Communication in Business Essay Example | Topics and Well Written Essays - 2750 words

Communication in Business - Essay Example Table of Contents Executive Summary 2 Table of Contents 3 Terms of Reference 4 Overview of the situation 4 Analysis of situation 7 Solution &Recommendation 9 Forecasts and outcomes 11 Conclusion 12 Reference 13 Bibliography 15 Terms of Reference This assignment relates to the outsourcing operations performed by a Chinese company A Ltd for a US based multinational company. The US Company outsources its back-office operations and CRM (Customer relationship management) services to A Ltd. The American company finds the labour costs to be exceedingly high in US and hence gets its work done through the Chinese company A Ltd. This enables the former to save on the exorbitant costs arising from getting the work through indigenous sources. It works to the advantage of the Chinese company in the sense that new employment opportunities are created. China is the fastest growing country in the Asian region. However the country faces stiff competition from the companies involved in the outsourcing operations in India. In fact presently India is the favourite destination of the American and UK companies with regard to outsourcing of operations. There are various reasons that explain the preference of India over China. What attracts the western countries to this region is its talent pool. Moreover the cheap quality of labour that is available in these places makes it a win-win situation for the outsourcing companies (United States Agency for International Development, 2009). Overview of the situation China is fast emerging as an important outsourcing destination and is soon expected to give stiff competition to India in a matter of few years. The cost advantage that the clients can generate from outsourcing their work to the country is estimated at 70 percent of the salaries that the company has to shell out in US. However, there are things that a company has to consider other than the labour costs. This includes efficiency, reliability, work quality, communication skills, fle xibility and issues relating to culture which are equally important in framing an outsourcing strategy. With this the macro factors like geopolitical risks are also considered at the time of formulating an outsourcing strategy. China is often hailed as an important outsourcing destination on account of its low cost. In fact China is considered to be cheaper than India. In the words of Bryan Huang, Bearing Point Great China’s President, the service of an engineer costs approximately $4000 per month in US whereas this amounts to merely $500 per month in China. In fact in some places like Dalian or Xian the salary is close to $250 per month. In other words the cost is merely one-sixth or one- eighth in China. China is still in the nascent stage when it comes to its position in the outsourcing industry. The availability of talent pool is also a risk factor in the country. Even though there is abundant supply of cheap labour in the country the quality of the labour force is a seri ous issue. This is mainly due to emerging nature of the industry in China. In fact the companies face difficulties in hiring people having an experience in the sector. In terms of Individualism ranking the country is placed at 20, which is the lowest among all the other Asian countries. This implies that the people of the country prefer to live in ‘groups’ which indicates their preference for commitment and closeness. This has a