Outsourcing

Legos have come along way from when they first started and they keep growing as they makenew sets and make the things you can create even more realistic. ‘LEGO’ is an abbreviation ofthe two danish words “leg godt”, meaning “play well” which is their name and their ideal.

Thelego group was founded in 1932 and has been passed down from father to son and is now ownedby Kjeld Kirk Kristiansen, a grandchild of the founder. Lego has come a long way from a smallcarpenter’s shop to a modern, global enterprise which is one of the biggest producers of toys inthe world. The way legos interlock makes them unique and offers loads of possibilities and allyou need is an imagination.

You may be thinking “hey what’s so special about lego all they do ismake blocks”. Not even close lego has came a long way to where they stand today. Lego alsodidn’t start off making these legendary blocks it was just an ordinary wooden duck that was madein a carpentry shop.

By 1951 plastic toys accounted for half of the company’s output, althoughsome people thought that the plastic toys wouldn’t be able to beat traditional wooden toys. Thelego group made a separate operation named “Duplo” and were twice the size as regular bricksand were aimed at young children.

The culture of innovation is that he knows people likebuilding things and when they do it makes them feel good and accomplished and he uses thisthinking to his advantage. Lego also hired creative and diverse people so his whole company isfilled with ideas that are limitless.

The lego company is a family owned business and itsheadquarters are located in Billund, Denmark but also has offices and stores all over the world. Ithink that lego went through a horizontal integration just because of the fact that they went froma small shop to now what is one of the most powerful companies in the world.

In 2015 Lego waslabeled as the most powerful company in the world stolen from ferrari which held it for 2 years.The thing that really pushed lego up to the top was the “Lego Movie” which helped with a lot of1global recognition. Legos are molded in a thermoplastic polymer, acrylonitrile butadiene styrene,legos are known for their durability.

Legos are more precisely made than and iphone and that’swhat it takes to make a full-scale version of the X-Wing Starfighter or a 16-inch replica of theTaj Mahal. Legos are more popular today than they have ever been which is a surprise to some atthe company, since roughly a decade ago it was nearly bankrupt.

People now can use the powerof the internet to create their own designs and go to the lego store to buy all the parts they needto create it. Lots of legos today also have flashing lights or battery powered motors so they candrive around by themselves. Lego is always coming up with new ideas on how to make theiramazing creation into a better version for every generation.

The first big lego factory was outsideDenmark in the swiss alps. The family that owns Lego lives in Denmark which is why most oftheir plants are set up in Europe and Asia. The Danish are known for exporting a lot of things butlegos are definitely one of their most exported. In 2016 alone, over 75 billion of the colorfulplastic bricks were sold.

Ole Kirk died in 1952, just as his son was on the verge of makinginterlocking which would increase creativity and sales in kids. The lego company also suffered alot of hardships along the way of trying to build one of the greatest toys to come to stores. Thesefires didn’t stop much though it just meant that it was time to change some things and this iswhen they decided to change from wood to plastic.

Today that decision means big business andthe LEGO group has built itself into an industry titan. But it would have never happened withoutthose simple bricks – or the fires that nearly destroyed a family’s dreams three times over. LEGOwill most likely always be a lot of fun for the workers and for the kids that get to use them.

LEGOS are going to be a big part of a lot of young kids childhoods and some more grownpeople because legos can be for all ages and thats what makes them so amazing.

Since then, Canon has grown to become one of the oral’s largest electronics manufacturers, while the firm’s camera products continue to enjoy a high profile (Brink, 2012). Fast forwarding to present times Canon has become a leader in the imaging industry. They boast a wide product mix ranging from personal and professional cameras, home and large enterprise printers and copy machines, and sophisticated industrial medical equipment. Canon is celebrating 80 years of business this year at their headquarters In Tokyo, Japan (canon Inc. , 2013).

In the beginning Canon was strictly governed by a Japanese management style. This style relied heavily on collaboration of all parties involved, to produce superior quality products and services, as well as lifetime employment, and tremendous employee benefits. However, more recently Fuji Matrix, president and CEO of Canon has adopted a “fusion of Eastern and Western corporate principles” (Kanji, 2002). The Canon Corporation calls their corporate philosophy ‘Kiosks’, which they define as “All people, regardless of race, religion or culture, harmoniously living and working together into the future”.

The philosophy continues to describe how the company believes they must “foster good relations… Tit their customers and the community’ (Canon Inc. , 2013). The first part of the philosophy implies an emphasis on respect for people, which is a characteristic of Japanese management style. The latter portion of the philosophy demonstrates the Importance of customers to the company a western management principal. Canon has acquired most of It success through creating valuable high quality products. Vertical integration has made it possible for Canon to produce this caliber of products.

Canon is constantly exploring avenues to reinforce in-house production as a means of accumulating know-how and reducing costs. Canon has gone to great measures striving for its products to be solely reliant on in-house production. The in- house production of molds as well as electro photographic and optical key components was a starting point for Canon. Recently, Canon further promoted their in-house production capabilities to include rubber functional components, circuit boards and plastic components.

Another example is the Sukiyaki Office has begun utilizing the in-house production of semiconductor devices, including image sensors for digital SSL cameras. The whole value chain inside Canon Corporation, it is very efficient and effective. It is well Integrated and running smoothly. The entire processes of Canon’s value chain are unique and based on economics of scale, thus By utilizing the in-house production method, Canon can effectively and efficiently vertically integrate its products internally throughout factories as well as externally to the market.

This type of integration creates value to the company as well as to Cannon’s loyal customers. Vertical Integration allows Canon to focus on training the best people, buying and using the best equipment available, and running innovative racketing campaigns and strategies. Canon executives are constantly reviewing the global production network to establish an optimal global production structure. The anticipated growth of the workforce worldwide makes it necessary to establish a high quality, finely tuned production structure that facilitates the effective use of automated production systems to raise productivity (Canon Inc. 2013). The imaging industry has become extremely competitive in the past two decades. Modern technology has “evened the playing field” in every sector of business, especially the ones directly related to technology. In order to stay competitive it is essential for businesses to be innovative and efficient. Canon has been known for being “ahead of the times” with its corporate strategies along with its products. Canon’s strategies have been very effective in balancing growth of market share with profitability. They control a major share of the imaging industry market.

Cannon was able to identify markets in which it intended to compete and developed competitive advantages to allow the firm to balance market share and profitability growth within these markets. In the late asses, Canon adopted a business-level tragic vision of focusing on the small photocopier niche that was undeserved by its major competitors using a technology that was totally different than the existing technologies used by competitors. This vision gave direction for Canon’s strategic planning process allowing Cannon to recognize and exploit opportunities in related markets over the long run.

After realizing success with this strategy Canon began horizontal diversification based on the evolution of its core competencies. Over the long run, the development and application of Cannon’s strategy has made the firm a leader in the imaging industry group. Mullions, 2013) With the drastic changes in technology it will be important for Canon to continually seek new unexplored markets. Furthermore, it will also be important for Canon to maintain its reputation for superior quality products while continuing to produce innovative new technology.

The superior quality of Canon products is directly related to the employees responsible for their assembly. As mentioned above, there is a strong Japanese corporate structure involved throughout every sector at Canon. This structure ensures that employees are compensated generously for their knowledge and skills which in turn gives incentive to continuously produce high quality components. All Canon factories across the world use the cell production system, which eliminates conveyor belt assembly lines in favor of small teams, or “cells,” of workers that handle multiple procedures to complete a product. Canon Inc. , 2013) The system allows workers to change the number of procedures they perform according to skill level while also facilitating adjustments in production output, ultimately helping to eliminate work in process. Awaken, the “improvement”, or “change for the better” is a philosophy that Canon takes extremely seriously. In utilizing the cell most efficient assembly methods through using the Awaken principals. Recently, Canon installed intelligent at several of its production factories.

It is an automated delivery system that enables employees to order necessary parts from an inventory system, and have them delivered in a Just in time fashion during their production process within their cell. This allows them to continuously produce components without having to go in search of the next necessary component to complete their process. As mentioned above, superior quality products have led Canon to their continued Success. Canon enjoys high reputation in the world scope in the imaging industry, claiming stakes in both the high-end market and low-end market.

