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Issues Of Outsourcing Faced By Sun Alliance Company

1580 words - 6 pages

IntroductionThis paper discusses the outsourcing strategy of Sun Alliance Company, which is a major telecommunication company in Australasia facing handsome profits after many years of sluggish growth and declining profits. The outsourcing of Information Technology Enabled Services (ITES) in India had a healthy impact on the company's bottom line. The company took a major review about its IT strategy which encouraged outsourcing in India. India is world's largest democracy and home to one billion people and also emerged as software powerhouse in global IT arena. The company operated in a highly volatile market characterised by hyper global competition and technological obsolescence. Outsourcing is defined as "procuring of services or products from an outside supplier or manufacturer in order to cut costs" (Brooks, 2004). This paper will argue that, in order to maintain the social and economic conditions of the country the company will have to lay more emphasis on corporate social responsibility (CSR). This particular case study traces that there is growing political row over loss of domestic jobs due to outsourcing.Problem identificationThe problem of Corporate Social Responsibility (CSR) poses an actual or potential threat to the organisation. In order to, maximise profits the company should make maximum use of its resources by implementing Corporate Social Responsibility which will leave an impact on the organisation. In this case study the company is violating human rights by ignoring the plight of local IT professionals whose rights are denied as the company is not taking into consideration the concerns of the society, and thus outsourcing Information Technology Enabled Services (ITES) for their own economic interests. It is important to address this problem as government and the local IT professionals will collectively protest against the company's social responsibility. Ultimately outsourcing is likely to damage the reputation and image of the company and leading to high declines in sales and profits.Critical AnalysisIT projects are generally susceptible to various types of risks including financial, legal and managerial control issues (Baccarini et al., 2004; Shi-Ming et al., 2004). The chances of risk factors are more likely when it comes to outsourcing IT services overseas. Outsourcing can aid a company's globalisation strategy or help alleviate skills shortages in the company's own country.Human capital theory can act, tandem with Corporate Social Responsibility (CSR) in human resources to develop a new company strategy that maximises company performance for shareholders. Thus, meeting the demands of corporate citizenship which can be done by employees outsourcing and bidding for positions themselves, assistance for graduates to upgrade their knowledge can be made available and placement schemes for employees can be used for staff not kept on after outsourcing (Hemphill, 2004).Most relevant to the current study is research related to...

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