Koninklijke Philips NV has faced criticism for relocating much of its product design and manufacturing to China, with some observers warning that political upheaval or an economic downturn in China would result in a very costly slowdown in Philips’ core business activities.
Imagine you are the head of a successful Australian-based information technology company that has offshored your customer service department to India. Many of your Indian support engineers are also capable web developers who could significantly reduce your labour costs by taking over certain product development responsibilities.
1) Would you consider moving product development to India? Explain your answer. ( minimum 150 words )
2) What are some potential costs and benefits? Elaborate your answer. ( minimum 150 words )
Outsourcing your work is a very big and important decision for any organisation as it involved huge amount of cost allotment and decision making power to be handled. Once outsourced, a company is also in the risk of losing their control and innovation by the company to which the work is being outsourced. Thus, all the details and information should be beforehand checked for making a particular decision.
1. Yes, I would prefer moving my product and web development to India. We all know the talent and idealistic approach of India and how innovative they are in the IT Sector. Also, Many of the software engineers in India have skillset which will help out company to produce better, thus outsourcing the work is not a bad idea. Although, few pointers like the cost and labour benefits, employee relations and various other factors should be kept in mind before making any decision. A whole study analysis would be done about the country, the labour union, the labour laws, the employee turnover rate etc. The company will also check the available skillset is present or not. The employees who are ready to work are in the sufficient amount to be allocated the desired work. The company should also have to keep a check on the controlling power of the company so that it won'y dilute.
2. Offshoring the work is the best technique to enhance your creativity and benefits for the parent company. Many cost benefits and other benefits can be seen by offshoring the work to India. The labour laws and the labour rate is comparatively lower than that of Australia that would decrease the cost for our company. The talent and IT skills is very well found in the employees. The population of India is young and talented. Once outsourced, the company in Australia can now focus on more important aspects in its headquarters. Employment Generation and good International Trade Practices can also be maintained. Good international relationships and other benefits can also be acquired by outsourcing the work.
Koninklijke Philips NV has faced criticism for relocating much of its product design and manufacturing to...
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