Canon utilizes its capabilities in technology innovation to continue producing high quality imaging devices. In 2004 Canon was ranked highest in new product development in America (Canon Inc. , 2013). Canon adopts differentiation as well as new product development as its current strategies and relies on its innovative capabilities to gain competitive advantage in the market. Canon has consistently turned in strong performances, which have enabled the company to expand its market share. Canon designs, develops and manufactures its own lenses, image processors, plastic and rubber components, microprocessors and color rendering software.

By keeping these processes in-house it makes it easier to monitor and control quality. Service is another important part to add the extra value to the final products. As one of the biggest players in imaging industry, Canon is focusing more on business- to-business services through the Canon Service Center. (Canon Inc. , 2013) Recently Canon has become extremely involved in being an environmentally friendly company. With this in mind manufacturing at Canon is constantly evolving to e more environmentally sound.

For the procurement of materials, Canon uses the milk-run inventory policy. Supplies are retrieved from vendors/warehouses as they are needed. A truck makes stops at specified locations gathering the necessary materials before returning to the production center. Canon has put fourth extensive effort to manage this process to be as efficient as possible. The routes are strategically planned out so that the trucks are loaded in the most efficient manner. Furthermore, only the parts that are currently necessary are loaded on the trucks in order to reduce wasted time, space and material.

Due to the fact that Canon relies heavily on in house production there is an elaborate computer based inventory ordering system that makes it possible for the Just in time milk run approach to work efficient and effectively. Canon’s in-house production has promoted an abundance of cost-savings along with valuable skill accumulation. Essentially this allows Canon to reduce the range of suppliers and raise the level of standardization. The supply chain, completive advantage, production processes, product quality, and inventory policies would all be null if Canon did not have a strategic planning policy.

Beyond being profitable, creating a friendly work environment for employees and by being environmentally responsible are top priorities for Canon. Like most successful businesses Cannon relied on a SOOT analysis to identify opportunities and threats, and the internal strengths and weaknesses of the firm that would allow Identifying markets that were likely to grow in the future and obtaining a competitive advantage in the market is how Canon has reached its success thus far. It is only obvious that pursuing these opportunities will also be necessary in the future.

Canon has three large business segments- a consumer business unit, an office business unit, and an industry and others business unit. The consumer business unit covers the BBC part such as digital cameras, DSL, lenses for camera and etc. The office business unit covers BIB part such as laser printers, office network multifunction devices, and solution software. The industry & others business unit covers professional industry parts such as LCD lithography systems, ophthalmic equipment and etc (Canon Inc. , 2013). In their Excellent Global Corporation Plan, Canon has a long-term vision for diversification.

Having diversified by moving into such business areas as large-format inject printers, digital production systems, and business solutions, Canon is also working to establish display technologies. Canon is also targeting new business domains in the fields of medical imaging, intelligent robots for automated production, and safety and security. (Canon Inc. , 2013) Several points have been mentioned above explaining Canon’s commitment to producing superior quality goods as efficiently as possible. Lean manufacturing production is a philosophy that aims to systematically eliminate waste.

It is a philosophy and a way of mapping the overall manufacturing process from raw trials to finished goods for customers (Higher & Render, 2011). There are several types of waste that employees of canon aim to reduce through their lean manufacturing processes. They include: inventory, wait times, defective units, effort, transportation, and over-processing. In the past decade Canon has gone to great lengths to transform its production facilities to be lean. Canon is concerned with profitability through efficiency.

But furthermore, they are also concerned with being environmentally responsible as well. Through lean manufacturing and the six sigma principal, Canon is easily able to chive both of these goals. By utilizing the Awaken philosophy employees at Canon are continuously seeking ways to improve processes, which in turn helps reduce waste. The cell production system replaced the conventional conveyor belt production system and has helped Canon take the necessary steps towards being an extremely efficient lean manufacturer of quality electronic products.

The cell production system enables employees to obtain a specialized skill set that over time allows them to be efficient producers of Canon products. Utilizing in-house production methods also allows for a streamlined vertical integration approach where Just-in-time delivery systems increase efficiency throughout all of the manufacturing processes at Canon facilities. The final Awaken principal Canon utilizes is the 5-S Practice. Employees take pride in maintaining a clean, organized and standardized workplace in order to reduce wasted time, space and materials.

In summary, Canon began as a company that was solely devoted to producing the world’s greatest camera. Through time it became apparent that exploring other line and strategically entering favorable markets, Cannon’s innovative imaging products have led the way for them to be market leaders. Exquisite operational management has also helped canon to efficiently produce top quality imaging devices while at the same time being environmentally responsible.

Moon Micro is a small manufacturer of servers in Santa Clara, California. Lately, the demand for servers has increased, and the company needs to find a way to capitalize on the situation. The current plant has reached a capacity of 10,000 units. The two options to capitalize on the situation are to either expand the plant to a capacity of 20,000 units or outsource the process to Molectron, an independent assembler. Expanding the Santa Clara plant would have an annualized fixed cost of $10,000,000 plus $500 labor per server. Hiring Molectron would cost $2000 per server built plus the $8000 for raw materials. Moon Micro sells its servers for $15,000. Given the situation, Moon Micro wants to have projections for the next two years. For both years, the company estimates demand for servers to have an 80% chance of increasing 50% from the previous year, and a 20% chance of staying the same as the year before. On the other hand, Molectron’s prices are fixed for the first year but have a 50% chance of increasing 20% the second year and a 50% chance of staying at the current rate.

With Moon Micro having a two-year time frame, it only makes sense to compare the increases in revenue from year one to year two. This gives the company the ability to analyze the potential gains for every situation possible rather than just following the decision tree and adding year one’s revenue to year two revenue. For example, if scenario one were to occur and the company decided to have Molectron produce the servers, the company would earn $562,500,000. However, in order to properly compare each scenario, year one’s revenue should be subtracted from year two in order to clearly see how the percentages play itself out. Through my analysis, I came up with eight different scenarios that Moon Micro could run into. The first scenario presents Moon Micro with the largest possible profit because the demand is the greatest and the costs are lowest. However, the big negative with the possibility of demand increasing another 50% in the second year to a capacity of 22,500 is that the plan for expanding the plant for 10,000 more units will make capacity 20,000. This would cause 2500 servers to produce an opportunity cost of $37,500,000 by not selecting Molectron to produce the servers.

This scenario makes electing Molectron to produce the servers the better option because there is no limit on capacity. The first and second scenarios are alike but differ because of the increase in price from Molectron in the second scenario. The likelihood that both scenarios occur is 32% (80%*50%*80%). Scenarios three, four, five, and six are alike because they all have an 8% chance of happening (80%*50%*20% in three and four and 20%*50%*80% in five and six). In scenarios three and four, the differences are the costs associated with the expansion of the plant and Molectron raising its prices. In scenarios five and six, the expected revenue of $75,000,000 stems from the difference in revenue being $150,000,000 in year one (10,000*15,000) to $225,000,000 in year two (15,000*15,000). The demand in year one falls under the 20% chance that it stays the same and then in year two it receives a 50% increase. Finally, scenarios seven and eight illustrate demand never picking up, and therefore expanding on the plant would cause the company to suffer a loss of $20,000,000 because of the extra fixed costs in both years (10,000,000 per year).

The probability that these scenarios would happen is 2% (20%*50%*20% in scenario seven and 20%*20%*50% in scenario eight). After evaluating all eight scenarios the clear decision is to outsource the manufacturing of servers to Electron. In every scenario that was broken down and analyzed, outsourcing the work to Moletron resulted in a better net profit. Even with the possibility of prices rising in year two at Molectron, the chances of demand being at its highest and Moon Micro not being able to support demand at its fullest should be the difference-maker because the most likely situation is that demand will be very high. However, there are some factors that should be considered such as whether having Molectron manufacture the servers is a good look on the company, quality of the product that Molectron will be able to deliver, lead time, and the possibility of bad communication between the two companies since communication is an extremely important factor in supply chain management. Lead time could be important because if the demand was too high, for example, Moon Micro could have a huge problem because Molectron might not have the proper staff to keep up and have the servers shipped to Moon Micro to be checked.

