Difficulties Associated with Managing Staff in Another Country - Essay Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Course : xxxxxxxxxxx Title : Difficulties associated with Managing staff in another country Tutor : xxxxxxxxxxx @2010 Table of Contents Table of Contents 2 Introduction 2 Advantages of off-shoring 4 Disadvantages of offshoring 6 Areas related to managing people 8 Recommendations on how to overcome the difficulties 13 Conclusion 14 Bibliography 15 Introduction Offshoring is the process of repositioning of discrete business activities or operations from the original location to a foreign location. It is mostly done over the nations; the operations of a country are expanded and established to other countries but under common management. This is due to lower cost of operations in these countries or reduced labor hence the company can enjoy more profit if the same commodities are produced or the similar business operations are offered at a lower cost. Thus it is either considered in the context of production offshoring or services offshoring. In the business world, offshoring is used in numerous different ways although all of them are correlated. It is widely used to comprise the replacement of a service from any overseas source of a service formerly produced internally to the firm and in other cases only imported services from supplementary or other instantly interrelated goods are involved. The history of offshoring can be traced back as early as 1800 when there was need for the America to improve its manufacturing productivity after discovering that it ran short of skilled labor thus there was the need to apply for the first mass methods of production. The outcome was that the factories in U.S. were able to out price and out produce in the European competition. The American goods gained market share because America began exporting goods to Europe. Labor forces in some of the early factories in America were terrible with child labor and slavery being the order of the time hence the cost of operation was minimal or completely not registered in some of the companies. The system of upward American productivity with lower cost went on through the industrial revolution up to 1900s when many other nations adapted the system although in different ways. With decolonization of various regions in Asia and Africa in 1960s, companies located in Western nations required transferring their means of production to the newly colonized countries or those that were struggling to develop. Companies were closed from their origin to nations with cheap labor leading to invention of the theory stating that the developed world was being transformed into a post-industrial service society. The invention of the advanced technology of internet towards the end of the 20th century together with the advancement of the telecommunication capability significantly reduced the rates of transportation making communication from one place to another more efficient hence more companies were able to offshore their services . The countries which were most engaged in off-shoring were India and China. India has since been the leading nation in global services expanding from software design to medical diagnosis. It experienced a recruitment of its software programs when the United States software services firms began to offshore important activities. Many companies based in the United States have their factories located in China for production activities together with research operations. This is because of the availability of skilled labor which is very cheap to hire (William 2000). Advantages of off-shoring Cost savings is the major advantage of off-shoring. This is as a result of the reduced labor; most of the companies consider the cost of production in a country before extending their productivity to them. They give priority to those whose the cost of production is less compared to their original. In additional to the reduced labor, savings on costs is also realized through the level of taxes charged, the surrounding and standard of safety and the infrastructure cost. For example, organizations such as banking or Information Technology based can move part of its operations to overseas so as to enjoy the benefits of lower costs but before considering this, they investigate or research on the working skills of the labor available in the newly intended area, the taxes which the organization would be charged is important if considered as it would greatly facilitate the final production of the firm. In addition the security of the area is important. Another advantage of off-shoring is that it may provide a physical presence in growing, large markets which can be leveraged to add to sales and develop international business experience. This is because when a branch of an organization or a company is located in a country and goods are produced, they are supplied to that country with the most convenient price thus the overall sales of the company is increased. The experience o the company is improved to the international level since it will have workers from different nations and coming up withy their own way of doing things leading to improvements of the skills of each worker. Thus the quality of services is improved by the fact that the every worker will be doing his or her best so as to prove his or her efforts. The performance can also be improved by the international competition of the companies; the management of various companies based on their countries located will work hard to be better than the others. Offshoring ensures that the prices of the commodities are stable because by signing the contract to the outsourcing the company obtains a stable price for its goods. This is a benefit because the company will be able to budget for the expense of operating and the capital purchases more accurately and still include the budget for the emergence expenses (Hunter 2006). Offshoring opens job opportunities to the residents of the nations where the new branches are opened. This is because the workers are recruited from the nation thus it is an opportunity for the qualified to get working opportunities. It can also boost the level of education of the residents because there will be a need for those willing to work in these companies to have the related skills. This also increases the skills of the local people because it is an opportunity of improving the working skills. The companies will have opportunities of choosing the best workers from the many available in all the concern nations. It is easier for the management of the company to assemble teams