Lsr Moving Partly Aboard Commerce Essay

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A number of organisations have, over the recent years, taken a decision to move part of their organisation overseas. A common example of this is moving of call centres. With the increase in communications technology, organisation have found the location of the call centre has no impact on the effectiveness of the service. They have also found that labour costs are considerably cheaper in some overseas countries, and the move of the call centre has therefore made economic sense.

Such moves have also been the subject of complaints from customers in some situation. Customers have complained that the call handlers have made errors because of their lack of understanding of the UK geography and culture. Despite these difficulties, many organisations have still pursued the operation of call centre's overseas.

The LSR Insurance has recently decided to move it call centre to India. It has looked carefully at the experience of other UK organisations that have made similar moves, and is convinced that it can make the relocation a success. After some consideration it has decided that the approach will be the most successful if the call centre is run by the managers it currently employs in the UK. The reasons for this are:

One of the most common problems it has found other organisations have experienced is the understanding amongst employ of how the UK operates. It has compared organisations that have overcome this by training locally recruited employees with those who have overcome this by putting UK managers in place, and has concluded, and has concluded that the latter option is more effective in overcoming the difficulties.

LSR Insurance has no current links with India. It does not have branches there, and so has no employees in India. It is concerned about its ability to recruit effectively at management level in India, and has decided that it is not prepared the risk getting such important appointments wrong.

It wants to maintain closes control over the call centre from the UK Head Office. LSR Insurance has decided that this will be achieved more effectively if the managers are used to the procedures and approaches used within the company.

Having made the decision to go ahead with the move, the company has hit a significant number of problems. Firstly, there has been a very difficult period of conflict with trade unions because there will compulsory redundancies amongst the staff who work in the call centre that currently operates in the UK. This call centre will close.

Secondly, it has proved very difficult to find three managers (which is what LSR has decided is the requirement) from the LSR who are willing to work in India.

LSR Insurance had anticipated that there would be a large number of applications for the roles. They thought that managers would see this is an excellent step for career progression, and that there would be significant number of people who were interested in gaining experience of working overseas. It has not been the case. The HR manager believes that this is the result of a variety of reasons, including:

LSR Insurance has not appointed any expatriates to overseas roles before, and so there are no experiences from other managers in the company for potential applicants to draw upon.

This is a very new venture for the LSR. A number of organisations that have taken similar steps have had very difficult experiences. Potential applicants might be concerned that they will be associated with something which fails- which they will see as not helpful to their careers.

Because there have been no expatriate placements before, there is no example of what might happen to the managers when they return to the UK afterwards. Potential applicants may well be concerned that once they are out of the UK they will be forgotten about and miss good promotion opportunities.

No clear policy has been established about pay and benefits for the managers while they are in India. This uncertainty is off-putting to potential managers, and clearly, the prospect of attractive pay and benefits is not being used as an incentive to apply for opportunities.

To compound the problems, four senior executives of the LSR have recently spent one month in India observing the operations of a range of UK companies. Their observations and discussions have led them to become aware of three recurring problems. They are:

It has proved very difficult to get Indian employees to work effectively in teams alongside UK employees. Again, the reason for this is not really known - and again, it could be a feature of differing levels of seniority between UK and Indian employees.

The UK managers have tried to impose the procedures that they have been used to when working at LSR.  In some areas this has led to misunderstanding or even conflict.

In the light of all these difficulties, senior management within the UK have seriously questioned whether moving the call centre is the right way forward. However, they have already announced their decision, and have already served redundancy notices on existing UK call centre staff. Although they now realise they should have researched the proposals more thoroughly before they started, they think they have no option but to go ahead with the plans.

Culture, in the form of a family tradition in business and strong family ties, has an impact on business entry motives, on the financing of new start-ups and on the nature of business chosen. Thus, the East African Asian entrepreneurs, most of whom have a family tradition in trading, chose self-employment because of this family business tradition, tended to rely heavily on family finance at startup and own businesses engaged in domestic or international trade.

Are there differences in culture between the UK and India? If there are, what impact might these have on the workplace?

The influence of culture on entrepreneurship was first emphasised by Max Weber at the beginning of this century. As Weber famously argued, Protestantism encouraged a culture that emphasised individualism, achievement motivation, legitimation of entrepreneurial vocations, rationality, asceticism, and self-reliance. This ethic was a fundamental element of the spirit of modern capitalism (Weber, 1976). However, Weber felt that this ethos of rational individualism was absent in other spiritual traditions. For instance, he argued that a rational economic ethic would not develop in Hinduism owing to its belief in the caste system, fate and rebirth, excessive ritualism and reliance on magic (Weber, 1958). Culture is greatly influenced by religion since religion determines a person's basic values and beliefs. Hofstede (1991), on the other hand, argues that religion alone does not shape culture.

Culture may be defined as a set of shared values, beliefs and norms of a group or community. Hoftstede (1991, p.5) defines culture as "a collective programming of the mind which distinguishes the members of one group or category of people from another". In other words, he regards culture as a collective phenomenon that is shaped by individuals' social environment, not their genes. Cultural differences are the result of national, regional, ethnic, social class, religious, gender, and language variations. Values are held to be a critical feature of culture and cultural distinctiveness. Hofstede's research shows how national culture affects workplace values across a range of countries. However, his study ignores the existence of different cultural groups within a country. In the context of immigrant entrepreneurship, several scholars have highlighted the impact of different ethnic group cultures on entrepreneurship.

