Offshoring Businesses

Executive Summary

Offshoring safeguards that the business contractors are communicated to further expand the business in the new geographic locations. Apart from the positive outcomes that involve global expansion, recognition and enhanced performance, there are some negative aspects as well that entail tensions in terms of political, industrial, employment and economic spheres. The report maintains a fundamental refrain of offshoring and the allied connotations. The business considered for offshoring is PE, a US-based firm and is opening its call centre branch in China. The key job roles of the IHRM in offshoring involve consideration of the employee redeployment, consulting the unions and employees, identification of the training needs, designing the new job operations and laying prominence on the employment regulations. The macro-environmental analysis reveals that the potential political risks that can be incurred involve the pitiable technical expertise among the employees, industrial accidents and domestic political unrest.

Economic conditions reveal that China is the second-largest country in terms of nominal GDP. China’s literacy rate is up to 96 per cent and is heading towards technological growth. It is evident from the assessment that the recruitment process will majorly look for the key skills and will be aimed at cultivating training among the employees and accentuating loyalty and retention. China is having the largest population in the world and emerging towards development provides labour at a cheaper rate as compared to the US. For overcoming the cross-cultural barriers, the training program can be employed regarding linguistic training. The employees will be selected based on the knowledge of the Business Process Outsourcing (BPO) Industry. The motivation levels will be sustained at optimum levels so that the retention is promoted among the employees.

Introduction

The emergence of the global economy has fostered the businesses to offshore their business branches and indulge in the global expansion (Malik, Froese & Sharma, 2020). Globalization has eased the businesses to come forward to invest in expansion stratagems. These tactics not only assist in inflation in terms of profitability but also o grounds of organizational image and presence. This report is an extensive analysis of the location and its accompanied implications in expanding the business of call centre across the international borders.

1.1 Background

The computer maker organization being considered in the report is Proficient Electronics (PE) which is an MNE headquartered in California, US. PE is among the leading manufacturers of personal computers. The business is a flourishing one with its branches expanding across the globe. PE is currently operating in Mexico, Canada, and Australia and is now planning to expand in China. It is looking forward to expanding its business and ensure that its new branch captures the interest of the callers and also has the least figure of employee turnover.

1.2 Aims

This report envisages determining the suitability of China for setting up the business’s call centre in the country. The report is branched into three key sections; the initial section discusses the trends and challenges that are emerging in the call centres. The following section lays prominence on the role of IHRM in off-shoring. The third section discusses the inauguration of the business in Australia.

2. Trends and Challenges in The Call Centres

The global economy has epitomized the concept of a call centre with technological interruption. Offshoring is used to ensure that the business contractors are communicated to further expand the business in the new regions (Malik, Froese & Sharma, 2020). Apart from the positive aspects that involve global expansion, recognition and profitability, there are some negative aspects as well that involve tensions in terms of economic, political, industrial and employment aspects. Offshoring assists the businesses in making sure that the smooth operations are conducted from the lens of employment and the governmental interventions (Malik, Pereira & Tarba, 2019). Via offshoring, the potential risks that may incur in the operational zone may be eliminated. The uptake in offshoring has been a rapid process and has also fumed disputes in the home country of the centres (Mukherjee, Lahiri, Ash & Gaur, 2019). PE is an American multinational Information Technology organization which manufactures and delivers the top-notch quality personal computers with extensive computing ability. It provides its laptops to both small-sized and large-sized businesses.

The trends that appear to impact the call centres is the increasing intervention of Artificial intelligence (AI). Most of the call centres today make use of the AI to keep pace with the technological advancements and many businesses have stated that AI has also aided them in ensuing that the productivity is boosted. A significant challenge in this industry is the fact that consumer needs are changed continually and are transformed at a steady rate (Mukherjee, Lahiri, Ash & Gaur, 2019). Call centres are becoming Omni-channel contact and are making the communication process with the consumers more integrated and centralized. Cloud-based computing is also further channelizing the call centres. In the US, PE has many call centres that are aimed at generating new sale leads for the firm. Call centres are meant for a varied number of tasks that incorporate sales, marketing and customer support. The key challenge that PE is facing in its operations in the US are

3. Roles of IHRM in Offshoring

IHRM has the responsibility to ensure the smooth conduction of the operations while outsourcing the business branch. The cardinal role of IHRM can be summarized as follows:

  • Consulting the unions and employees

The IHRM acts as a key mediator in the process of maintaining a smooth flow of information. For the offshoring activities of the PE, the IHRM will play a strategic role in making sure that effective communication is practised between the employees and the other stakeholders. The transparent communication is essential at this stage so that the motivation level among the stakeholders is elevated and they effectively contribute to the process (Malik, Pereira & Tarba, 2019). Also, a positive atmosphere will be sustained throughout the offshoring process.