and projects faster than the ordinary because they readily have workers with all the skills ready for employment. This is best applicable if the nation considered does not run a related company because all the potential workers will not have any other option apart from the foreign company (Fitzgerald 2004). Disadvantages of offshoring There is the risk of exposing confidential data when the company is expanded from its origin to the other nations, everything concerning the organization must be shared to its various branches for equal running thus this information is likely to end up spreading the whole world hence it has no secrets. For example, if the company is outsourcing business processes like the payroll some information such as salary will be known by the entire outsourcing service provider. Some of the operations that the company is willing to offshore like the Information Technology, entails working with the area network hence anyone who can access the internet or the area network can get all the information concern and the same as the customer services. Instability of the offshore countries is an issue which affects most of the companies because of the risks which are likely to affect it. Nations like India and other South Asians’ are frequently affected by the religious and political activities which highly interfere with their stability. This negatively affects the economy of the place as much of the properties are destroyed as a result of riots and other public demonstrations. If an offshore business is sited in such nations it is likely to record losses instead of the intended profit. Before setting up the business in such a nation the management should ensure that the business is insured by the business continuity or by the disaster recovery plans (Gerwick 2000). The offshore businesses may also loose the managerial control because it is not easier to manage the outsourcing source as compared to the easier management of the personal employees. It is also not easier to control the operations of the firms unless the responsibility of each is left to its immediately management and then the general management waits for the final outcome of the firm which is mostly portrayed in the business records like the cash book and balance sheets. Outsourcing may also end up to loss of flexibility in response to varying conditions of a business, sharing of the cost savings and maybe lack of external and internal focus of the customer. This is because those who manage the business do not have the overall control of it. The owners have left the business to the management and the basic management depends on those in high ranks hence everyone is reluctant to react on any changes or decision making takes long. The organization may face some difficulties trying to train the potential workers on the skills required to do some of these jobs. For example, there are some nations which do not have facilities to offer full training on the information technology or whose technological development is not up to date so for the company to get fully qualified labor it is forced to train the workers first. This may be too expensive or takes a lot of time to settle at work (Alvarez 2000). Areas related to managing people There are some areas which are related to management of people and should be considered before adapting offshoring. This is because people have differences in their backgrounds, age, gender, capabilities and disabilities. Diversity should be the first thing for the management to consider. The management should consider workers with different background so as to have differing ideas of doing things, however this should not only be looked from this perspective but the management should try to consider the different needs of the workers and strategies ways of meeting their needs or trying to correct misconceptions concerning why people are different. So as to maintain the comfort of the workers, the human resource manager should consider the interest of each and employee and before determining the countries to extend their operations a thorough research should be carried out to ensure that the cultures and traditions are known and considered when strategizing for establishment of the company (Radice 2002). The diversity issues that the management should consider includes: the moral essential for equal opportunities or the accepted individual behaviour, legal requirement for fair and just treatment. These are the rights provided by the laws or constitution, the constant unfairness towards diverse individuals and successfully managing diversity can develop the organizational effectiveness. The principles set to guide the company should not be bias but should be convenient for any worker. Critical managerial roles can help overcome diversity of the workers. This can best be achieved if the management secures top management dedication by being so keen on every activity taking place in the organization and setting up rules which should be followed by every member of the organization and showing an example through living by them. They should also endeavor to boost the precision of perceptions. This is by ensuring that everything is perceived in a positive perception so as to ensure that nobody is undermined. The management can also try to increase the diversity awareness, skills and encourage flexibility. This is simply making everyone accept the differences of one another, boosting the working ability of each member based on the personalities and encouraging individual changes to the common objectives of the organization. Pay attention to the abilities of the members so as to know their capabilities and disabilities. The management should encourage the employees to defy the discriminatory action, behaviours and comments from the colleagues and recognize the efforts of those who do not show any differences among themselves. They can also provide training or seminars to teach the workers on the important of togetherness and honoring the rights of each other (Brittain-Catlin 2006). The other area which should be considered when managing people is the analyzing: attitudes, values, ethics and corporate social responsibility. Attitudes is concern about manager’s opinions and approaches of their particular jobs and organization, values shows that which the manager tries to achieve through work and how they think their employees should behave so as to give a good picture of the organization. Values can either be terminal, instrumental or system depending on the function. Ethics are the internal guiding moral principles which guide to determine