Outsourcing has got much relevance in the post modern business sector.

It is an act or process in which one organization giving contract to another organization inorder to carry out certain operations or business activities. The need for outsourcing arises in an organization when the house employees are unable to carry out the operations due to several reasons. The organization is benefitted by the process of outsourcing especially with the financial gain and other advantages as well. The usual tasks that are outsourced by the companies include payrolls, emails and call centre. These tasks will be performed by the companies that are contracted with the master company. Such companies are specialized for performing in those concerned tasks assigned. This increases the quality of service as well as the efficiency offered by the master company and thereby able to satisfy their customers according to their expectations. Hence, the impact of outsourcing in the global business is huge. Globalisation and outsourcing The outsourcing is mainly supported by the globalisation as it is has now become a great motivator for the international business and trade. As with the advent of globalization, the face of the business world as well as the global economy changed tremendously. The globalization transcends the barriers of nations in trade, culture, communication etc. The globalization supported and promoted to enhance the inherent wealth of all the countries across the world. When taking into account of outsourcing, the impact of globalization in this sector is also unavoidable. The outsourcing has been accepted and implemented worldwide with the help of globalization. There are many factors that helped the companies globally to accept the process of outsourcing as a part of globalization which is discussed in the following part. The primary factor is that the capital of the nations can be mobilized or transferred by outsourcing because of globalization. The next factor is the transfer of efficient and skilled human resources. This is possible when the developed countries recruit skilled employees from the developing or under developed countries. This becomes helpful for both the developed and developing or under developed countries. The developed

countries are benefitted as they are able to hire excellent performing employees for low cost whereas the developing countries are able to increase their standard of living. Thus, globalization supports the outsourcing in transferring human resources. The other factor is the communication technologies. This factor is very essential for the organizations to carry out their business processes and responsibilities effectively and efficiently. Thus, the globalization gives a great support for outsourcing to get the good output through communication technologies. In the past period of business sector especially before the impact of globalization came into existence, the in country outsourcing was there. But, it was not that much cost effective. But, the advent of globalization supported the out country outsourcing which is found to be very cost effective and this is a great advantage for the companies. Impact of outsourcing in organizational structure The organizational structure is a crucial factor for any organization. The organizational structure can be described as hierarchal order or lines of authority structure of framework of the organisation. The structure of organisation can also be defined as configuration or overall arrangement of the organisation. The structure of organisation varies with each organisation and also there is significant difference with the post modern and traditional organizational structure of the organizations. The traditionally structured organizations are challenged by the organizational activity like outsourcing frequently. The organizational structure with traditional type is not willing to change as per the changes in the organisation. The organizational structures are even proved to play a vital role in the success of the business.The relevance of outsourcing should be identified by the organizational needs and structure of the organisation. Each organisation has its own mission and vision which also have an impact on the outsourcing of the organisation. The decisions taken regarding outsourcing can be affected by the power of the senior managers as well as the vision of the

organisation. The vision and mission of the company have a great impact on the products and services offered as well as on the decisions that are taken regarding the customers and market. All these are inturn related to the structure of the company and the decisions about the outsourcing is the result of this organizational structure. Advantages and disadvantages of outsourcing The following part details the advantages and disadvantages of outsourcing in a company. Advantages of outsourcing y y y y y y y y y y y The companies can save sufficient money due to the process of outsourcing The process of outsourcing helps the companies in staffing flexibility The continuity and risk management are supported by outsourcing The companies can decrease the overhead with the support of outsourcing The companies are able to focus more on their internal employees with the application of outsourcing in the business processes The operational cost of the organizations are also reduced by the process of outsourcing The candidates in the developing countries get more opportunities through outsourcing The organizations can concentrate more on their core and vital business activities when they outsource their least important activities or operations The organizations can make relationships with other companies in a more cost effective way through outsourcing The process of outsourcing helps the companies to limit their infrastructure facilities The organizations are able to hire more skilled professionals through outsourcing

Disadvantages of outsourcing y The organizations are unable to maintain a good relationship with the customers as there is no chance for direct communication between the customers and organization y The master company does not have a managerial control over the outsourcing company y The process of outsourcing can bring quality issues y The reputation or the business operations of the master company can be affected if there is any issues or problems in the outsourcing company y The companies sometimes need to pay hidden costs due to outsourcing y The effective operations of the new projects of the master company can be delayed due to outsourcing y Outsourcing can bring threat to the confidentiality and security of the master company

Successful outsourcing companies y y y y y Softheme Virtual IT Quscient Technologies TATA Consultancy Service Vertex Business Process Outsourcing