There is also the possibility that the residence in Santa Clara becoming unruly because Moon Micro didn’t expand the plant which could’ve led to more jobs in the city. A giant snowball effect could occur. If Moon Micro felt like the best decision was to expand the plant, factors such as property taxes and extra plant maintenance would need to be considered. Tax rates can always rise and that leads to a variable price that could potentially be very volatile for a small manufacturing company. Some positives that could arise from outsourcing the work to Molectron to manufacture the product besides the overall net profit, is that this could free up some space in the plant at Moon Micro and possibly allowing the company to focus on another product if they wanted to do so. If Moon Micro decided to come up with another product they would still be known as a great company that produces servers because they have Molectron focusing solely on manufacturing on servers for them.

Introduction

Contingent workforce is a group of employees or workers recruited in an organization on a non-permanent or contract basis (Ackers & Wilkinson, 2003). These employees are mostly outsourced by an organization as a result of rapid growth within an industry which requires quick responds to changes in an effort of maintaining the competitive advantage that an organization has over its competitors. The changes to be effected may include change of employees. Their importance are in giving of professional or expertise information that is critical in the designing of strategies aimed at fostering the growth and development of an organization that is faced with steep competition (Brooks, 2009). The engagement of an organization ion the recruitment contingent workers may be aimed at the reduction of employee benefits and retirement costs that could otherwise be high. Consequently, the organization reduces the overall costs with the realization of maximized profits and improvement of production efficiency. The contingent workforce comprises temporary-help workers, in-house temporaries and independent contractors, who might be retained by the organization to offer specialized skills or techniques (Cheng-Ping,  2009). 

Discussion

 The management process of the workers may prove difficult and expensive to an organization if proper strategies are not formulated to guide the process (Foot & Hook, 2008). It is thus, important for an organization to employ the strategic approach of contingent workforce management which aims at reduction of the risks associated with contingent employee recruitment and the management costs. The management of contingent workforce may employ the use of either unutarist or pluralist approach depending on the organizational structure. Unitarist approach is a better strategy for an organization whose business operations are on the global basis (Brooks, 2009). This is because of the increase changes in the business environments which require the recruitment of employees on contract basis to aid the organization in the realization of cost-efficiency. This management approach may also be applied to other local industries in order to aid them in gaining their competitive advantage. The use of contingent workforce has been critical in the making of organizational adjustments related to employment levels and costs since these employees may be recruited into the company only when their expertise or labor is needed. In spite of the benefits of employing contingent workforce, an organization is forced to incur high training costs in addition to having its organizational culture and core morale disturbed (Brooks, 2009).

Individualism or unitarism management approach focuses on the employment of a human resource manager (HRM) to oversee the process of recruitment and training of the workforce and in the designing of other managerial policies to act as guide in the pursuit of success (Keith, .2008). This implies that the organizational function of managing contingent workforce is left to the HRM who shapes the structural system in fostering unity between the organization and its employees. This system of management allows direct communication from the HRM to the employees in an effort aimed at achieving the organizational goals. This strategy develops a great organizational culture which focuses on the employee development as well as improved efficiency through increased employee commitment as a means of achieving mutual interest between the organization and its employees. Under this strategy, the organization’s top management is charged with the development and management culture since they are regarded as the founders and major stakeholders (Brooks, 2009). This means that the top management issues directions to guide in the implementation of the business strategies to order to achieve the set goals or objectives. This management strategy becomes handy in the management of contingent workforce since it allows for the communication of the organizational goals and culture to aid in the development of strategies that will foster the achievement of an organizational competitive advantage in a changing environment (Keith, .2008).

The HRM is charged with the duty of recruiting and training the contingent workforce. Since these workers are outsourced by the organization, it is important that they poses the required talents and expertise to foster the development of the right marketing strategies. This is an important aspect of individualism approach since it reduces the management and training costs (Foot & Hook, 2008). This also allows the development of excellent communication network within the organization as the top management receives all the necessary information that guide in the analysis of the environmental conditions within and outside the organization. This information is of importance in decision making, especially in selecting the right professionals or expertise into the firm. Cost-efficiency within an organization is achieved since the management is able to address major issues at an appropriate time (Cheng-Ping,  2009).

Pluralist (collectivism) management approach, on the other hand, is a personnel management strategy which entails the organizational use of personnel managers whose functions will be to adjust the organization to fit its changing environments, ensuring that all stakeholders conform to the organizational and external cultures, employee welfare and in the creation of employee loyalty to the employer (Budd & Gomez, 2004). The personnel managers are charged with the duty of managing a group of workers working under them in a move aimed at improving efficiency within the organization. The provisions in this strategy allows each manager to recruit and organize for train of the contingent workers as a means of fostering the understanding of the organizational culture (Keith, .2008). This strategic approach is aimed at improving the production efficiency and justice to the workforce on matters related to their welfare and working conditions. The underlying reason for this move is to foster the employee individual and collective contributions towards the organizational success. Under this approach, the organizational culture is developed to foster its performance (Cheng-Ping,  2009).

The advantage of the unitarist over the pluralist management approach is the development of HRM policies and practices that guide the recruitment and training of contingent workers to avert cases of conflicting interests (Keith, .2008). In contrast, pluralistic approach presents conflict of interests between the stakeholders and thus hinder the application of this management strategy in the recruitment and training of contingent workforce. The managerial policies are the factors explaining this conflict of interest as they are geared towards long-term development and welfare of workers. Moreover, the changes in the global market which calls for flexibility of organizations in their operations and the employee-loyalty to employer heighten the unsuitability of this managerial approach (Brooks, 2009). Instead, individualism approach is favored as its policies are geared towards capitalization of human resources through the development of talents and the subsequent personal development. This means that the organization is able to avert workforce management risks while utilizing the services of talented individuals in the improvement of its efficiency and thus success. The setting of these policies on employees and work serves as guidelines in the running of business operations on the global sphere (Cheng-Ping,  2009).

The recruitment process will involve the selection of talented employees and experienced employees into the organization on long-term services (Keith, .2008). However, those individuals, who may have specific skills and experience that may be required in the firm for only a short time are employed on short-term basis. This recruit and selection process enables the organization to capitalize on the available workforce in an effort of meeting its missions and goals. The outsourcing of employees will enable the organization to reduce the high cost of training which it could offer to its existing employees in responds to the changes in the market. This happens in cases where the organization is planning a short-term project but which may require the application of some skills which are lacking in the organization. Since the HRM strategy is focused on capitalizing on its employees the organization would minimize its operational costs by outsourcing employees instead of incurring the high costs of training on short-term projects (Cheng-Ping,  2009).

Since the contingent workforce is outsourced based on their expertise and talents, an organizational expenditure on employee training will be greatly reduced (Ackers & Wilkinson, 2003). However, for the organization to utilize contingent workforce it should organize for some training on the specific areas of interest and in communicating the organizational culture and missions to help in guiding employees on the understanding of their job specifications. This will also help the workforce in the development of their careers and thus increased productivity and efficiency at work. The HRM policies on the training and development of employees tend to cultivate a working culture among the employees since their morale is greatly boosted by their realization of personal development (Keith, .2008).

The training of these workers is a strategy aimed at the improvement of production efficiencies and the development of superior goods and services that will enable the organization to control a bigger share of the market by commanding customer loyalty. This will also help in the building of the organizational reputation as workers will access justice as they will receive good remunerations as well as work under excellent conditions. The experience that the contingent workforce will have as a result of their employment in different organizations will foster their development and expertise in their fields. Some employees may however spend much of their careers in an organization without developing their careers as a result of lack of proper training programs. This also means that an organization might fail to recognize the services of some of its employees (Budd & Gomez, 2004).

