International Management: Managing Across Borders and Cultures
International Management: Managing Across Borders and CulturesCase Questions
1. How has the global economic downturn, discussed in the opening profile and throughout this chapter, impacted jobs outsourcing in the BPO industry?
The global economic downturn caused uncertainty, which again lead to a major desire to cutting cost. This made firms look overseas for cheaper opportunities and advantages like lower wages and taxes. In the case of India’s BPO, the industry grew as a result of this. Already in 2004-05 the number of captive and third party service providers added up to about 400 companies in the Indian BPO sector. Furthermore India’s exports of ITES/BPO services were estimated to have an annual growth rate of 26% through 2010. However the economic downturn resulted in the dollar weakened and the rupee strengthened, which made it harder for firms to be profitable in India. At this point companies had already started to look at Singapore, China, the Philippines, and Malaysia. Especially the Philippines emerged to a promising outsourcing destination with world-class infrastructure, ten year tax-break, an Americanized culture and language due to 50 years of colonial influence.
2. referring to this chapter and this case, discuss the general trends in the globalization of human capital?
Western companies are tending to move certain services to the Asian countries such as customer care, medical transcription, medical billing, payroll management and tax processing. The information technology services have also played a key roll contributor to the economic growth of these countries. The western countries are looking for countries in Asia have certain characteristics such as English speaking, manpower, high-end telecom infrastructure and strong quality orientation within the industry. The main reason for this outsource is to lower their costs and increase their profit margin.
3. What are the effects of the Indian government policies on the Indian BPO industry and on MNC decisions regarding locations for outsourcing jobs?...