The above mentioned companies are the examples successful outsourcing organizations Reasons of the success y These companies offer high quality and commitment to their customers y The human resources of these companies are highly committed to their work and are well capable

y These companies have a cost effective approach for the clients y The organizational structure of these companies are effective and good y These companies are successful in maintaining good and strong relationships y These companies get reference from their satisfied customers y The use of advanced and excellent technology and the effectiveness of using this technology y The company reputation and the ability to keep up this reputation in all of the business operations and functions y The location of these companies and its significance in money saving y Keen and careful attention to all the problems and issues y Clear and exact understanding of the goals, objectives, vision, aims and mission of the participant organisation and delivering the service accordingly y These companies have good training and development y These companies are capable of controlling the quality and maintaining the risk

The reason for the failure y Lack of effective and good technology for carrying out the business processes y These companies offer high cost effective services to the customers y Lack of good training and development for the employees as well as lack of commitment to the work quality Question Two Virtual organisation The virtual organisation is vital for the post modern business sector and therefore it is one among the common concepts in the modern business. The concept of virtual organization is different and is one of the post modern business concepts

as well. In virtual organization, the stakeholders and the world are allowed to participate equally. It is an important idea for the modern business environment and is motivated by the organizational patterns, economic realities in the organizations. It is all about the social behaviour of the organization, impact of technology in the social structure evolution, nature of work in the information age etc. Some definitions of virtual organisaation is given below y Virtual organisations are the temporary or permanent collection of geographically dispersed individualsand hence they are individualistic y It is collected to the departments which may belong to same or the whole company y Virtual organisation brings complementary competencies and resources and thus it has a dynamic alliance between the companies

The continuum of network companies

Key characteristics of virtual organizations Boundary crossing

The most important factor for every organisation is to meet the customer needs and satisfy them in order to gain the success and profit. Hence, the organizations should be flexible enough to change the operations and activities of the business according to changes in the market and customer demands and needs. The organisations are able to respond to the changing demands only when they are flexible. This flexibility makes the organisation to produce the products and services as per the needs. The virtual organisation always takes a great effort in meeting the expectations of the customers and thereby satisfying them. This gives a good support for the companies in developing their functions. The sharing of the resources Another feature of virtual organisation is the ability to share the core competencies and resources of the participant companies. This supports the company to have amovement in the market and helps the company to develop and maintain strong relationship. Thus, participation of companies in a virtual organisation is good and effective for each other in the business operations. Geographic dispersion Another characteristic feature of the virtual organisation includes the geographic dispersion. It is important and are able to do only with the support of the participant companies of the virtual organisation. This brings an effective and rapid communication with the companies across the world. Changing the participants In virtual organisation, it is possible to change the participant companies at any time when there is any genuine purpose. The participants are changed frequently as per any changes in the business environment. Hence, in virtual organisation there are no permanent relationships between the organizations. The participant companies are also changed according to the changing requirements of the customers as well. The equality of the partners

This is another important factor that the virtual organisation needs to consider. The equality of partners means the partners that are participating in the virtual organisation should be of equal in their strength and size which helps to build strong relationships and partnerships. The equality of partners in the virtual organisation also enhances the interdependence between the partners inorder to support their partnership and relationship each other. Thus, this characteristic feature of virtual organisation helps in an effective as well as mutual partnership. Electronic communication Communication is an important factor in any relationships or partnerships. Electronic communication is very essential especially for the business relations to achieve success. Effective communication results in effective collaborations for the business which inturn have good power in the organisation. The electronic communication helps the organisation to get the present information technology which is important for a business to proceed growth further and thereby to gain the success. Temporaries This is the next characteristics of the virtual organisation. This temporary nature of virtual organisation is actually a debate among the investigators. Virtual organisation and conventional organisation This part discusses the difference between the virtual and conventional organisation. The virtual organisation is entirely an imaginary concept that is not directly linked with the actual and real organization. This is a vision or concept of the top management of the company. The concepts and ideas in virtual organisation are beyond the concepts and ideas of the conventional organization. The conventional organization on the other hand represents the physical image of the ideas in the structure of organisation. The main difference between the virtual and conventional organization include the structural, operational and strategic which are explained below.