Conclusion

The employment of contingent workers is of paramount importance to an organization as it fosters the realization of cost-efficiency and improved efficiency. However, this process may prove expensive to the organization because of the high recruitment, training and management costs. The adoption of proper management strategy, especially the unitarist approach, by an organization will improve the utilization employees with the realization of low labor costs. Challenges arising from the short-term recruitment of employees include company instability and employee dissatisfaction which may be viewed from justice angle. This is a situation where an employee fails to appreciate the organizational and HRM policies and thus reduce their production efficiency.

References

1. Ackers, P. & Wilkinson, A. (2003). Understanding Work and Employment: Industrial     Relations in Transition. Oxford [u.a.]: Oxford Univ. Press, pp. 209-213.
2. Brooks, I. (2009). Organisational Behaviour: Individuals, Groups and Organisation. 4th ed. New York: Prentice Hall, 99-100.
3. Budd, J. & Gomez, R. (2004). Why a Balance is Best: The Pluralist Industrial Relations  Paradigm of Balancing Competing Interests. Industrial Relations Research        Association. Retrieved from: http://www.legacy      irc.csom.umn.edu/faculty/jbudd/research/buddgomezmeltz.pdf
4. Cheng-Ping, C. (2009). Individual Characteristics, Organizational Justice and Job          Attitudes of Employees under Non-standard Work Arrangements: Study of  Employees of International Tourist Hotels. International Journal of Management.        Vol. 26(2).
5. Foot, M. & Hook, C. (2008). Introducing Human Resource Management. 5th ed. Harlow,           England; New York: Prentice Hall/Financial Times, pp 133-35.
6. Gary, D. (2008). Human Resource Management. 10th ed. . Harlow,           England: Prentice       Hall, pp 577-586.
7. Keith, A. (2008). Managing Human Resources: contemporary perspectives in New         Zealand.3rd ed. Australia: McGraw-Hill, pp234-241.

1.0 Purpose

East-west Communication is pleased to develop a business plan for starting a small sized international call centre in Haryana, India in partnership with Mr. Ashish Singla, CEO of Austratel Infocom who is already running a Telecommunication service from Australia for two years. This will be intensively based on the process of Mortgage refinancing for the customers in North America. Though, outsourcing is  profoundly researched area of business, there is a lot more to be discovered in Mortgage Outsourcing to develop better strategies.

Having duly examined the industry, I am confident that proposed services will effectively address the needs of Mortgage Outsourcing and Refinancing.

The resultant business plan will:

1.      Attract more potential customers and develop a process for retaining them.

2.      Work out the various conditions of providing loans along with the eligibility required for providing loans against mortgage property.

3.      Determine the appropriate kinds of mortgages to be used on the stages of businesses in such a way that better service can be provided by the potential clients to its customers.

4.      Make comprehensive reports pertaining to several kinds of loans and mortgages in accordance to the detailed needs of the customer.

5.      Develop a procedure of finding clients directly, rather than using indirect sources.

This study seeks to posit the process of Mortgage Outsourcing in relation to a wider innovation process and to investigate the growth of the phenomenon within a system’s framework.

Exploratory design for mixed method research will be of great use for this project. The purpose of the sequential method in the business proposal is to study the Mortgage outsourcing industry and its refinancing issues. The first phase of the study will be a qualitative exploration of issues concerning the industry such as employee attrition, customer demands, and organizational structure. Qualitative and quantitative data will be collected from the HR managers and team leaders of various established call centers in India through electronic survey.

The second phase, on the other hand, will be a quantitative process use to follow up on and reinforce the qualitative phase. The development of better marketing strategies and personnel plan with the inclusion of knowing the competition and the organization structure can be achieved with the use of quantitative process based on the qualitative data gathered.

2.0 Background

Call center industry is one of the fastest growing industries to this date. It is also known as the Business Process Outsourcing industry. It is mainly compose of the three entities of joint ventures, outsourcing and the virtual outsourcing. As an industry, it primarily delegates one or more of its intensive processes to an external provider which is given the task to own, administer and manage the selected process base on a performance criteria that can be defined and measured. The fast evolution of the call center industry is attributed to its factor cost advantage, economy of scale, business risk mitigation, superior competency and improvement. The world of a call center industry is revolving around telemarketing, customer support, knowledge process, and help-desk. Such processes are prevalent in any types of outsourcing business that are flourishing today especially in third world countries like India. However, there are still many reasons to tell why call center flourish.

Due to the growing interest rate and unstable property prices, mortgage lenders are now experiencing difficult time. Added to this is the fact that homeowners are having problems in paying their dues which causes the mortgage lenders to find maintaining the business hard. It is by this reason that outsourcing of business has been the solution to the problem.

(8)It is said that the mortgage and refinancing boom brought about by the low interest rates has resulted to the increasing number of mortgage loans. According to the Mortgage Bankers Association of America, a total of $3.2 trillion worth of originations was recorded in the year 2003 alone. However, in 2004 high pressures on the cost structures for mortgage lenders were recorded and the rising of the interest rate was to be blame for such phenomenon. The only solution appropriate to the situation is the process of outsourcing which could greatly reduce costs by 15% to 30%.

Financial Institutions today face the challenges of managing mortgage market volatility, while continually investing in system upgrades and staff training. To alleviate these risks private mortgage outsourcing provides services that are more cost-efficient than what can be achieved through internal operational changes.

On the other hand, in India, the system of outsourcing is facing a great amount of inconvenience brought about by having no direct contact with the clients. Call centers that are either small or medium in size are losing enough percentage of profits because they are trying to counter the inconvenience by having direct transactions or dealing with the clients. The costs of which are difficult to bear among the small and medium sized call centers.

Outsourcing is a valuable tool for helping companies to survive the downturn in the mortgage industry. To remain competitive in the mortgage business,  companies and private mortgage brokers in North America has to reduce infrastructure and costs, while eliminating the paperwork and complexities of mortgage origination. (8)A recent survey also revealed that 42 % of senior mortgage executives realized the value of offshore outsourcing as an important means for dropping costs and improving process competence. Consequently, locating such clients will provide good opportunity to do outsourcing for them.

There are several essential steps being considered in doing outsourcing. However, the three main steps of outsourcing are as follows: (TextbookDoing Business in India for DummiesWiley Publishing, IncAuthor: Ranjini ManianP 93)

1.      Location: Business locations in India are usually characterized into two parts such as SEZ (special economic zone) and EOU (export oriented units). Will prefer a BPO unit in a city with easy accessibility of expertise and infrastructure. I am planning to open or lease a small dissection of technology Park in the Industrial area of Panchkula, Haryana. This is place where in the 10 km radius; I can find right caliber and have the benefit of bearing lower expenses for transport (arranging cabs for employees). (9)

2.      The Process Being Outsourced: Outsourcing strategy depends upon the kind of process being outsourced. Like in “Help-desk”, the transition can be accomplished within four-to-six weeks. Therefore, some specific processes in Mortgage Outsourcing are to be finished as: (http://www.motifinc.com/business_process_mapping.htm)

·         Understanding Business Process: 2 weeks

·         Quantifying and Evaluating the Opportunity :4 weeks

·         Establishing contracts for long term relationships: 2 weeks

·         Transition planning and Pilot Execution: 4-8 Weeks

·         Performance Management : Ongoing

3. Outlook for Mortgage Business Process Outsourcing is consists of:

·         Loan Sourcing

·         Private Label Lending

·         Secondary Marketing Risk Management

·         Sub servicing

3.0 Scope
Call centres in India provided an opportunity to cut costs and reinforce customers’ service and retention. In the United States, however, revealed that the telephone-based customer service is known for its poor quality. The main reason for this is the fact that many companies are not wiling to pay much for their skilled workers working on unskilled positions. Hence, the rate of attrition is high as there are no workers willing to stay for a low paid job and would want to find better paid opportunities. This project will be base on conducting primary and secondary research on Mortgage and others affiliated call centres in India. Reports on various issues and prospectus linked with the industry will also be made with the inclusion of developing a profitable business plan for Mortgage Refinance Outsourcing.

