Respond to…

Change is quite common in the business environment and occurs frequently in organizations. Change can produce positive or negative outcomes. Key reasons for change are exist in outsourcing, technology, and restructuring through downsizing or rightsizing. As a point person in my department/division who would be receiving notice of a change factor that involved outsourcing, there would be barriers that would need to be addressed which would challenge the change initiative and there are steps that I could take to help facilitate a successful change process.

Outsourcing is a process that organizations utilize to help increase their profitability by lowering organizational costs by sending the production of goods and customer services they provide, to be performed or offered by an outside organization, usually in a developing country where labor, resources, and materials are cheap. According to Palmer, Dunford, and Buchanan (2017), developing countries are more attractive manufacturing and call centers because their labor costs are minimal compared to the U.S. and other countries. Outsourcing, however, can be beneficial for organizations as there are issues and resistance to this type of change by employees, and other stakeholders, such as the consumer or customer.

There are those who believe that outsourcing is a benefit that will help a company save money and increase its profitability. Outsourcing is commonly viewed as a new version of global trade and even though it produces both losers and winners, it also fosters productivity and profitability. Conversely, there are those who believe that outsourcing is damaging and ruins lives. Some of the barriers that could pose challenges for this change initiative include the loss of domestic jobs; competition from laborers in foreign countries; fear of globalization; reduction in quality of materials and products produced in foreign countries which lack or have inadequate safety, health, and hazardous materials policies, regulations, laws; complications from illness, injury or death from products produced in foreign countries; communications issues, language barriers, and cultural issues; public protest or condemnation for moving jobs out of the U.S.; and domestic and foreign government regulations and legislation are among many other issues. According to Porter (2012), foreign trade and expanding globalization sparks fear in Americans and has grown exponentially over the past 20 years due to competition from workers in developing nations. These barriers have the potential to completely derail or postpone the change initiative of outsourcing.

Even with the issues and barriers that can arise when attempting to initiate a difficult change process such as outsourcing, there are steps that can be taken to minimize these issues and to help facilitate a smooth and successful change process. According to Mullins (2011), a successful outsourcing can be accomplished in 10 steps:

1. Centralize communication
2. Treat them like children
3. Summarize the desired outcome
4. Be graphic
5. Ask for confirmation
6. The 20% rule
7. Make a sandwich
8. Rinse and repeat
9. Give a final exam
10. Reward your team

I would, however, do things a little differently. I do believe that communication is key in any situation, so being honest and transparent and not throwing any surprises to the employees will go a long way in maintaining trust and a positive relationship. When American Express says “treat them like children,” they are essentially saying to be as descriptive and detailed as possible, I also agree with this, but I would never say “treat them like children,” as that would undoubtedly come across the wrong way. Giving a summary of the desired outcome would be beneficial so that the employees and stakeholders could see the big picture. It is important that leadership present the vision for this change initiative as well as for the organization in the long run. This would also include defining what the outsourcing change initiative is, who will be affected, and what consequences this change will produce or any side effects. Step four says to “be graphic,” but that was already included in step two, but it does not hurt to be too thorough in making sure that the ideas and information are received properly, without distortion and understood and comprehended. This is where asking for confirmation of information has been received. I would also take this opportunity to ask for feedback, suggestions, concerns, fears, issues, etc. The 20% rule speaks on ensuring that after 20% of the initiative is complete that a progress report is given and what is remaining, so I would not use steps 6 through 9, as these have to do with after the outsourcing change has been initiated. I would, however, include the final step of rewarding the team. Giving positive reinforcement, inspiring, motivating, and empowering employees will go a long way in keeping them happy, worry and stress-free, and in enabling job satisfaction. With outsourcing many times there comes the loss of jobs or even departments, which I feel is one of the biggest issues or barriers that occurs with outsourcing. I would do my best to try and find alternative positions for these employees within the company.

References

Mullins, W. (2011). 10 steps to successful outsourcing. American Express. Retrieved from

https://www.americanexpress.com/en-us/business/trends-and-insights/articles/10-steps-to-successful-outsourcing/ (Links to an external site.)

Palmer, I., Dunford, R., & Buchanan, D. (2017). Managing organizational change: A multiple perspectives approach (3rd ed.) [Electronic version].

Porter, E. (2012). The folly of attacking outsourcing. The New York Times. Retrieved from

https://www.nytimes.com/2012/08/08/business/economy/in-outsourcing-attacks-tired-rhetoric-and-no-political-leadership-economic-scene.html (Links to an external site.)

Respond to…

A change initiative that has happened in many organizations scenarios is outsourcing. Some organizations have closed their businesses inside the United States and have outsourced in different countries. Whether that is for the less pay of the employees or for the overhead cost of the building. It might be the best way for the organization in order to make the money. When this change initiative may happen, the employees that work in that building may get upset due to the fact that they are going to lose their jobs potentially.  This is a major barrier and the organization must be able to attack the resistance head on. So, in order to do this I would communicate as thoroughly as possible in order for the employees to understand why the change is occurring and at the same time try to get most of them a job else where either inside the organization somewhere else or with another organization. It can be difficult to face the change, but if the company is trying to save money and still is trying to grow there business outsourcing may be the only way for them to succeed.  There are five beliefs that an individual may be ready and those are discrepancy, appropriate, efficacy, principal support, and valence.  (Palmer, 2017, pg 122).  If the organization is able to understand these five beliefs and be able to understand where the employee’s minds are at with the change. They are then better able to assist the resistors and help them feel more comfortable as the change is occurring. 

Palmer, I., Dunford, R., & Buchanan, D. (2017). Managing organizational change: A multiple perspectives approach (3rd ed.) [Electronic version].