Structural differences y The primary difference is the physical structure. The virtual organization is an imaginary and amorphous concept and does not have any physical structure whereas conventional organization has a physical structure and hence it has solid assets y There is no geographical boundary for virtual organization whereas conventional organization has geographical boundary y The communication and mobility of the workers are more in virtual organization than conventional organization y The flexibility and structure is also more in virtual organization than conventional organization Operational difference y The communication approach is different in the organizations. The communication is more and effective in virtual organization than the conventional organization y The virtual organization needs assessment and evaluation frequently whereas conventional organization does not want this y The virtual organization pay keen attention on the relevance and importance of knowledge whereas the conventional organization gives attention on knowledge through management Strategic differences y The competence in the virtual organization is mainly driven through the human resources in the organization and therefore the human resources get the possibility in the organization. In virtual organization, there is much possibility for the employees. In conventional organization, the managers are entirely opposite to that of virtual organization y The virtual organizations have relationships in the basis of integration of the vendors and the people, integration of the process and integration of the people and hence there is strong relationships in the organization y The knowledge management is well supported by the virtual organization

y One of the hard aspects in the virtual organization is the management of technology

The virtual organization and network organization In virtual organization, all the functions of the organization are contracted out and only the co-ordination among the parties and name are sustained by the virtual organization. There is no permanent office for virtual organization. To make specific brand in the market and industry, the entire functions of the organization is subcontracted. The network organization is completely different from the concept of virtual organization. The network organization consists of a set of numerous autonomous firms in the market that are gathered together. Hence, network organization consists of both large and small firms. According to the requirement and availability, the units in the network organization may be either big or small. The co-ordination and functioning of the social organization is organized and controlled by the social mechanism. Difference between managing virtual organization and conventional organization Managing the conventional and virtual organization has got significant difference. The managing style and power in the organization can be affected by the success of both conventional and virtual organization. The numerous differences between these two types of organization separate them. The aggregate factors are the main difference that should be managed by the organizations. One of the major management factors on the virtual organization is organizing and co-ordinating all the dispersed and desperate factors of the organization. Virtual organization: reasons for failure and reasons for success The following are the factors for the success of virtual organization

y y y y

The equal partners have an excellent partnership The existence of temporary relationships The effective and good communication The facilities for transforming technologies and its effective usage

The reasons for the failure of virtual organization is detailed below y The teams are unable to meet the performance objectives of the organization y Poor and lack of good and right direction from the leader y Lack of good and strong relationship between the leaders and the team members y Lack of concentration to the opinions and suggestions of the team members

Question three Strategic alliance In the post modern business sector, the competition is so high and therefore the sustainability of the companies are very important which would be possible with the support of other companies in the market and industry . Hence, the importance of strategic alliance is higher in the international business management. The strategic alliance is not just a merging of two companies or building relationship between two companies. But it is more than that which helps the companies mutually to support each other in their business processes and activities. Majority of the strategic alliances are of formal type relationships. The concept of strategic alliance became more popular with the advent of globalization. The strategic alliance results in partnership and not the ownership of the companies. The airline industry, telecommunication, banking industry is the major industries in which the companies opt for strategic alliances. A best

example for the strategic alliance is the British airlines. They don t have any flights that operate in the Cochin town, Kerala, India. But the British airlines have strategic alliance with one of the local airlines of India that help to transfer the customers to the main cities where there is no direct operating flights of British airways. An example from the banking industry is that some Indian banks have strategic relationship with the British banks which helps them in operating the banking transactions. Difference with outsourcing and virtual organizations The concepts of strategic alliance, outsourcing and virtual organization differ from each other. Outsourcing is the process of giving contract to other company for carrying out particular tasks or functions which is unable to perform by the house employees of the parent company. The outsourcing helps the parent company to focus more on their core activities and are able to hire more skilled employees with low cost. The concept of virtual organization is different and is one of the post modern business concepts as well. In virtual organization, the stakeholders and the world are allowed to participate equally. It is an important idea for the modern business environment and is motivated by the organizational patterns, economic realities in the organizations. It is all about the social behaviour of the organization, impact of technology in the social structure evolution, nature of work in the information age etc. The concept of strategic alliance is entirely different from the above two concepts. In the post modern business sector, the competition is so high and therefore the sustainability of the companies are very important which would be possible with the support of other companies in the market and industry . Hence, the importance of strategic alliance is higher in the international business management. The strategic alliance is not just a merging of two companies or building relationship between two companies. But it is more than that which helps the companies mutually to support each other in their business processes and activities. Majority of the strategic alliances are of formal type relationships.