The following deliverables and limitations will be considered in the development of this business plan:

Limitations (www.fcci.com/media-room/speeches-presentations/2004/nov/tax-DINESH-KANA-BAR.PPT)

Uncertainty of Indian Tax exposure to Foreign Principal
Upcoming BPO services stations such as China, Philippines, Malaysia, and Ireland which would restrict me to find future clients due to the availability of more cost-effective labor and language skills.
High employee turnover perceived negatively.
Market Research indicates that no mortgage lender to date has successfully outsourced more than 7 % of its workforce offshore. This could mean that 7% to 10% is the offshore outsourcing ceiling for mortgage banks at the moment and is unlikely to change in the near future. (7)
Economies of Scale. Due to small scale operations at first, productivity as output will be lesser than cost as input.
According to an informal research conducted, some constraints in BPO industry that might be faced while developing an efficient business plan are as follow:

·        A shortage of skills.

This is true at certain levels, particularly the middle management and senior management leadership levels.

Communication Problem

For any firm, delegating customer relationship to an external firm is viewed by many as shirking the responsibility for good customer service. Cultural and language differences mean that customers find it more difficult, indeed frustrating to communicate their issues to the third party. Customers find it frustrating to have to repeat them, or find it often impossible to communicate a particular query or concept to someone who truly doesn’t know or understand the nature of the business. Generally, agents have no real understanding of the products or services of their partner businesses. Often, person on the other end of the telephone might be facing complexity on an inflexible script, with inadequate training and infrastructure to deal with the needs of the caller. So, I will be very careful while hiring and training my staff.

Cost Risks (http://findarticles.com/p/articles/mi_m0NTN/is_60/ai_n6246670)

Cost and margins pressures from all sides are greater than ever. The traditional process improvement and efficiency solutions have reached their peaks and do not seem to deliver sizable improvements anymore. To run BPOs in India, new vision and execution are required to improve profitability in the global economy. Some of the sources says that end of Globalization is very close now. One of the reasons is mentioned above in terms of margins and costs.

 But main drawback of outsourcing businesses is reduced profits because of no direct contact with clients, though the middleman does nothing but collects commission. Profits will be more than double, if the middleman (like dealers in Telecommunication outsourcing) is eliminated. Therefore, a review of the regular call center business plans is required to make mortgage lenders and other businesses aware of the fact that outsourcing is better than insourcing. So, all issues and prospectus of the industry need to be surveyed. Project is motivated to review the bottlenecks of some parts of the industry and work flow.

Deliverables (3) (http://www.crmbuyer.com/story/60098.html)

A decision support document regarding schedules for shifting work, offshore recruiting strategy, training strategy, quality assurance and quality control procedures as a part of quantitative analysis of market.
Data security policies as risk of Data theft in a call center is always there.
Preparing a summary of offshore needs for office space, infrastructure, staffing and skill levels, telecommunication system, personal training and support needs.
Cash Flow projections (Budgetary evaluations and adjustments).
Action plan for the future (5 years down the line). What-if analysis.
Details of the cost involved, and if those costs will change in case business performs well or poorly, and the minimum sales required to recover my cost.
Contractual agreement which finalizes the documentation and final pricing structure with the client or participants.
Three significant dates i.e. contract signature date, effective date and service commencement date.
Financial Projections including cash flow in the start and expected after 12-18 months of steady work.

4.0 Proposed Methodology
·        Survey questionnaire

Use of resources such as the library, manuals, newspaper, and internet to keep myself updated.
Quantitative, qualitative and mixed method approaches to collect the data.
In person meeting with at least 3 managers of existing call centers.
Matrix methods such as conceptual matrix measuring the flexibility of graph between time and money as they two most important factors of any project.
Doing the SWOT analysis of project and various small events associated with it.
Porter’s five forces methodology will also be used here so as to compare various important factors of the projects.
Evaluate the checklist and analyze how the needs of my clients are going to be met by applying the Five C’s such as the capacity, capital. Collateral, conditions and character of the desired potential clients and the Five P’s terminology known as the product, place, price, packaging and promotion being used by the clients.
Here are some steps, which would be taken while researching the industry and are necessary to consider before I set my plan into action. (http://www.ehow.com/how_2053610_start-call-center-business.html)

Step 1: To study the call center industry, I will be making use of internet, libraries and some of the 3 useful persons working at managerial posts in various call centers of India. I would visit India frequently to collect the useful information.

Step 2: Would examine how Mortgage outsourcing is different from other types. This would involve researching various issues in Mortgage Outsourcing than any other type of processes like telemarketing or customer support.

Step 3:  Determine various permits and licenses required to run the business fruitfully in India. http;//ipindia.nic.in/.will is a useful source to know more about patent protection in India.  I will be making use of relevant links to approach the authorities regularly.

Step 4:  Determining the prices of equipments and internet, telephone leased line is a very important step before representatives’ start taking calls in a call center. Information will be gathered pertaining to the comparison of the prices of different equipments automatically, consequently helping me to decide with ease. As my entrepreneur in India has already rented such equipments from somewhere to run his existing call center, which would help to compare prices for new equipments. For leased line, some companies like Bharti Telecom, Reliance Infocomm, BSNL (Government Entity) can be considered as remarkable because of their established names in the industry. Their performance and charges also varies according to various states. I will be figuring out which is more reliable at my preferred location.

Steps for Plan

Step 1: Define strategy and the methods that would be applied to measure productivity, quality, and customer and employee satisfaction. Certain management tools like Five C’s and Five P’s, Porter’s fiver forces, Matrix methods such as conceptual matrix measuring the flexibility of graph between time and money as they are two most important factors of any project, SWOT Analysis can be helpful in defining the company strategies.

VIsiting website of renowned international call centers like Convergys, GE, V-Customer, Accenture, and will give information on how to deal with their employees and customers, normal strategies which help them to be competitive in the market.

Step 2: Develop a business plan outlining business goals, financial needs, logistics and staffing plan.

All questionnaires are enclosed with the proposal.

Step 3: Create a budget to inquire various expenses incurred in the process of completing the project.

Step 4: Selecting the location. This decision can make the difference between a top performing company and one that does not survive..

A Special Economic Zone (SEZ) is an area in India that’s been designed to provide a globally competitive, duty free, cost effective environment to export-oriented businesses such as manufacturing, trade and services. A commissioner is responsible to deal with business locations issues. Therefore, some formal meetings would be required to discuss a good location which has no legal issues or disputes.

Some other methodologies used in this study are:

Monitoring Progress Checking

·         Continuous flow of information from key team members to monitor the progress of plan will be required.

·         Queuing Models will be used to provide qualitative insights, by identifying the circumstances under which economies of scale prevail, namely that a single large call centre is more effective at answering calls than several (distributed smaller ones, or that cross-selling is beneficial, or that a call centre should be quality-driven or efficiency driven or most likely, both Quality And Efficiency Driven (QED). This method will also be used for planning and operating skills-based-routing of calls within a call centre, which entails the analyses of systems with multi-type customers and multi-skilled agents.

·         Mathematical models will be used for operations research in order to consider a wide range of optimization problems.

Aside from using the methods mentioned, it will be guarantee that the East and West Communication will conduct its business honestly and ethically. This is in line with a principle that every company is supposed to create a reputation based on honesty, fairness, respect, responsibility, integrity, trust and sound business judgment. No illegal or unethical conduct on the part of directors, management, employees or affiliates is in the company’s best interest.

5.0 Work Schedule
The work schedule of the project is attached as Annex A to the proposal. The start date occurs when the proposal was started and end date will be when final project report will be accomplished. Due to the large period (Feb- Sep) the work sheet couldn’t be captured.

The time schedule of this project will vary in relation to the time frame of the author’s visits in India. It is the hope of the author to have the business plan finally drafted before the end of September depending on the requirement of any new clients who may come over after advertisement and promotion. To elucidate, the work schedule will depend on the following factors:

Visits to India
New Clients
Budget changes
Technology changes
Competition
6.0 Tentative table of Contents
Please refer to Annex B

7.0 Draft Questionnaire
Four questionnaires have been developed which will be posted electronically during the completion of project as and when required. Annex C is prepared to survey high employee turnover in the industry. This questionnaire is expected to help examine more accurately the various reasons of turnover. Participants of this questionnaire will be the employees from HR department from various call centers in India. There will be an approximate 10 participants from various call centers that will be asked to answer the questionnaire.