  • Consideration of the employee redeployment

Examining the scope of employee redeployment is a crucial aspect of the offshoring process. In offshoring of the PE call centre, the IHRM will make sure that the job reshuffling is done so that the expertise employees and the leaders can be set to the new branch. The reshuffling will also be beneficiary in making sure that the talent is retained in the firm and the morale of all the employees is boosted.

  • Identification of the training needs

For establishing a new branch and offshoring the business, it is integral that the training is done in an optimum manner. In the induction period, the IHRM can make sure that the training is provided regarding the handling of the calls and relying on the feedback of the customers to create the shout-out.

  • Designing the new job operations

For the offshoring, it is cardinal that according to the new needs of the new region, the tactics are correspondingly planned. Considering the new region, a need for the Chinese speaking agents will be crucial hence, the IHRM will look at these factors while designing the jobs.

  • Highlighting the risks concerning the employment regulations

In China, the working hours are limited to 40 hours a week. All the terms and conditions of employment are encapsulated under the Employment & Labor Laws and Regulations. The employment regulations differ in both countries. In America, "at-will" employment I employed which gives the employer the power to dismiss the employee without any reason. However, the same cannot be applied to China. In China, penalties are charged for the same and a written agreement is signed.

4. Call Centre in China

China is a country located in East Asia. It is the most populated country in the world. It recorded around 1.428 billion population in the year 2017. In terms of land size, the country is the third-largest in terms of size. The economy of China has transitioned into a more market-oriented economy. It is regarded as the upper-middle-income country. The new call centre will be located in Beijing which is the capital city of the country.

4.1 Macro environmental analysis

  • Political risks

China embraces sustainability in terms of the political environment. Its improved infrastructure and cheap labour make it suitable for the new flourishing businesses. However, the country has some political risks that involve public anger over the land distribution issues, industrial accidents and domestic political unrest. They can negatively influence the new call centre is established in terms of capital incurrence and fueling social instability (Song, Sun & Jin, 2017).

  • Economic system

In terms of nominal GDP, China is the second-largest country which makes it favourable for establishing a new business. It is accompanied by some risks as well that involve rapid urbanisation, poor adherence with the corporate social responsibility that is adversely impacting the environment and high inequality. The average level of wages has tripled by the year 2016 (Hou, Cao & Liu, 2018). The labour supply in the country is comparatively cheaper. However, the jobs that require technical skills, there is a shortage of labour in this context.

  • Scio-cultural impacts

China’s literacy rate is up to 96 per cent which makes the people more acceptable towards new businesses and latest advancements (Yang, He & Gao, 2017). It is a land of many MNEs which has made the people cultivate a positive attitude towards MNEs.

  • Technological capabilities

There is a high number of technology and science graduates in China which makes them actively participate and contribute to technological innovations. It also launched a technology and mass innovation program in the year 2015 to foster its technological development (Wu, 2020). The country is moving from a labour-driven one to the technology-driven country. The technological developments will be favourable to operate the call centre as it will help incur the latest technologies such as Voice broadcasting, plus IVR systems, ACD and IVR software. With the assistance of technology, China reported around 829 million online users (Wu, 2020).

4.2 ER between host and PC

When comparing the host country and China, it is evident that in China, people tend to change jobs more often in the pursuit of jobs that pay higher wages. The mobility of the capital is facilitated in the US and China due to the like-minded campaigns (Hou, Cao & Liu, 2018). The IHRM will look at the key areas where the redundancy needs to be minimized that involve sales and marketing team. The IHRM will be responsible for locating the resources that will be required for the training sessions. They are accountable for associating the KPIs with the needs of training as per the language and culture of China.

4.3 Other expansion

China is having the largest population in the world and emerging towards development provides labour at a cheaper rate as compared to the US (Wu, 2020). Training will also be provided regarding the ‘guanxi’ relationships which are vital in China for the MNEs’ operations.

