Introduction to Management - Case Study Example

Running Head: Introduction to Management Introduction to Management [Institute’s Introduction to Management IntroductionSince few decades, experts (Burkholder, pp. 39-42, 2006) have noticed a rapid advancement in the field of information technology that has opened new avenues for businesspersons around the globe. Besides development in the IT field, globalization is another major factor that has altered a number of business processes globally. However, along with all such factors, the business world is currently confronting the economic recession on the global level that is enforcing business organizations to identify new opportunities and reduce their costs in order to survive in this competitive world since almost a decade (Strassman, pp. 1-53, 2006). It is an observation that in midst of such economic chaos, outsourcing is one of the major approaches that has benefited, and still benefiting a huge number of business organizations in terms of reduction of costs. Such characteristic of outsourcing has caused many organizations, especially in the developed parts of the globe to focus on the human resource of developing countries; specifically African and Asian countries that offer reduce costs but same quality except few challenges. However, in order to overcome challenges of outsourcing and benefit extensively from such opportunities, it is very imperative to carry out analysis of its different aspects. For such purpose, this paper will be discussing different issues of outsourcing while analyzing a case study (Hatch, pp. 50, 2006) of an Australian fashion retailer, Leethal Fashion Accessories that will allow a comprehensive and critical understanding of the topic. Discussion External Environment Factors Besides financial matters and internal processes, business organizations have to confront few external environment issues, and it becomes very imperative for them to resolve them, as it is an observation that avoiding external factors often result in huge losses, as well as deterioration of internal processes. The selected case study (Hatch, pp. 50, 2006) specified that while accessing the Indian manufacturing market, the organization confronted a number of external factors that needed immediate attention. Firstly, Lee (CEO) of the organization indicated the existence of language and communication barriers that have become the most common management issues around the world. Although globalization provided new avenues and outsourcing offered reduced costs in developing countries, however, analysis has indicated that human resource of such countries are usually unable to communicate in English language that often creates misunderstandings. Besides language, there is a huge difference of metric system between developed and developing countries. For instance, importer uses inches while manufacturer has been using centimeters in his local market that often becomes problem at the time of finishing products. In addition, case study (Hatch, pp. 50, 2006) reflected that Lee confronted the presence of religious and cultural factor. In management practices, these factors are enjoying a significant status due to need of their urgent need in global business practices. Experts (York, pp. 51-54, 2009) have identified that some practices might be a norm in the Australian society; however, the same practice might be an awful practice in India due to their difference in culture and religion (Strassman, pp. 1-53, 2006). Thus, Lee in the case study (Hatch, pp. 50, 2006) conversed about the religious and cultural differences as an imperative external environment factors confronting in the Indian market. Moreover, it is observation and case study (Hatch, pp. 50, 2006) reflected the same observation that besides internal unethical practices, business organizations have to confront the adverse effects of corruption at government level that often becomes a very crucial matter. In developing countries such as India, reports have indicated huge amount of corruption practices, another significant external environment factor that Leethal Fashion Accessories confronted while entering into the Indian manufacturing market. Furthermore, the list does not end here and analysts have indicated the presence of a very unpleasant practice in the outsourcing markets of India and other markets that might be a huge issue in developed business markets of Australia, the United States, the United Kingdom, etc: delivery delays. The case study (Hatch, pp. 50, 2006) showed that Indian manufacturers enjoy this common practice of delaying deliveries. Although some issues may seriously affect the deliveries, however, this has become a common external environment factor in India, creating enormous obstructions in the business management processes (Harris, Brewster & Sparrow, pp. 20-28, 2003). Issues confronted by Australian Manufacturers Now the paper will discuss some of the issues confronted by Australian manufacturers & some factors that contribute in considering India as the most desirable market for outsourcing products and services. The case study (Hatch, pp. 50, 2006) indicated that textile and fashion industry is near to abandonment and due to such failure of Australian fashion market, it has now become