Annex D is totally concerned with the process of mortgage. It targets customers from North America who have the following qualifications: male or female; employed and self-employed; do not have sufficient funds but are looking to buy homes; starting age can be 19 and over, maximum age is usually 65.   It is expected that there will be 20 participants who will reply to the questionnaire.

Annex E tackles hiring, training and the basic of organization structure. There are questions to be asked to supervisors and team leaders of call centers, in case they are not available, to HR managers. As mentioned in the proposal, around 60% of call center operation’s cost comes from hiring employees, training and turnover. Hence, this questionnaire is designed to know the various problems companies are facing in the aspects of hiring and development.

Annex A to Call Centre Proposal

 Annexure B: Tentative Table of Contents

Introduction

Business Description
Business Formation
Directors
Management Team
Business Goals/Mission
Business Philosophies/Identity
Geographical markets
Vision of the future

Executive Summary

Main Objective
Sales Summary
Strategic Positioning
Licenses
Key Advantage
Funds Required
Marketing

The product Mix
Sales Estimates
Analysis Current Product Mix
Competitive Research
Market Analysis
Market Goals and Strategies
Pricing Policy
Advertisement and Promotion
Sales Management
Distribution and service
SWOT analysis
Historic Analysis

General View
The Market Position
Income Statement Historic
Balance Sheet Historic
The Organizational Structure

·         Management Personnel

·         Administrative Organization

·         Contingency Planning

Call Centre Operations

Call centre identity
Call centre location
Call Centre Premises
Call Centre Layout
Financial Plan

The investment Budget
Statistical Data
The return on Investment
Financial Problems
Risk management

Risk Reduction
Exit Strategy
(http://planmagic.com/business_plan/call_center_business_plan.html)

Annexure C to Call Centre Proposal
Employee Retention Survey questionnaire (http://www.customergroup.com/cms-survey.htm)

So that my business face least no. of such problems , a questionnaire is being designed to collect the qualitative and quantitative data specifying  various issues involved in Employee Retention program  of a Call Centre:

Questions to Management

What is the annual turnover percentage within the contact center(s) (excluding internal promotions and terminations):
A)    > 10%

B)    10-25%

C)    25-50%

D)    50-75%

E)     75-100%

F)     >100%

If you have multiple contact centers, what is the turnover across centers?
(Instructor comment: What if not? Reply: This question is just to compare turnover between different branches. Your question probably indicates “what would be the turnover if you have only one contact center”. Question no. 1 solves the same purpose)

A)    Lowest Center ______%

B)    Highest Center________%

Do you conduct formal exit interviews with departing CSRs?
A)    Yes

B)    No

C)    No, but planned

Indicate the reason for departure of CSRs in order of importance from highest to lowest.
A)    Better Compensation

B)    Unclear Job Expectations

C)    Better Benefits

D)    Poor Supervision

E)     Location/ Convenience

4a.If other, please specify________________________________.

Do you offer incentive/performance based compensation (i.e. Bonuses for Quality, Attendance, Sales, and Customer Satisfaction)?
A)    Yes

B)    No

C)    No, But planned

5a. If so, please describe the basis (Quality, Attendance, Productivity, Other)

Options
Scale
1. Quality
1
2
3
4
5
2. Attendance
1
2
3
4
5
3. Productivity
1
2
3
4
5
4. Customer Satisfaction
1
2
3
4
5

What is the average number of performance reviews conducted annually per CSR?
A)    Formal ________

B)    Informal________

How many contact centers in your area are engaged in competition for talent?
____________________

8.      Indicate your level of agreement using a scale to each of the following practices which may contribute to employee satisfaction and favorably impact employee retentionL(http://www.montrosetravel.com/key_elements.html)

Questions
Scale
1. Sense Of Purpose
1
2
3
4
5
2. Fair Compensation.
1
2
3
4
5
3. A feeling of appreciation.
1
2
3
4
5
4. A feeling of participation in the way their jobs are done.

1
2
3
4
5
5. A management style that incorporates coaching, encouraging and empowering.
1
2
3
4
5

What is the degree of Top Management (Director and above) interaction with the front-line?
A)    Low (once or twice per year)

B)    Medium( monthly)

C)    High(weekly)

Indicate the reason for termination of employees.
Reasons
Scale
1. Attendance
1
2
3
4
5
2. Fraud
1
2
3
4
5
3. Attitude.
1
2
3
4
5
4. Performance.
1
2
3
4
5
5. Other
1
2
3
4
5

10a. If other please specify_____________

Annex D to Call Centre Proposal

Questionnaire to a Mortgage Lender

1. Over the course of a day how much of your time is dedicated to:

·         Preparing mortgage documents.

·         Pro-actively contacting potential new clients.

·         Meeting mortgage clients for initial presentation of proposal.

·         Finding the best rate and mortgage type for potential clients.

·         Closing the deal.

 2. What would be an appropriate amount of time (daily) to dedicate?

·         Preparing mortgage documents.

·         Pro-actively contacting potential new clients.

·         Meeting mortgage clients for initial presentation of proposal.

·         Finding the best rate and mortgage type for potential clients.

·         Closing the deal.

3. Do you get ample of time throughout the day to accomplish everything needed during normal work hours?

·         Yes

·         No

4. Do you feel comfortable and knowledgeable about all products and services available in the marketplace today?

·         Yes

·                                 No

5. What would be the ideal time frame to complete a deal from start to finish?

·                                             24 hours

·         48 hours

·         3-4 days

·                                             1 Week

6.      Indicate your level of agreement using a scale to each of the following:

Scale
Opinion
1.
Somewhat agree
2.
Agree
3.
Somewhat Disagree
4.
Disagree
5.
No Opinion

Questions
Scale
1. I feel comfortable with my professional situation.
1
2
3
4
5
2. I have all the resources necessary to fulfill my client’s needs.
1
2
3
4
5
3. I am able to receive approvals in a timely manner.
1
2
3
4
5
4. My clients feel that I am knowledgeable.
1
2
3
4
5

[T1]

Annex D to Call Centre Proposal
Questionnaire for a Mortgage Customer

1. As a client indicate using the scale of what you look for in a mortgage broker:

Options
Scale
1.Professionalism
1
2
3
4
5
2. Knowledgeable about various products in the market.
1
2
3
4
5
3. Prompt service.
1
2
3
4
5
4. Preparing a proposal that is easy to understand.
1
2
3
4
5
5. Finding the best product.
1
2
3
4
5

2. Using the scale, indicate your level of agreement with the following statement:

Questions
Scale
1. I want the best service provider.
1
2
3
4
5
2. I want to develop a professional relationship with my Mortgage broker.
1
2
3
4
5
3. I am only interested in obtaining the best rate.
1
2
3
4
5
4. Obtaining a pre-approval is important so that I Know what market I can afford.
1
2
3
4
5
5. My Broker should be professional and knowledgeable about what is the market.
1
2
3
4
5

3.      Indicate your level of agreement with the following :

Questions
Scale
1. My Broker should always be looking for my best interest.
1
2
3
4
5
2. My broker should have knowledge about various ways of investing using property as collateral.
1
2
3
4
5
3. My broker should always be upfront about fees he charges.
1
2
3
4
5
4. My broker should know about tax saving plans.
1
2
3
4
5

4. How do you like a Mortgage lender to stay in contact with you?

1.      Email

2.      Phone

3.      Fax

4.      Mail

5.      Cell Phone

5. Do you need flexibility so that you can vary your repayments?

1.      Yes

2.      No

6.  Do you have any plans for major expenses in the next 12 months?

1.      New Cars

2.      Home Improvements

3.      Health

4.      Rental properties

6a. If, others please specify__________

7. Please check the following if they are priorities as it relates to your mortgage refinancing.

·         Determine maximum purchase price/ or loan I can qualify for

·        Determine purchase price and loan amount appropriate for my income and lifestly.