They emphasise the importance of values like thrift, close family and religious ties and trust, which enable some immigrant groups to compete successfully in business (Bonacich 1973; Ward 1983; Werbner, 1990; Waldinger et al., 1990). Bonacich (1973) asserts that sojourners (temporary migrants) are more likely than settlers (permanent migrants) to be entrepreneurs since sojourning encourages thrift and hard work, in order to reach the long run goal of returning to one's home country. There is also a high degree of internal solidarity among sojourners, which helps them to compete with the rest of society. Bonacich recognises that all sojourner communities are not equally entrepreneurial or unified and points out that some immigrant groups like the Jews, Armenians, Chinese and East African Asians are very similar to each other in terms of their economic role in host countries because wherever these groups migrate they enter entrepreneurship and occupy intermediate or middlemen positions. In a similar vein, Herman (1979) argues that Macedonians in Canada were in low-level occupations because they did not have the cultural tradition or appropriate knowledge required to be in high-level occupations. Ward (1983) emphasises the interaction between ethnic resources, like cheap co-ethnic labour and cheap finance from the extended family, and opportunities offered by abandoned and forgotten ethnic markets, in stimulating entrepreneurship.

What approaches to payment for the UK managers would you consider, and what would you recommend as the best approach to adopt?

The use of expatriates has grown in conjunction with globalisation and the subsequent extension of company operations beyond traditional domestic borders. In order to be internationally competitive, firms have had to rethink the way they transfer knowledge (such as company cultural values, management practices and operational expertise) into overseas locations. It therefore makes good sense to utilise expatriates who can carry this essential knowledge across borders into operations outside the parent country, particularly if they are at a `start up' phase.

One of the most difficult tasks in expatriate compensation is developing a policy that is deemed fair and equitable by potential assignees. Determining the appropriate compensation approach for an international assignment is the most important expatriate policy decision you have to make.

While there are several advantages to using expatriates on international assignments, including career development and providing the parent company with a greater understanding of local market conditions, extended use of these expensive staff, especially in sensitive local countries, will not prove as effective in the long term. They should instead be utilised as a means for empowering local managers.

Beyond cultural problems, two of the most important factors contributing to the failure of expatriate assignments are the inability of the manager's spouse to adjust to a different physical or cultural environment and other family-related problems. And although the impact of family on international assignments is becoming more common knowledge in both organisations and literature, there is little being done about it. A study of spouse adjustment to expatriate success (Black and Stephens, 1989) reported that only 30 percent of organisations in their study seek the spouse's opinion concerning an international assignment.

The final `expat expense' is compensation and benefits. The rule of thumb is that they will typically receive 3 times their remuneration from their parent country. Companies have become quite creative in the range of benefits and allowances provided to expatriates to encourage them in a new country. Some of the more typical items include: tax equalisation; motor vehicle; cost of living allowance (COLA); accommodation; school fees; large variable pay components; stock options; and a generous base salary.

Based on these three considerations (selection, training and remuneration), careful use should be made of these expensive staff. The implementation of expatriate programs shouldincorporate a strategy for the empowering of local management, which in turn will alleviate many long-term costs.

Employers expect expatriate hires to have company knowledge, industry know-how as well as working experience in the required role. Even more important prerequisites are leadership and decision-making abilities, communication and relationship building skills, coaching and mentoring people from within the organization, a strong cultural affinity and ability to adapt without compromising the organization's ethical and moral standards.

International benefits and compensation present a special problem since salary levels differ among countries. The development and coordination of compensation systems for expatriate (PNC or TNC) managers constitute a complex and more expensive task than that of HCN managers. Pay systems must conform to local laws and customs while fitting into global MNC policies. They must pay everyone who does the same work the same pay regardless of the host country compensation environment.

What issues might arise in setting up teams within the call centre, and how would you address them?

There might be problems that may arise in teams within call centres. It might be because of the differences each and every one has, in terms of culture, beliefs, and the likes.

This problem, however, may be solved through the right methods orienting them. They must have proper lectures or training on the beliefs and the religion of each group so that they may understand each other.

Team building is so common in a call centre which is led and organized by the human resource department. Team building is done to make each and every person in one team be bonded in terms of trust, faith, friendship, and learning experiences.

Whenever there will be a conflict between the two, there must be a formal investigation of what occurred. The human resource department should hear each side. These would exclude bias between the parties involve and would solve the problems on each side.

4.      What are the merits of sending an expatriate from the UK  to manage the call centre against recruiting management locally?

Sending someone from UK would be better to manage the call centre for the following reasons:

UK personnel are familiar with the know-about of the call centre. It is a fact that a person can manage well if he/she knows the system. Being a UK call centre means that they should know how to recuperate the business. They can relate on the needs and wants of the customers or clients. Being a manger means that you know how to train your staff with the products. Getting a manger from United Kingdom would help in demonstrating the right approach on the customers and clients that they would encounter.

In a worst case scenario, the UK expatriate can handle the customer or client. Some customers who will call may want someone who they can relate with. The UK managers can give them their needs when they handle their team properly.

They can transfer their learning to their subordinate that in time will be soon managers of their own branch or department.