Introduction
Organizational management involves bringing employees together and working towards the realization of the organization’s goals and objectives. It involves planning, organizing, controlling, guiding and managing the firm’s staff.
The aim of the paper is to explore ways by which a company can manage its staff through outsourcing.
Discussion
Pfizer found out that the professional staff they employed was not doing the job for which they were employed. Instead of developing strategies and innovating, the executives were participating in menial jobs like researching, preparing PowerPoint presentations and the like. Upon realizing this, Pfizer’s senior director of organizational effectiveness Jordan Cohen turned to two outsourcing companies in India whose charges were not as high as those of other companies in the US like charged $215 per hour. This concept of outsourcing work to external firms is known as OOF (Office of the Future), when a Pfizer executive finds some task to be done, he simply contacts the firm in India (OOFs) and informs them about the task. They then agree on the cost of the project and once negotiations are done, the Indian begins the project (Vision, 2008).
This concept has great advantages to the executives and lower-cadre employees of the company. Benefits include time saving as tasks that were initially done in six months now take half the time to complete, this relieves pressure off the employees who have time to work on other important tasks and employees meet the deadlines.
The financial benefits are also remarkable, ROOF’s charges are as low as a tenth of the cost that other management consulting firms would charge, yet the work is of the same quality. The outsourcing firms also undertake financial analyses and market research projects at much lower costs and their work is impressive.
The employees at Pfizer have also benefited from the OOF idea, they now have more freedom to perform other core tasks for which they were contracted. They get analyses complete with PowerPoint presentations and this makes their work easier (Vision, 2008).
The OOF idea has been so successful with Pfizer that other US companies have adopted it through virtual assistants, customer service and web programmers.
The OOF approach has both positive and negative implications on the organizational structure. This approach promotes work specialization in a firm since the employees can perform the task for which they were contracted i.e. each employee does the task for which he/she is good at. There was no specialization before the adoption of this approach since the employees used to engage in menial tasks like Googling and making PowerPoint presentations. Once the outsourcing firms do these tasks, Pfizer employees are able to use these results to develop strategies and find innovative methods.
This approach makes product departmentalization rather difficult since the manager to whose control OF falls will find it difficult to check on the progress of the work going on. Communication between the OOF firms and the departmental head is not direct, unless he can travel to the country of residence of the OOF company. This limits the span of control of the managers and the company (Vision, 2008).
Formalization may also prove to be a challenge during the early stages of adoption of the OOF concept as Pfizer experienced. Initial projects carried out by the Indian firms were unusable and not correctly analyzed though this was because the Pfizer employees did not specify what they needed. A correction for this is by having test runs before full implementation of the approach.
Almost all types of organizations can apply the OOF concept whether they are in the initial stages of development or fully established. A start-up organization like a software firm can apply multisourcing- using both the outsourcing firm and staff from the service provider. This speeds up the time for launching their products, they can also hire more than one outsourcing firm to handle each aspect of the project, from design to sales and marketing.
Companies have stated that cost cutting is not the main aim for outsourcing, rather it also functions as a marketing strategy which can be applied by organizations.
Restrictions can however be placed on organizations that manufacture sensitive products like drugs and military wares. Outsourcing firms that are contracted by such organizations must be thoroughly scrutinized by the relevant authorities and must conform to set rules and regulations. Such regulations may hamper the outsourcing process.
Organizational structure dictates how an organization plans, categorizes and assigns tasks to realize their objectives. These structures identify the people that are involved in decision-making and how the decisions are realized. Organizational structures determine how authority is distributed in an organization. Issues such as whether the lower cadre employees should be involved in decision-making or just reserved for the departmental heads determine how the organization pursues its goals. The mode of assignment of duties and specific tasks to employees are governed by the organizational structures and determines how the employees work together to realize the company’s vision.
These structures therefore lead to a company’s efficiency and effectiveness towards the realization of the goals.
Conclusion
Organizational management is the basis of creating an environment that promotes the growth of an organization and its staff. Each organization requires a set of leaders with proper management skills to implement structures that will maintain the firm’s operational functions and manage the human resource effectively to ensure that the company retains or achieves competitive advantage.
Reference
Vision. (2008). Pfizer OOF Office of the Future Program. Web.