essential for Australian designers to look for alternative markets, the foremost factor that enforced Leethal Fashion Accessories to enter in the Indian manufacturing market for producing their wearable items. Another issue shown by the case study (Hatch, pp. 50, 2006) is huge costs of labor in Australia, second most crucial issue that is enforcing businesses in developed countries to close down their local manufacturing units and give outsourcing orders to developing markets. On the other hand, India has huge amount of labor that are ready to work on low costs due to poverty in the country, and such characteristic of Indian population has turned into its own strength that brings outsourcing orders worth million of orders to Indian annually. Growth at the rate of ten percent in the Indian manufacturing sector (Hatch, pp. 50, 2006) is an evident indication of the significant importance of Indian manufacturers in the global market, and despite of external factors discussed earlier in the paper, Australian and other importers are heading towards India for their orders. Another major issue identified in the case study (Hatch, pp. 50, 2006) inclined towards comparison of Indian and Chinese market. Although China offers lower labor costs as compared to Indian manufacturers, however, analysis has indicated that despite of low offers of China; importers are considering India due to its availability of small quantity orders (Hatch, pp. 50, 2006). Whereas, China is focusing only on huge orders, and thus, India has become a desirable outsourcing destination for small and medium-sized importers and designs such as Leethal Fashion Accessories. In this regard, India has become a “saving grace for small businesses operating on tight margins” according to the case study article (Hatch, pp. 50, 2006) that discussed in brief the prospects and offers of Indian manufacturing market in response to issues confronted by Australian business organizations in their own country. For this reason, India is a significant alternative destination for several other companies like Leethal Fashion Accessories that began with the capital of 0.2 million dollars (Hatch, pp. 50, 2006); however, it has been successful in acquiring the turnover of two million dollars with only eleven staff members that is a true success story of outsourcing and effective management practices. Control Challenges at Leethal Fashion Accessories As earlier discussed, Leethal Fashion Accessories confronted the challenge of accepting late deliveries from its Indian outsourcing counterparts. Case study (Hatch, pp. 50, 2006) showed that missing occasional deadline was the common practice that became a challenge for the organization, and Lee controlled and eliminated this issue by planning and providing detailed deadlines to the Indian manufactures that was an efficient way of controlling inefficiency of the Indian outsourcing companies. Article (Hatch, pp. 50, 2006) indicated that Leethal Fashion Accessories confronted problems in receiving varying qualities of products due to different local reasons, such as electricity, bad weather, etc. In response, Lee focused on controlling and resolving this problem by acquiring a different style of communication that resulted in effective outcomes, and allowed the business to pursue its path of success. Article (Hatch, pp. 50, 2006) specified that different markets follow different management practices, and thus, it is very imperative for importers and business organizations in the developed world to understand the style of negotiation according to the specific market. For such purpose, Leethal Fashion Accessories put efforts to understand management practices of Indian manufacturers and acquired a different negotiation strategy that enabled them to control the inefficiencies during the business process that was beneficial for stakeholders on both sides. Furthermore, Lee suggested her controlling strategies to prospective organizations that are thinking to enter into the Indian market. She (Hatch, pp. 50, 2006) specified that before starting the business, it is very important that one should put efforts to understand capabilities and capacities of the Indian manufacturers. It is an observation that Indian manufacturers show huge capacity and many capabilities, in order to acquire the order; however, after getting the order, business organizations confront problems regarding both capabilities, as well as capacities. For this reason, one should research and understand capabilities of manufacturers in detail and set objectives accordingly that will be significant in acquiring success in the market. In this regard, combination of different controlling strategies enabled Leethal Fashion Accessories to resolve or eliminate issues and challenges confronting during accessing Indian manufacturing market, and in brief, business organizations should set considerable amount of time for market research that will be beneficial on the long-term basis. Suggested Controls Although Lee did an effective job by implementing different controlling strategies, however, if I were in place, the foremost thing in my list will be acquiring services of a translator or an outsource manager that has now become an essential component for outsourcing products and services. This