·         Obtain a targeted monthly mortgage payment amount____$

·         Maximize tax benefits

·         Others_________

8. What are the biggest challenges you face with respect to money?

·                     Need to save more money___

·         Too much spending___

·         Need to make more money___

·         Too much credit card debt___

·         I pay too much tax___

·         Other_______

9. What do you need Refinancing?

                    1. Consolidate debt

        2. Home Renovations

                    3. To buy luxury item

        4. Purchased second home

        5. Others____

10. How would you know the best mortgage broker in the neighbor?

1.      Internet

2.      Popular brand

3.      Newspaper

4.      Friends

5.      Others______

http://www.gocrescent.com/images/mortgageplanner.pdf

http://www.blue-chipmortgages.co.uk/Downloads/Mortgage%20Questionnaire.pdf

Annex E Call Centre Proposal
Questionnaire (Hiring and Development) (10)

Q1. Do you use standardized assessments to hire customer’s representatives?

·               Yes

·               No

       Q2. What is your average cost per hire for a customer representative?

·               Less than $300

·               $300-$500

·               $500-$700

·               More than $750

·               Don’t know

Q3. How many weeks of initial training do new customer representative receive in their first year on the job?

·                     Less than one

·                     One n to two

·                     Three to four

·                     More than four

Q4. How many days of formal training does each customer representative receive in a typical year?

·   Less than 5

·               6-10

·               11-15

·               More than 15

·               Don’t know

Q5. What is the starting pay for Customer Representatives?

Less than $8 per hour
$8 to $12 per hour
$13 to $20 per hour
More than $20 per hour

Q6. What is the average pay for supervisors of customer’s representatives who are on the job at least two years?

Less than $15 per hour
$15 to $12 per hour
$21 to $30 per hour
More than $30 per hour

 (http://www.appliedskills.com/files/Call_Center_Survey_Report.pdf)

Q7.  Are your customer representative measured on average talk time?

·      Yes

·      No

Q8. Are your customer representatives measured on average speed of answer?

(Instructor comment: How do you measure speed here? Reply: This is a closed ended question, so how would I measure the speed, should not matter to the respondent. Software to be used in call center operations do calculate the speed (time required for customers to wait in queue to talk to CSR) automatically to check the call durations).

Yes
·       No

Q9. Do supervisors monitor customer representative calls every week?

Yes
No

Q10. Is skill-based routing used in your call center?

·      Yes

No
Don’t Know

Thanks for your cooperation and being patient.

References
1) http://www.bpoindia.org/research/bpo-in-india.shtml

2) www.ficci.com/media-room/speeches-presentations/2004/nov/tax-DINESH-KANA-BAR.ppt

3) http://www.crmbuyer.com/story/60098.html

4) http://www.customergroup.com/cms-survey.htm

5) http://www.motifinc.com/mortgage_services.asp?gclid=COmr0O_og5ICFREwiQodUF7U4Q.

6) http://en.wikipedia.org/wiki/Call_centre

7) http://goliath.ecnext.com/coms2/gi_0199-6409289/The-limits-of-offshore-       outsourcing.html

8) http://www.hrotoday.com/Magazine.asp?artID=1081.

9) http://www.sezindiainvest.com/Export_Procedure.htm

10) http://www.appliedskills.com/files/Call_Center_Survey_Report.pdf

11) http://www.allbusiness.com/marketing_advertising/3582529-1.html

12) (TextbookDoing Business in India for DummiesWiley Publishing, IncAuthor: Ranjini        ManianP 93)

13) http://planmagic.com/business_plan/call_center_business_plan.html

[T1]This may be obsolete.

It is a good practice to have a good hygiene. Though centers would usually have maintenance, prevention is still better than cure. Working in a call center would usually affect the social life of an agent as well due to the drastic change of schedule, and that may arise to conflicts in work and performance as well. Global, formerly known as veldt Events Inc. The headquarters of the company is in Magmata City operating in 30 locations. Their areas served are North America, Europe, and Asia-Pacific. Currently this year, Sip Global has been held as the “Best

Employer of the Year” in the International CIT Awards. Working in a call center has always had its draw backs for the past century, when BOP (Business Process Outsourcing) was being catered by business firms from other countries. And here in the Philippines, we usually encounter business men from the west countries due to the differences in “Labor Cost” compared to their country. That is why people from SIP Global would have a sense of opportunity since they are working locally but for a company that is outside of the country.

Business trips are sometimes given by clients to the managerial team of the LOB or Line of Business. In any call center company, SIP Global had some fare share of experience when it comes to labor management since the company has run for over 34 years running. And we can note that there are main problems that Sip Global encounters. Some common problems within a call center industry would be Agent Absenteeism which directly is affected by work schedules that are sometimes forced by the management that is in contrary to the agent’s liking. Another would be Staff Attrition.

Since by default, agents know that there are a lot of call centers out there, they would find the one that suits to them. One factor is the schedule which the agent prefers, if it is for a day schedule or going to work at night shift for the Hazard/ Night differential pay. These 2 notable habits of a usual agent are directly affected by work schedule, thus would always result on the same ending. This study will determine the effects of work schedule to the work performance and health conditions of a call center worker or agent at SIP Global.

Specifically, it tends to respond to the following queries: 1. What is the demographic profile of the respondents in terms of: 1. 1 Age 1. 2 Gender 1. 3 Marital status 1. Education 2. The concerns that you encounter due to your schedule: 2. 1 Social life 2. 2 Family 2. 3 school 2. 4 Curricular activities OBJECTIVE OF THE STUDY The study has the following objectives to attain the thesis entitled “The effects of work schedule to the work performance and health conditions of a call center worker or agent at SIP Global” to find out how work schedules affect an employee in SIP Global.

These are the following objectives that the researchers would like to attain: To determine the demographic profile of the respondents in terms of age, gender, marital status and educational background To determine the effects of work schedule to the work performance and health conditions that may affect social life, family, school and other curricular activities. To determine what other alternatives can the agents do to avoid the effects on their health and work performance with a difficult schedule.

Traditionally, absenteeism has been viewed as an indicator of poor individual performance, as well as a breach of an implicit contract between employee and employer; it was seen as a management problem, and framed in economic or quasi- economic terms. Attrition – are reduction in the number of employees or participants that occurs hen people leave because they resign, retire, etc. , and are not replaced. Labor Cost – is a part of wage-bill or payroll that can be specifically and consistently assigned to or associated with the manufacture of a product, a particular work order, or provision of a service.

Firms – are typically associated with business organizations that practice law, but the term can be used for a wide variety or business operation units. Habit – is a routine of behavior that is repeated regularly and tends to occur unconsciously. – Business process outsourcing is a subset of outsourcing that involves he contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service provider. LOB – Line of Business is a general term which often refers to a set of one or more highly related products which service a particular customer transaction or business need.

Introduction This portion of the study presented various write-ups, articles, studies, reports and related literatures, both foreign and local about cultural preservation and other issues and concerns brought by agents local and international. Foreign Literature According to Kennedy (201 1), productivity is the efficient creation of goods and services. Productivity is a product of various factors; it can be the workplace such as lightning, ventilation and sanitation.

If they are not favorable, they reduced productivity. Employees are the most important productive resources of the organization. If they are trained and treated properly, they are capable of attaining peak performance. For this reason, progressive business enterprises never stop developing their employees through education and training, whatever financial needs their employees have, they get their companies assistant. Capron’ (201 1), stated that all human beings must deal with the passing of time.

Different cultures emphasize a different ways of understanding and managing time, including whether time is viewed as a scarce resource to be saved and spent wisely or a series of moments to savor; whether people should manage their time by doing one thing at a time or many things at once; whether the people should focus primarily on the past, present, or future. These assumptions have implications for day to day time management and coordination, as well as for strategic planning. According to Heaven et al. (2010) work may be stressful when we feel that we do tot have enough time to complete the work.

