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Global Communication Benchmarking

Essay by   •  December 25, 2010  •  2,633 Words (11 Pages)  •  1,442 Views

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Many companies today are looking at outsourcing as a means to improve profitability, but in doing so it is important to realize that the decision is often not an easy one. The decision would be classified as a nonprogrammed decision. This type of decision is made when a company has not previously made this type of decision and there are no guidelines or previous experience to follow. This is the hardest type of decision to make because if the decision is unsuccessful there can be significant consequences to the both the manager or team who implemented the decision and the corporation. Nonprogrammed decisions also tend to bring a much higher level of risk. Outsourcing in particular is a high risk area. Many times companies looking to outsource are doing so because they are having financial difficulties and need to reduce costs. In order to reduce the risk of making a poor decision, the company needs to make sure that it has done all of its research. A decision of this magnitude should not be made quickly or easily. It should be made through a well organized process that involves the stages of decision making. A DMAIC decision making process would be a great tool to use to help the management ensure that the decision has been well thought out.

Once a decision of this significance is made, it is important that a company has a well defined implementation plan. A well defined plan will not only reduce the risk, but it will also lay the ground work of communicating the organization changes to the employees and their representative unions. Outsourcing is looked upon as negative to employees and unions; it is important that companies looking to use outsourcing understand that. A well thought out communication plan can help to reduce rumors that lead to poor moral and misunderstandings. The more direct and honest communication that comes straight from management the more trust employees and unions will have with managements decisions. Outsourcing will change a company, it is inevitable and companies should not deny it. The company should not make decisions based on what is best for individual employees either. Companies need to make decisions based on what is best for the company and it doing so they should communicate why they feel it is the best decision. Overtime, the open and direct communication will foster a greater level of trust with the employees and will leader to a better relationship between the company and the union. Due to the world becoming one global economy outsourcing is a way of life and in some ways employees are no longer surprised when companies are considering outsourcing. I think they are primarily looking to be respected. For them the company is showing a great deal of respect when they communicate regularly.

In researching AT&T Wireless, Boeing, The Carlson Companies and American Express it is evident that there are many comparisons that can be made on their respective decisions to outsource. The decision to outsource for each of the four companies was primarily based on financial reasons. Each company felt that outsourcing would reduce costs and improve the company's overall profits. It is hard to deny that outsourcing can improve profitability when companies like American Express, who outsourced transaction processing, and have said they reduced transactions costs by 40%-50%. Boeing and The Carlson Companies also stated that the areas in which they were looking to outsource to have high level of technical skills. The Carlson Companies also said that they feel because they consider themselves a global company that they should be using global resources as well. In the articles researched each of the four locations were looking to outsource different areas. Boeing was looking towards manufacturing and engineering processes. AT&T Wireless wants to outsource its Information Technology functions and The Carlson Companies has outsourced technology and business-services. A&TT Wireless created three shared service centers to handle their transaction processing. Transaction processing typically includes accounting functions such as, accounts receivable, accounts payable, payroll, and general ledger.

Upfront communication seems to be the best way to decrease the concerns of employees and reduce the amount of rumors that will be spread. Carlson, American Express, and Boeing felt direct and honest communication was important. All three companies communicated honestly and often. These three companies were concerned about the wellbeing of their employees and set-forth a plan to make sure they understood the impact to themselves. Carlson also helped employees find other jobs, transferred them to the outsourcing company or gave them severance packages to help through the transition. AT&T Wireless fell short in communicating effectively to their employees. In this case, the employees were hearing a lot of rumors and were not getting straight answers. By the time they communicated the decision to the employees it was a little too late. The employee moral was already low and they had little trust in the decisions that were being made. Although Boeing communicated they still had some employee discontent. The employees and their union continue to be concerned but Boeing has continued to communicate that they do not plan to decrease from the current level of employment. Boeing has said they plan on increasing or decreasing the outsourced employees based on demand and leave the U.S. employment levels consistent.

Carlson Companies: Nate Green

Carlson Companies is a global leader in the marketing, travel, and hospitality industries. Ranked among the largest privately held corporations in the United States, Carlson Companies is based in Minneapolis, MN. Carlson-related brands and services employ about 170,000 people in nearly 150 countries and territories. Carlson Companies is on Working Mother magazine's 2001-2004 and 2006 lists of "The 100 Best Companies for Working Mothers," and Fortune magazine's 2002 list of "The 100 Best Companies to Work For." In 2006 Carlson was named one of the "Best Places to Work for GLBT Equality" by the Human Right's Campaign.

Carlson, whose brands include Radisson Hotels, T.G.I. Fridays restaurants, and Carlson Wagonlit Travel, negotiated with IBM to hand off a portion of its IT and finance operations to the vendor. Like Global Communications, Carlson executives believe by outsourcing they can save on overhead costs and improve the overall financial status of the company. The outsourcing company which maintains technology and business-services centers in India and other low-cost countries can operate

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