1. How has the global economic downturn, discussed in the opening profile and throughout this chapter, impacted jobs outsourcing in the BPO industry? The global economic downturn has impacted jobs outsourcing in the BPO industry as it has helped to be one of the largest job creators in India. Due to this, many companies had to increase their operations output and therefore employ more and more people to keep up with the expanding trend. One of the major impacts, being growth and maturity, had an effect on the BPO industry and contributed to the outsourcing companies and continued growth of the industry. The IT and BPO outsourcing boom created a huge impact in the Indian economy and it increased the IT salary, cost of living, real-estate price and eventually it increased the outsource cost for many companies.
Job outsourcing seemed to be the only viable option as global economic downturn had created many problems when it came to funding and financial institutions. There needed to be cut backs in order to keep things afloat and most companies would see that job outsourcing would solve at least one of the many problems involved in the economic downturn. Not only does it mean that it will save companies in the US and UK money, by offloading jobs abroad for cheap labor, it also means that it’s giving countries like India and Philippines the opportunity that is needed to secure a faster growing economy and generating much needed jobs.
The global economic downturn provided merges and many acquisitions for the BPO industry and helped to create certain flexibilities for some companies which helped with resource management. The main reason why the economic downturn has impacted on job outsourcing in a major way is because it is cost effective and helps companies concentrate on core areas. It also contributes to improvement in productivity 2. referring to this chapter and this case, discuss the general trends in the globalization of human capital.
3. What are the effects of the Indian government policies on the Indian BPO industry and on MNC decisions regarding locations for outsourcing jobs 4. How does this case highlight the threats and opportunities facing global companies in developing their strategies?