Objectives of strategic alliances The following part gives the details of objectives of the strategic alliance of the companies. y The strategic alliance can be considered as one of the best growth strategies of the companies. This is useful especially for the companies that enter into the new market. The company that is going to enter into the new market make a strategic alliance with already existing and established companies of the market, then it helps the new company to get competitive advantage in the new market. It also helps in maintaining good and strong relationships with the other companies in the market y The main challenge for the companies is the application of new and advanced technology to gain the competitive advantage and most of the companies are failure in the implementation and usage of new technologies. The strategic alliance supports the companies to go for an agreement with other companies to acquire and share the technologies and to utilize the excellent technology for the growth of business. y Another major advantage for the companies that go for strategic alliance is that they can reduce the risk of finance as there is possibility for sharing the benefits and cost for the research and development of the companies. The companies face the financial risk mainly while developing the new products and this can be minimized by considering strategic alliance as their business strategy y The most important benefit that the companies gain through strategic alliance is the competitive advantage in the market and industry The major advantages that the organization achieve through strategic alliance is given below y Achieve more and better technology and skills within the companies y Easy and instant access to the market and industry y The image of the company is enhanced which is a great support for the companies

Challenges of the strategic alliances y The quality of the partners has to be ensured by the companies prior to strategic alliance y The organizations should be keen in maintaining the time frame or else it can create negative effect among the customers y The companies should have an effective communication or else can bring many issues y In strategic alliance, there is a possibility for the lack of control for the decisions taken There are many merits and demerits for strategic alliances While considering the global economy, there can be many successful as well as failure strategic alliances which is mentioned in the following part y y y y y y y y y y y y Yahoo and Sina Sun and Chinaunicom Philips and Benq University of Wales and Universities of Malaysia IBM and Kingdee International Software Siemens and Huawei Technologies Motorola and Proview International Holdings Intel and Richtek Jamba and Chinadotcom The AMD and Beijing University Infineon, Richtek and System General HP and Compaq

Question Four Multinational Organization The multinational organizations are increasing rapidly in the business sector and are also called as Multinational Corporation. The organizations are termed as

multinational when they have their business activities and operations in more than one country. Such companies have headquarters on the parent country and have branches or regional offices in various places. The researcher mentions some multinational organizations below.

y y y y y y y y y y y y y y y y y y y y y y y y y y

Reliance HSBC Motorola Audi Barclays Sony MetLife Toyota Prudential TATA Lebara Mobile Nokia ICICI Skoda Boeing RBS Apple Maggi Air France Mc Donalds Philips Nike Samsung KFC IHG Mattel

y Accenture y British Airways y LG MNCs and Globalization In the post modern business as well as in the global economy, the presence of multinational companies is inevitable. They have a great impact on the global economy. The MNC and globalization are mutually and directly linked. Globalization has helped and supported the companies to commence or expand the business operations to other parts of the world other than the home country. The globalization thus not only implemented the concept of MNCs but also increased the wealth of the countries and thereby improving the global economy as well. Global expansion strategies of MNCs The MNCs always look forward to expand their business operations and activities globally. This concept of international expansion by MNCs is the result of globalization. Hence, the MNCs develop strategies for global expansion. Some of the major MNCs international expansion strategies are given below. y y y y The international expansion strategy Global financing strategy International market expansion strategy The outsourcing strategy

Outsourcing Outsourcing has got much relevance in the post modern business sector. It is an act or process in which one organization giving contract to another organization inorder to carry out certain operations or business activities. The need for outsourcing arises in an organization when the house employees are unable to carry out the operations due to several reasons. The organization is benefitted by the process of outsourcing especially with the financial gain and other advantages as well. The usual tasks that are outsourced by the companies include payrolls, e-

mails and call centre. These tasks will be performed by the companies that are contracted with the master company. Such companies are specialized for performing in those concerned tasks assigned. This increases the quality of service as well as the efficiency offered by the master company and thereby able to satisfy their customers according to their expectations. Hence, the impact of outsourcing in the global business is huge. Virtual Organisation The concept of virtual organization is different and is one of the post modern business concepts as well. In virtual organization, the stakeholders and the world are allowed to participate equally. It is an important idea for the modern business environment and is motivated by the organizational patterns, economic realities in the organizations. It is all about the social behaviour of the organization, impact of technology in the social structure evolution, nature of work in the information age etc. Strategic alliance In the post modern business sector, the competition is so high and therefore the sustainability of the companies are very important which would be possible with the support of other companies in the market and industry . Hence, the importance of strategic alliance is higher in the international business management. The strategic alliance is not just a merging of two companies or building relationship between two companies. But it is more than that which helps the companies mutually to support each other in their business processes and activities. Majority of the strategic alliances are of formal type relationships. Successful MNCs are listed below y y y y y Air France Boeing Toyota TATA Skoda

y y y y y y y y

Reliance Barclays Vodafone Lebara Mobile Philips Sony Apple Nokia

Reasons of success of MNCs y y y y y y y y Support from the local people Good management The local government support Operations are done on the basis of the culture of the host country Good reputation Good employee relations Good brand name Cost effective strategies

Reasons for the failure of MNCs y y y y y y y Poor reputation Poor employee relations Expatriate remuneration Lack of local government support Poor management Lack of local people support Poor brand name

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