what is wrong and what is right. Managers should have a strong ethics so as to decide the best decision to make concerning an organization and that which will favour the interest of every member. Corporate social responsibility assumes that it is the duty of the manager to make decisions which favors and promotes the wellbeing of the members and the society at large. It is understood as a way in which an organization attains a balance between the processes of a business to produce an overall positive effect on the society. Generally it concerns balancing social, economic and environmental obligations. Empowerment should also be considered when managing an organization. This is an act of giving workers at all levels authorities to make decisions and freedoms for their output. This helps the managers to involve the workers in the act of decision making and motivates the workers to be committed in their work and the managers have enough time to focus on other issues. This is because the workers are given freedom to make chooses and run the firm. The other thing that the managers should consider is the managing strategy and structure. A strategy is a group of decisions concerning the goals to pursue the actions to be taken and how to use resources to attain goals. When planning there are steps involved: The first step is determining the organizations’ goals and objectives. This will help to create a clear picture of the organization and this will help in the wise decision making. The second stage is formulating the strategy and this is best achieved by analyzing the develop strategies and the current situation. The third level is implementing the strategy and changing the organization. This involves sharing of the assets and farm duties to achieve strategies and then the assessment or evaluation of the whole process so as to determine whether the set objectives are being achieved and modify the plans where necessary to respond to the results of the evaluation. The overall planning of an organization is grouped into different levels with the corporate level plan being the top most management decision maker on the overall strategy and structure of the organization. It also provides guidance to the other levels of planning. Corporate level strategy is the other level of planning which indicates the national market or the specified industries in which the company intends to compete (Carmel & Tjia 2005). Other levels of planning are identified by the position or function of the official function of the personnel concern. For example, the function planning is done by the functional manager who is in charge of various functions such as the accounting, manufacturing or sales within the division All the above areas should be considered by the management before setting up an offshore for the assurance of its success. They also help the overall management to manage the operations of the organization because of the good strategy that is outlined hence it is easier to tell who is doing what, where, how and at what time. Recommendations on how to overcome the difficulties Some of the problems like exposing confidential data to the rest of the world can be overcome by ensuring that not all the information concerning the organization can be shared to all the branches. Some of the most sensitive for example, the salaries of the workers can be left to those concerns. Before determining the nation to locate the business its stability should the key thing to consider. Instability can lead to poor performance of the company or a complete loss of the business. The cost of the infrastructure should be the key determiner of where to locate the business because for example, the operations in discussion here requires a lot of money to set up and even run, for instance, the facilities used in the Information Technology are very expensive hence needs to be located in a country which is very stable and if there is a special need to locate them in the instable nations like India then the management should ensure that it is fully insured to guarantee its continuity. The business should be well strategized to enable the management take good control of its operations. This should include clearly identified hierarchies to ensure that each personnel is informed of who is responsible over what and who to consult for whichever service. The management and the workers at all levels should be empowered and given the authority to make the decisions over the company so long as there is a reliable means of communication to consult the higher management where necessary and before implementing the new idea. The decision making should be left with the immediate management because they are conversant with the conditions under which the business is run and knows what can be done to improve the performance of the specified business. So as to reduce the expenses of training the workers and to be assured of the availability of the skilled labor, the management should choose a location where the residents are taught on the skills related to the operations that the company is willing to locate in the area. This also will help reduce the time spent in the preparations of the operations (Lasserre 2008). Conclusion Offshoring is an important process to be considered by an organization but it requires good preparation so as top avoid the risks which the business is likely to encounter in the new home. Those with aspects which are difficult to manage like the insecurity should be ignored or avoided. This calls for the management to do a thorough research on the concern nation based on their field of interest. The management should be well prepared apply all the managerial skills to ensure successful running of the business. Bibliography William L. (2000). Globalization of the ICT Labor Force: In the Oxford Handbook on ICTs. Oxford: Oxford University Press, (forthcoming) Brittain-Catlin W. (2006). Offshore: The Dark Side of the Global. California: Picador. Fitzgerald P. (2004). Offshore. United Kingdom: Chivers Large Print, Gerwick B. (2000). Construction of marine and offshore structures. Mexico: CRC Press Alvarez A. (2000). Offshore. Magna Carta: Magna, Radice G. (2002). Offshore: Britain and the European idea. London: I.B.Tauris. Hunter I. (2006).The Indian offshore advantage: how offshoring is changing the face of HR Gower Publishing, Ltd., Carmel E. & Tjia P. (2005).Offshoring information technology: sourcing and outsourcing to a global workforce. Cambridge: Cambridge University Press, Lasserre P. (2008). Global strategic management. California: Palgrave Macmillan, Read More