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:
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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:
Always on Time
Marked to Standard
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.
The dramatic expansion of the call center industry is a international phenomenon, fueled by development in information technologies and the steep decline in the expenditure of voice and data transmission for the last two decades. As a fraction of this global industry, call centres in India have gone through impressive growth in the last five years. They produce seventy percent of the income of the Indian Business Process Outourcing (BPO) industry, as said by estimates by Mckinsey (www.nasscom.org).
This fast growth has also carried on managerial challenges with retention of workers and managers with the essential skills and capabilities to give excellent service. This report focuses on these critical human resource matters and depicts systematic benchmarking information for managers.
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.
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.
Indian English is not like American English. Indian enunciations can sometimes be complicated for Britons to comprehend. And there are dissimilar Indian accents. In addition, Indians often make use of a side-to-side head gesture to signal understanding rather than disagreement.
The various differences in culture of UK and India affect the operations of the call centre. Some customers/clients who calls want to talk with someone that they can relate and understand them easily. Because of the differences, the ones handling the calls cannot relate instantly with the customer inquiring.
There was no any branch of LSR insurance in India and this will be the first. There is no policy on compensation and benefits regarding the stay of managers in India. It has been evaluated by managers that Indian people are very hard to work with as a team. The procedures that LSR managers where used to while based in UK has been very difficult for Indian people to adjust to.
Myers and Tan (2002) found wide usage of 'national culture' models by many IS researchers, resulting in narrow, simplified perspectives on the effects of national culture. Their review of the IS literature on national culture shows how the concept of national culture was taken for granted by many IS researchers. They criticized the conceptualization of national culture models proposed by Hofstede and other researchers. They proposed a research agenda inviting researchers to develop better lenses through which to move beyond simplistic treatments of national culture in order to investigate the dynamic and complex effects of cross-cultural diversity for the management of today's global organizations. This study has been an attempt to move the field in the direction proposed by Myers and Tan (2002) and Gallivan and Srite (2005). Our model of culture provides a more nuanced and refined framework to study the impact of cross-cultural differences on global work.
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Huang and colleagues (2003) argued, the role of corporate culture, and corporate subcultures, in global work requires much more serious consideration. Although there is extensive literature on corporate culture and adoption and use IT in organizations (Gallivan and Srite 2005), the learning from these studies have not been incorporated in the study of global virtual work. the construct of workplace culture is crucial for a more comprehensive understanding of the factors that impact global work, yet there is little research on this construct in the IS literature. Since our conceptualization of workplace culture is based on the study of just one multi-national firm, the contextual variables we have identified need to be validated in other settings.
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.
Several advantages to using expatriates on international assignments:
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.
Two of the most important factors contributing to the failure of expatriate assignments:
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 should incorporate 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.
The rule of thumb is the best way of getting expatriates to stay in the company. It will be beneficial to them and the offer will best suit their situation.
International benefits are important to maintain a manager. The best way is through expatriates. Expatriates should take into considerations the cost of living allowance (COLA), housing allowance, relocation allowance, education allowance, home leave allowance, and hardship allowance
Although most call center managers would agree with this statement wholeheartedly, it sometimes proves difficult to justify additional investment into an entity that is typically thought of as a cost center. The TARP (1997) study attempts to quantify some of the revenue benefits associated with effective service delivery.
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. But the main problem is in the compensation side.
Going Rate Approach (also referred to as the Market Rate Approach)
The advantages are first, equity with local nationals. Here, the market rates will be applied to them. It is fairer since the basis of the compensation package will still be on their country where they are based. Second is simplicity. Third is identification with host country. Last is the equity among different nationalities.
The disadvantages of this approach are first, variation between assignments for same employee. Second, variation between expatriates of same nationality in different countries. And lastly, potential re-entry problems.
Balance Sheet Approach (also known as the Build-up Approach).
The basic objective is to 'keep the expatriate whole' through maintenance of home-country living standard plus a financial inducement to make the package attractive.
Home-country pay and benefits are the foundations of this approach
Adjustments to home package to balance additional expenditure in host country
Financial incentives (e.g., expatriate/hardship premium) added to make the package attractive
Most common system in usage by multinationals
Advantages are as follows: equity, advantages between assignments and expatriates of the same nationality, facilitating re-entry, and ease in communication with employees.
Disadvantages are first, can result in great disparities between expatriates of different nationalities and local nationals. It can be complex to administer. Lastly, it may entail difficulty to attract human capital.
The two main options in the area of international compensation stated above can help with the expatriates. The two have their own advantages and disadvantages. The Going Rate Approach may be the best choice since it is base pay and benefits may be supplemented by additional payments for low-pay countries.
Call-centres are very difficult to handle especially when it is not based on the home country. Callers may not be comfortable talking to someone, for instance a foreigner, who cannot relate to them. Studies across countries, however, acknowledges that proper training would help in the operation of a call centre. Though at first, people working from the call centre may not be able to adjust easily, proper training would be a very big help for both parties.
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.
It will also be easy for the UK call centre to train the Indian staff with regards to company policies, culture differences, and other matters that may affect their customer service. Even if you train one Indian staff for him/her to train the other staff, it is best if it will be given by UK personnel itself. This way, there will be no matters left and the training would be complete.
The objectives of international compensation are that it should be consistent with the overall strategy, structure and business needs of the multinational. It must work to attract and retain staff in the areas where the multinational has the greatest needs and opportunities, hence must be competitive and recognize factors such as incentive for foreign service, tax equalization and reimbursement for reasonable costs. It should facilitate the transfer of international employees in the most cost-effective manner for the firm. And, it must give due consideration to equity and ease of administration.