step of hiring an outsource manager in India would have been very beneficial for Leethal Fashion Accessories, and would have allowed Lee to eliminate the issue from its very root. Studies (Bragg, pp. 23-29, 2006) have indicated that nowadays, business organizations are now relying significantly on managers (Cornelius, pp. 25-31, 2000) for their outsourcing projects, whereas, some rely on local managers while some send staff from developed parts to the Indian or Chinese markets that allow the companies to monitor the activities on ground reality. One of the major reasons of considering the outsource manager as the major controller is that analysis (Marchington & Wilkinson, pp. 48-53, 2005) has indicated that Indian manufacturers often inform importers about factors that do not exist at all in their specific region. For instance, Indian is a country with diverse cultures and traditions, so it is not essential that a cultural festival in one part of the country would be closing business activities in other corner of the country (Ivancevich, pp. 75-77, 2004). However, manufacturers often take advantage of unavailability of information, and the outsourcing manager would be the best controlling decision that will play a significant role in controlling different issues and reporting it directly to Leethal Fashion Accessories. Besides hiring an outsource manager and understanding management practices of Indian market, HRM strategies will be another effective alternative to control the problems in the Indian market. It is an observation that such small manufacturers in India do not practice HRM strategies; however, provision of HRM incentives and bonuses will be another best option to encourage and motivate them to arrange the delivery on its deadline (Galanaki & Papalexandris, 2007). Besides a number of challenges, there is no doubt that Indian manufacturers put their all efforts to get the order and complete it on time; however, provision of extra bonuses will an efficient way of controlling problems and issues during the process (Mullins, pp. 11-14, 2007). In addition, besides bonuses, fines against late delivery will be another alternative in keeping manufacturers on the deadline. Last but one of the most important options will be the provision of training to Indian manufacturers at their local level that often seems notion of a corporate culture. However, trained employees in India will be more cooperative in terms of understanding quality standards of Western society, and on the long-term basis, training will result in reduced costs, as well as high quality products and services. In this regard, combination of all such controlling strategies will be very effective in ensuring that Indian manufacturers perform to quality standards and deadlines of Australia, and will take Leethal Fashion Accessories to new heights of success. Conclusion Conclusively, the paper has discussed some of the significant aspects of management while considering the specific article (Hatch, pp. 50, 2006) that included the case study of Leethal Fashion Accessories run by Gail Lee, managing director of the Australian fashion retailer. In brief, the paper identified and analyzed different issues that are inclining Australian business organizations to rely on the Indian manufacturing market, as well as hindrances that create challenges and need attention of the importers. Lastly, globalization has been a beneficial notion for business organizations that are now able to enter into different alternative markets for their diverse range of business activities. Besides, economic recession is enforcing companies to look for outsourcing; however, it is very imperative that business organizations should take effective steps discussed earlier in the paper, as avoidance of such issues may seem insignificant but may result in losses on the long-term basis. Finally, it is an expectation that the paper will be beneficial for students, teachers, and professionals in better understanding of the topic. References Bragg, Steven M. (2006). Outsourcing. John Wiley & Sons. Burkholder, Nicholas C. (2006). Outsourcing. John Wiley & Sons. Cornelius, Nelarine. (2000). Human Resource Management: A Managerial Perspective. Cengage Learning Business Press. Galanaki, Eleanna & Papalexandris, Nancy. (2007). Internationalization as a determining factor of HRM outsourcing. Accessed September 7, 2009 from http://www.informaworld.com/smpp/content~db=all~content=a781847424 Harris, Hilary, Brewster, Chris & Sparrow, Paul. (2003). International Human Resource Management. Chartered Institute of Personnel & Development. Hatch, B. (2006). “Small players frock to India.” The Australian Financial Review, Issue of December 05, 2006, p.50. Ivancevich, A. (2004). Human Resource Management. Springer. Marchington, Mick & Wilkinson, Adrian. (2005). Human Resource Management at Work. Chartered Institute of Personnel & Development. Mullins, Laurie J. (2007). Management and organisational behavior. Financial Times/ Prentice Hall. Strassmann, Paul A. (2006). “Is Outsourcing Profitable?” Lecture Series of March 2006. George Mason University Press, pp. 1-53. York, Kenneth M. (2009). Applied Human Resource Management: Strategic Issues and Experiential Exercises. Sage Publications Inc. Read More