We may wish to find a better way to manage our time. This could include a number of things, such as proportioning tasks and developing plans to achieve goals. As donated by Levity et al. (2010) managing time effectively is one of the keys to become an efficient worker. Follow these time management tips to increase your productivity: be on time; determine your priorities & plan your work around them; use time management tools; develop your good time management habits; keep your work area well-organized; expect that adjusting to your new Job take some time

This essay basically refers to the ethical considerations that organizations need to take into account while performing in any economy whether it is domestic or international. The reason why this essay holds great importance with respect to the corporate is the fact that while following their main goal that is profit maximization; these organizations forget that there is a social cost that the society is incurring on their behalf always while they are operating. All these organizations should be the ones who should bare this cost, but unfortunately it is the society that has to pay for it, may be not in the form of monitory terms, but in the form other social threats such as public health or pollution.

Although many organizations have realized this fact and have a special department for their corporate social responsibility, however, having said so, we have other examples as well of organizations which outsource their specific operations in offshore economies where they find cost minimization or lesser legal requirements for ethical considerations. On the face of the home market or other markets, these organizations do claim that they are actually performing according to the legal ethical organizational framework, however, in reality they are actually paying someone else to do that job for them.

Therefore, the main focus of this essay would be to discuss whether offshore outsourcing is ethical or not and whether it is always wrong or always right. However, first of all we will start the discussion with a brief insight into what actually is the ethical framework for organizations which they must follow in order to be called ethical.

In order to start with what actually is ethical behavior, an assumption or a golden rule is to be kept forward that everything that causes harm to others or that causes discomfort for others is unethical. Thus in order to be ethical we should assume this responsibility on ourselves that we do not have any right to make un safe conditions for others or involve in an activity which might cause discomfort for them. It is not all about what we think is good or bad for our selves, but we should understand that when we are living or operating in a society we are connected with a network of people who are directly or indirectly connected with our actions.

For example, if we are having a late night party in our neighborhood on someone specials birthday, it might be unethical because of the fact that the loud music and noise might cause discomfort for the neighbors who are actually connected to us. Although, it might seem to be o with us as we are making noise in our own place and we have the right to do whatever we want, but, we do not have any right to cause others discomfort due to our actions.

Now this is a very simple approach to look at things but, it is not only limited to the individuals living in a society and their actions, but all the organizations that operate in a society are also bound to follow this very framework of ethics and should guard the rights, safety and comfort of not only their own stakeholders, but, the entire economy and society which is actually a stake holder in terms of effectees of their operations.

Many organizations which have made corporate social responsibility centers in their operations are only focusing on the environmental considerations and responsibilities towards the society, however they should understand that being ethical is not just about taking care of the wastes and pollution, but taking care of rights and comfort is a much larger responsibility.

According to the framework of ethical behavior, we see that defining ethical attitude is much easier to define by actually pointing out what it is not. For example, ethics is not about religion only, it is not about following the law only, it is not about submitting to the scientific advancements only, but it is about everything.

Whatever is wrong is wrong, regardless of religion, societies and laws. This statement is important because of the fact organizations tend to seek comfort in societies where they find relaxed laws, different religions and different social laws, but does that makes their operations ethical? No certainly not, although they might not be questioned on the unethical activities they are up to, still what is wrong is wrong.

Although there are no set rules for ethical decision-making but if we follow the several approaches of ethical decision-making we can actually make a more calculated ethical decision rather than just a haphazard decision without taking into account any consideration.

Before we discuss the approaches of ethical decision-making, we can first two cases where companies have outsourced their operations to other countries without actually thinking about ethical decision-making.

The first case is related to the manufacturing industry in developing countries that actually outsource labor-intensive operations to other countries in order to save their cost. Also, they outsource manufacturing of certain products that require high legal restrictions in developed countries but have relaxed laws in developing ones, so they find the safer heaven there and get their products made. Many large companies have to face legal requirements for making certain products which might pose environmental, health or even life risks to the environment or the society.

These can be in shape of the security funds that they might have to provide the employees with, the extra wages, special treatment and costly purification plants, and heavy government taxes as well. Thus In orders to overcome all these problems, these manufacturing companies outsource these production lines to companies in other developing countries.

Although, legally these companies are doing the right thing as they are not into any such production in the other offshore country themselves and they are fulfilling all the legal requirements themselves, however, according to ethical considerations, these companies do have to realize this fact that they are exploiting the labor and the society in the off shore developing country just to minimize their costs and just to maintain their ethical standards in their home country.

As we all known that in developing countries all these social laws are very lenient and it is easy for them to produce such goods, thus on behalf of the parent company, these organizations actually cause the same harm to their society and pose risks to their own population. On the other hand, people do believe that it generates employment in these developing countries and it helps to raise their standard of living beyond poverty line. Unemployment levels in those countries are at all times high and they are actually looking forward to such projects themselves. However, the question is that are they actually paid on the same proportion as the company is earning profits over their services?

Are they actually provided with the same security considerations that the employees and labor force in the developed countries enjoy? In short, are they actually treated equally? The answers to all these questions are NO. When we look at this situation n the ethical standards, we see that discriminating between people is also unethical because every human has the same level of rights and no one is better off or worse off from someone else.

Now in the next case, we see how companies are being unethical to their own employees and workforce just to minimize their costs and maximize profits. Many organizations are closing their own manufacturing, management and other important departments just because of the fact that they find cheaper labor and cheaper fully functional freelance companies in the other countries. Although, these companies do have the right to minimize their costs by doing so, but, what about their own existing employees?

A production manager narrates his own story and shares how he experienced such an off shore outsourcing policy from his previous employer. In his story he tells that his previous employer shut his plant in his country because of high labor costs and higher operational costs and hired another company in a developing country to provide him services.

Although, it is not illegal on the face of the matter, but, what about the employees who are left unemployed, or demoted and transferred to other departments? What about their cost of unemployment on the society? What about the implications of these downsizing on their lives? What about the overall rate of unemployment that these shut offs cause the entire economy?

The answers to all the above is again that there is no one responsible for any such event except the government or the society itself. Thus, in order to ethically decide whether these decisions are actually ethical or not we can take help for the ethical approaches that we talked about in the earlier part of the essay.

The first approach says that when the overall good exceeds the overall harm, and then we can say that an activity is ethical. However, it seems that in both the cases, the total harm is more than the total good that is only for the outsourcing company and its stakeholders. The second approach suggests that rights of all must be protected, but, are these employees compensated for their downsizing, or are the governments of developing countries compensated to the level of harm these companies pose to their physical environment and natural resources?

No thus again they are being unethical while being legal in the eyes of law. The fairness and justice approach suggest that all that are equal shall be treated equally, but, again we see that this is not taken into consideration as well as the employees are discriminated on safety standards and compensation.

Thus, by evaluating decision on all the above approaches, we see that companies can make a better decision that is much more calculated and it at least forces them to take into consideration the harm that they are going to pose to others. If they do follow the ethical approach they will see that they will analyze all the possible positive and negative points about their decisions, analyze direct and indirect stakeholders in their decision, come up with alternate plans that pose lesser harm and balance out good with bad in order to maintain the balance of the society.

Work Cite Page

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2. Hirschheim, Rudy. Information Systems Outsourcing: Enduring Themes, New Perspectives and Global Challenges. Springer, 2006
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12. Gale Reference Team, Edward. “Proposed ethics opinion on outsourcing: ethics advisory opinion on dealing with ABA Model Rules withdrawn..” Florida Bar News,2007.
13. Michigan Association of CPA’s, Ethical considerations of outsourcing..Leaders Edge,2004.
14. Hirschheim, Rudy. Information Systems Outsourcing: Enduring Themes, New Perspectives and Global Challenges. Springer, 2006.
15. Knauf, Edward. “Three ethics rulings guide third-party outsourcing..” The National Public Accountant (2006): Print.
16. Miller, Richard. “Legal and ethical considerations of outsourcing..” Westchester County Business Journal,2004.
17. Salehnia, Ali.Ethical Issues of Information Systems.South-Western College Pub (2002): Print.
18. Hirschheim, Rudy. Information Systems Outsourcing: Enduring Themes, New Perspectives and Global Challenges. Springer, 2006.
19. Kehal, Harbhajan. Outsourcing and Offshoring in the 21st Century: A Socio-Economic Perspective . Idea Group Publishing, 2006
20. Jackson, Steve. “Managerial Accounting: A Focus on Ethical Decision Making.” South-Western College Pub (2008): Print.