several production plants near the markets they intend to address. Furthermore, companies continued the process by outsourcing it jobs in order to reduce costs with the workforce and to benefit from the knowledge and experience of employees in other countries.

The most preferred destinations for outsourcing are represented by China and India. These emerging markets resent several advantages for Western companies that outsource some of their processes. They provide a wide talent pool and skilled workforce at lower costs. Additional expenses are also less expensive in these countries. Given the fact that numerous companies outsource their processes and benefit from reduced costs, this situation determines other companies to follow this strategy.

However, when deciding to outsource some of their processes, companies must also take into consideration the disadvantages of this activity. For example, some of the customers that purchased consumer goods have complained about the quality of these products. This is because the workers in these countries are not necessarily able to reach the high quality standards imposed by these companies and their customers.

Advantages of Outsourcing to India

The outsourcing process is connected with the globalization that started to impact India since the early 1990s the country's government identified the potential opportunities that could be exploited with the right strategies in order to improve the country's economy. Therefore, the government developed and implemented a series of liberalization and privatization reforms. One of the most important reforms is represented by the privatization of the telecom services sector. The strategy determined a series of business opportunities for Indian and Western companies because numerous inbound call centers, telemarketing services, and data processing centers were developed (Outsource2India, 2011).

This was followed by the outsourcing in the it industry. Initially, companies outsourced medical transcription services. In addition to this, the Indian outsourcing market provided services that refer to data processing, medical billing, and customer support services. The range of the outsourcing services provided by the Indian market significantly developed, and it currently includes also database marketing, web sales and marketing, accounting, tax processing, transaction document management, and others.

There are several advantages that India can provide to companies that want to maintain their competitive advantage. The most important advantage is represented by the reduced costs that Indian companies provide for their outsourcing services. Some of these companies claim that by outsourcing to India, Western companies can save more than half of their operating costs. In addition to this, India is able to provide a continuously growing workforce that is highly educated, skilled, and trained in several technical fields. The technical talent that characterizes most of the Indian workforce allows the country to provide cost effective services. This way, outsourcing companies can expect not to reduce the quality standards they established.

In order to support these quality standards, Indian companies that provide outsourcing services focus on using cutting edge software, technology, and infrastructure. These are considered to be the most important ingredients that determine high quality services. From this point-of-view, India is advantaged in comparison with other outsourcing destinations. This is the reason for which India is preferred for outsourcing it and other technical services, while China is preferred for outsourcing production services.

There are certain aspects that must be taken into consideration when companies decide to outsource their services. One of these issues is represented by time zones differences. This is another advantage that India has in comparison with other outsourcing countries. The outsourcing companies in India are able to provide continuous assistance.

When investing in other countries, companies are interested in the economic, political, and social environment in these countries. This is because the stability of their environment contributes to the company's stability. The fact that the Indian political environment is a stable one has determined Western countries to choose this outsourcing destination. The country's government is committed to support the development of the it sector by financing technology and infrastructure.

The Cultural Dimension

The cultural environment is an important factor that U.S. companies assess when outsourcing some of their processes. The cultural differences between the Western civilization and the Indian one refer to numerous aspects that must be understood by all stakeholders when outsourcing. Indian employees respond to different types of motivation than U.S. workers. Therefore, it is necessary that U.S. companies benefit from the advice of specialized Indian companies.

Given the cultural differences between the two countries, in order to make correct business decisions, U.S. companies should not behave in India in the manner they behave at their headquarters. Significant research in the field has been conducted by Geert Hofstede in order to help individuals and companies understand the differences between cultures and to reduce the conflicts determined by these differences. The cultural dimensions identified by Hofstede as factors of influence are represented by power distance index, individualism, masculinity, uncertainty avoidance index, long-term orientation.

The Cultural Dimension of India

The highest scores of India's cultural dimensions are represented by the power distance index and by the long-term orientation. This means that these cultural dimensions are representative for the country. India has a power distance index higher than the world average. This means that there is a high level of inequality of power and wealth in the Indian society. It also means that the country's population accepts this situation as being something normal (ITIM, 20090. The fact that the country's long-term orientation is higher than the world average reveals a perseverant and parsimonious culture.

The country's masculinity index is also rather high in comparison with the world average, which means that there is a significant gap between men and women's values. In addition to this, this index means that the female population in this country tends to be more competitive and assertive than that in other countries, but not as much as the male population.

The country's individualism index is slightly higher than the world average. This means the Indian society is characterized by collectivism. In other words, Indians are oriented towards integrating in strong groups, usually represented by extended families. The lowest score in India's case is represented by the uncertainty avoidance that is significantly lower than the world average. This means that the Indian culture is more open to unstructured ideas and situations. It also means that the Indian society is characterized by a small number of rules intended to control situations.

The U.S. Cultural Dimension

The highest dimension in the case of the U.S. is represented by individualism that is significantly higher than the world average. This means that the country's population has an individualistic attitude and people are usually self-reliant and look out for themselves and for their family members. The country's masculinity index is also significantly higher than the world average. In other words, male are dominant in the society and in the power structure. This determines the female population to become more competitive and assertive.

The country's low uncertainty avoidance index reveals the fact the U.S. society is characterized by a small number of rules and it is not oriented towards controlling situations. In addition to this, the country's culture tolerates various ideas (ITIM, 2009). The country's power distance index is lower than the world average, which means that the U.S. society is characterized by equality between social levels. This determines cooperation between power levels within the country and a stable cultural environment. The lowest dimension in the case of the U.S. is represented by the long-term orientation. This means that the society is interested in meeting obligations and in cultural traditions.

The Work Environment in India

It has been observed that Indian workers prefer formal behavior and feel somewhat uncomfortable and disrespected by informal behavior. Given the fact that the Indian culture is oriented towards traditions and norms, it is recommended that foreign business partners, employers, and employees use a formal behavior at work.

Indians value and manage time in a different manner than Americans do. They take a lot of time getting to know their business partners and co-workers. They do not value meeting deadlines and schedules as other people do. They require significant amounts of time in building trust in their business partners (Stylusinc, 2004).

In the Indian workplace the work of the employees is monitored by supervisors that must assist and advice subordinates. However, certain Indian companies have developed and implemented modern control techniques. There are also numerous rules about working in groups. For example, in the case… READ MORE

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