The focal point of this assignment is to critically review the article, “Will you Survive the Services Revolution?” by Uday Karmarker published in harvardbusinessonline, School of Management at the University of California, Los Angeles in 2003.
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The focal point of the article is to look into the financial scenario today that are deciding to outsource previous in-house jobs to individuals overseas with equivalent skills and abilities that live where the cost of living is less and, thus, will accept much lower salaries. Therefore, the corporations are getting the same work done, often with the same quality, for substantially less cost. These decisions touch on many ethical concerns–the obligation the corporation has to current employees, the communities it will affect, the fairness of wages, the concern for stockholders, etc. (Lamb, 224)
Globalization is a big word today and one that has changed the way we look at and understand things around us. What is actually globalization? What do we understand by this word? Globalization is simply the predisposition of the economy through business, knowledge through technology and thought through philosophy to spread globally. Globalization can also mean the process by which this happens. (Lamb, 214)
This term is almost synonymous with intertwining of markets and economies without any consideration for physical border or legal restraints and the most influential effect of globalization is certainly the impact of outsourcing. The author, Karmakar, himself indicates, “The work ahead will require proactive, far-reaching, often draconian changes, focusing on customer preference, quality, and technological interfaces.” (Karmakar, 1) Surely, there is merit in this thought process.
This formulation was observed in the activities of Nike. With enhanced production induced by market demands Nike decided to outsource its manufacturing units to South Asian countries like Korea and Taiwan. This is because there is practically no competitive advantage in terms of pricing with other competitors of the market. Therefore, it would have been impractical and illogical to invest capital in a new manufacturing unit. The option was to outsource the production to comparatively low salary countries. This move was one operational formulation that helped Nike to gain much more profit and market share as production was achieved under lower cost margin. (King, 121)
It should mentioned that Nike behaved quite ethically when confronted by human right activists and media by reorganizing and implementing humane approaches to its out sourced factories like creating better working conditions, restricting working age limit to a minimum of 18, allowed independent monitoring, induced research funding, providing education and implementing small business finances. However, in terms of working hours and leave schedule there were no changes and the sweatshop continued. This ignited protest all over the western world urging buyers to boycott Nike’s products thus affecting the company in a bigger way. (King, 122)
However, the three prime stakeholders of Nike at the present day could be enumerated as China, Taiwan and Vietnam. From the perspective of Nike it is obvious that the company makes a huge profit margin by the dint of low cost per item whereas from the stakeholders’ point of view relation with Nike means constant source of work with comparatively better and secured payment mode. (King, 125) These low income group countries make the most of the value rendered by US dollar and thus receive a better return of their investments. This return becomes even more vital with the low living standard of these countries thus the marginal utility of the value gets even more heightened. Thus, it could be seen that the relation between the stakeholders and the company is bilateral and beneficial for both the parties. (King, 126)
Coming back to Karmarker’s article it can be stated that the organizational outsourcing provision should meet comprehensible contractual social requirements and its application related to social events. Companies should educate new employees in social concepts and trends in social to improve their knowledge of social issues, trends, techniques associated with the integrity, confidentiality, and accessibility of information resources on social systems related to social events of an organization.
Dealing under such parameters, the text by John Hood by the name Management systems would become very important article to evaluate and analyze the current as well as the future trend of the industry in relation to society. (Lamb, 249)
It can always be stated, in conclusion, that events should make available to its employees the base for applying best practices to the social requirements of an organization related to social events. The employee educating procedures should include lecture, discussion, and exercises to help the employees in improving their understanding of the predicament of securing organizational information in the vibrant environment that has been created by global connectivity and social related to organizational culture and national culture. (Lamb, 243)
The companies should inevitably provide education in social concepts related to marketing events and trends in social system to employees like administrators, network administrators, social events systems social officers, social events systems social managers in government or private sector organizations, policy makers, systems engineers and systems developers, who are directly responsible for company’s physical and visual social and progress. (Lamb, 243-245) Thus, this author is completely aligned with the presumption of Uday Karmarker presented in the article.
Karmarker, Uday; “Will you Survive the Services Revolution?”; harvardbusinessonline: School of Management at the University of California, Los Angeles; 2003.
King, H; Fiscal Fitness Today (Dunedin: HBT & Brooks Ltd. 2005) pp 126.
Lamb, Davis; Cult to Culture: The Development of Civilization on the Strategic Strata. (Wellington: National Book Trust. 2004) pp. 243-245.