5. Recruitment Process

The recruitment process for the new call centre will be an inclusive one and will look for certain key skill skills in the employees. The employees will be selected based on the knowledge of the Business Process Outsourcing (BPO) Industry. This is so because it is cardinal for the operations of the call centre. It will be the preliminary round. They must be proficient in both verbal and written local and English language. They must be well-versed with security and data integrity. The company’s code of conduct will be communicated to the employees. For the employee retention, a bond of three years will be signed between the employee and employer to give the sense of job security to the employees and also contribute to the elevated retention of the employees. The code of conduct will be built upon the SA8000. Child labour will not be supported and all the employees must be above the age of 22 years. No sort of compulsory labour will be promoted. OSH compliance will be trailed and strict supervision of the safety will be maintained by the OSH representatives. Working hours will comply with China's employment and labour law.

6. Retention Process

6.1 Training and development

The employees will be motivated to deliver the creative and competitive solutions which will be a great initiative in fostering a culture of virtuous work. To overcome the cross-cultural barriers, the training program must employ linguistic training so that any sort of glitches are eradicated (Liao, Xiao, Zhang & Zhou, 2017). Training must be provided to resist the corrupt staff behaviour and penalties can be charged by the supervisor (Medina, 2017). Training will also be provided regarding the ‘guanxi’ relationships which are crucial in China for the MNEs’ operations that offer proper handling of the business dynamics (Badi, Wang & Pryke, 2017). 

6.2 Compensation

A campaign of the like-minded groups from both US and China can serve as the mobility for the capital (Hou, Cao & Liu, 2018). This will help compensate the power imbalance between the employees and the employer in the MNE. As a part of this approach, all the stakeholders will be integrated into the decision-making process. By involving the employees in the decision-making process, the motivation among them can be inflated which is a key way via which the employees can be retained within the firm (Barbu & Song, 2016). 

7. Conclusion

The report maintains a key theme of offshoring and the associated implications. The business considered for offshoring is PE, a US-based firm and is opening its call centre branch in China. It can be inferred from the report that through offshoring, the probable risks that may incur in the functioning zone may be eliminated. The key job roles of the IHRM in offshoring involve consideration of the employee redeployment, consulting the unions and employees, identification of the training needs, designing the new job operations and laying prominence on the employment regulations. It is evident from the macro-environmental analysis that the potential risks that can be incurred involve the lack of employees having the technical expertise, industrial accidents and domestic political unrest. Economic conditions reveal that China is the second-largest country in terms of nominal GDP. China’s literacy rate is up to 96 per cent and is heading towards technological growth. It is evident from the assessment that the recruitment process will majorly look for the key skills and will be aimed at cultivating training among the employees and accentuating loyalty and retention.

References

Badi, S., Wang, L., & Pryke, S. (2017). Relationship marketing in Guanxi networks: A social network analysis study of Chinese construction small and medium-sized enterprises. Industrial Marketing Management60, 204-218.

Barbu, E., & Song, X. (2016). The effects of offshoring on employer-provided training. The Journal of International Trade & Economic Development25(4), 479-503.

Hou, J., Cao, M., & Liu, P. (2018). Development and utilization of geothermal energy in China: Current practices and future strategies. Renewable Energy125, 401-412.

Liao, L., Xiao, J. J., Zhang, W., & Zhou, C. (2017). Financial literacy and risky asset holdings: evidence from China. Accounting & Finance57(5), 1383-1415.

Malik, A., Froese, F. J., & Sharma, P. (2020). Role of HRM in knowledge integration: Towards a conceptual framework. Journal of Business Research109(C), 524-535.

Malik, A., Pereira, V., & Tarba, S. (2019). The role of HRM practices in product development: Contextual ambidexterity in a US MNC’s subsidiary in India. The International Journal of Human Resource Management30(4), 536-564.

Medina, M. N. (2017). Training motivation and satisfaction: The role of goal orientation and offshoring perception. Personality and Individual Differences105, 287-293.

Mukherjee, D., Lahiri, S., Ash, S. R., & Gaur, A. S. (2019). Search motives, local embeddedness, and knowledge outcomes in offshoring. Journal of Business Research103, 365-375.

Song, J., Sun, Y., & Jin, L. (2017). PESTEL analysis of the development of the waste-to-energy incineration industry in China. Renewable and Sustainable Energy Reviews80, 276-289.

Wu, Y. (2020). The Marketing Strategies of IKEA in China Using Tools of PESTEL, Five Forces Model and SWOT Analysis. In International Academic Conference on Frontiers in Social Sciences and Management Innovation (IAFSM 2019), 348-355.

Yang, L., HE, H. B., & GAO, L. M. (2017). Analysis on the health literacy and its influencing factors among women of childbearing age in some regions of China in 2015. Chinese Journal of Health Education, (6), 5.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Human Resource Management Assignment Help

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