A Case Study Of A Small Outsourcing Company
The issue came from the pressures against employee scheme of a small outsourcing company. The recent boom in the offshore business support beleaguered the domestic industry (Hitt, Hoskisson & Ireland, 2003). Cheaper cost of labor served as motivation for domestic firms to establish presence in developing countries. Thus, current employment opportunities became stiff even to graduate and experienced workers. Domestic employment became a competition among qualified applicants as well as current workers. Due to this happening, the small outsourcing company under review made sure that it kept its workers protected from external shocks.
One of employee schemes fostered to minimize anxiety of employees for possible downsizing through the establishment of tenure contracts. In return, the firm demanded all its workers at all levels to follow employee regulations and to pass periodic performance evaluation. The most demanding regulation is to follow each and one of them. Adherence is the only way that an employee will retain his/ her employment and is superior rather than the tenure contract. Operating over a decade, the company became a steward of status quo. Operations manual and other regulations are not been changed since its inception.
In this rate, the firm cannot exploit opportunities to grow and its biggest return is relies on operational survival. Although it opened at least two offices in India, its global framework has yet to be eminent. In a fast changing setting, employees tended to shoulder the inadequate response of the company and the ones who are severely affected. For the company, it felt that it is on the right track as revenues are increasing although at constant/ falling rate while one of its foreign office is bound to close as a cost-reduction effort.
Seemingly, the company failed to realize that it is loosing precious human resources. Ramifications of the Issue For an outsider to the outsourcing industry, the issue presented is a shocking truth as case studies of global companies taught in classroom are molding its employees favorably. Strict rules applied to workers still exist today largely observed in the strategies of the “relaxed” sector that are characterized as being small, informal and sometimes underground organizations (Dooley & Johnson, 1995).
But their inability to adopt best practices for human resources management has its invisible hand impliedly returning the favor for managerial failure. Having rigid formal rules in the company have a bundle of negative impacts to employee performance. This includes loss of confidence, lack of creativity, inability to work efficiently, minimal organizational loyalty and treating managers as lieutenants. When employees cannot breathe due to tight control to their actions, they may likely find difficulty in working at their tip-top shape (Brunning et. al. , 1997).
As a result, the firm will not obtain the optimal level of performance which is triggered by high employee turnover. In the case of the small outsourcing firm, the stagnant revenue is caused by lack of innovativeness while closure of foreign office is caused by incapacity of home-based regulations to consider cultural differences. In these stances, the root of the problem is the deliberate disregard to workforce diversity of the company. The business operations is cloaked with totalitarianism rather democracy. Is corporate politics more important than attaining corporate objectives?