Sherry Walston Raynor
BUS 1200 Section 11
April 17, 2012
The Impact of Outsourcing on Management Style
Executive Summary
This report analyzes the movie “Outsourced” and how it paints a picture to those how are perusing careers
in management. It also explores the notion that today’s business leaders must be willing and equipped to
embrace managing in a foreign nation. It will also examine the influences that culture has on the way
business is conducted and the adjustment management must make in order to successfully manage in a
foreign environment.
Outsourcing
A variety companies today are in search of more economical ways of cutting cost. Outsourcing has
become a popular option for many companies. Outsourcing is the act of one company contracting with
another company to provide services that might otherwise be performed by in-house employees as
defined by Webster’s dictionary. Often the tasks that are outsourced could be performed by the company
itself, but in many cases there are financial advantages that come from outsourcing. Companies are
sending trainable positions to countries with the manpower and education to complete the tasked at a
fraction of the salary offered to American workers. This report will analyze the effects of outsourcing on
American management and Indian workers and culture.
Cultural Influences and Management
This report will explore how the five dimensions of culture studied by Geert Hofstede: power distance,
uncertainty avoidance, individualism and collectivism, masculinity and femininity, and long term and
short term orientation. Examples taken from the movie “Outsourced” and other research will compare
and contrast American culture and Indian culture and how these cultural dimensions influence
management and how business is conducted.
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The Communication Factor
Clear and understood communication is vital to managing any group of people. Understanding how the
country in which a manager is conducting business communicates verbally and non-verbally ensure that
the management will relay exactly what they intended to relay to their workers and to the community.
This report will also explore the differences in verbal and non-verbal communication in America and in
India using the research of Edward Hall on low-context and high-context cultures. This report will also
compare America’s monochromic culture and India’s polychromic culture.
Introduction
“Outsourced” is a compelling movie that humorously discusses the obstacles of managing workers in
India. The main character, Todd, finds himself in the predicament of having his company closing call
centers in American and opening a center in India instead. Todd’s management skills are put to the test
when he must train Indian workers to handle customer calls efficiently. He must overcome and embrace
the cultural and communication difference in order to be allowed to return home to America. This report
will reveal the methods Todd used to discover how to effectively manage his Indian workers. Hofstede’s
five dimensions of culture will be used to compare and contrast American culture and Indian culture. The
impact of these cultural differences on managerial styles will also be explored. Todd discovered the
importance of adjusting his verbal as while as nonverbal communication to suit the communication style
of India. He found himself making these adjustments after Asha, one of Todd’s Indian workers, reveal to
him that he needed to learn about India in order to better be able to communicate with and relate to his
employees at the call center. We will use Edward Hall’s research to do a comparison and contraction of
verbal and nonverbal communication in America and in India. (Jeffcoat, 2008)
Hofstede Dimensions of Cultural Values: America Verses India
Geert Hofstede studied the cultural differences among different countries. His studies discuss five
dimensions in which cultures can be compared. “The dimensions are power distance, uncertainty
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avoidance, individualism and collectivism, masculinity and femininity, and long term and short term
orientation.” (Hofstede, Culture's Consequences: Internationa Differences in Work-related Values, 1980)
1. Power Distance: America has a median power distance. In “Outsourced the power distance
seemed to be further apart at the beginning of the movie and became closer as the two cultures
began to work together. Todd felt that the India workers should just listen to his commands and
he did not value their opinion about how they felt about the work they were doing.
2. Uncertainty Avoidance: “The cross-cultural value dimension of uncertainty refers to the lack of
tolerance for ambiguity and the need for formal rules and high-level organizational structure.”
(Hofstede, Culture's Consequences: Internationa Differences in Work-related Values, 1980)
Americans have a tendency to want to have a plan and to know what is coming next. Todd was
hesitant to change his methods of managing because of the lack o f a plan or normality of the
situation. Indians in contrast are more acceptant of uncertainty because the reliance on their faith
in their gods. An example of this is when Todd gives the Indian workers the news that their jobs
were going to be outsourced to China. The workers were not upset but happy for the extra pay
and the opportunity to take a vacation. They believed in a god that brought an end to things in
order to make room for new things.
3. Individualism and Collectivism: America practices individualism. “Americans are concerned
with their bottom line and what is best for the individual and for the group as a whole.” (Ferraro,
2010, p. 110) Outsourcing is the perfect example of individualism. The managers of Todd’s
company were not concerned with the loss of worker job in America or in India. They just
wanted the call centers equipped with workers that cost them the least amount of money possible.
India in comparison is a collective culture. “They are concerned with the welfare of the
community and working for the good of the team.” (Ferraro, 2010, p. 111) Asha taught Todd a
valuable lesson about how to get the worker to work more efficiently by giving those help when
needed and making them feel part of the team. The workers discovered through Asha when each
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person had shorted call it affected the team reaching their goal of under six minutes a call.
Another area were Todd learned of the collective culture of India happened when he observed the
maid putting the leftover food over the wall for the disadvantage India families on the other side.
4. Masculinity and Femininity: “Both America and India are masculine cultures.” (Hofstede,
Masculinity and Femininity, 1998) In comparison, both countries prefer men in leadership roles
and see women as inferior. Indian women are treated more inferior than American women.
American women are encouraged to go to school and to work, when in contrast, Indian women
are expected to be wives and not work or attend school. Asha tell how she went against the
wishes of her parents and worked for the call center and went to college. Asha also excelled
when Todd made here assistant manager for her work with the employees.
5. Long Term and Short Term Orientation: “A major component of any constellation of values
is how a particular culture deals with time.” (Ferraro, 2010, p. 123) America has a short term
orientation. “Time is seen as a tangible commodity that must be used efficiently.” (Ferraro, 2010,
p. 123) Americans focus on the here and now and allow the future to be in the back ground. An
example of this from the movie is when the company chooses to move the call center to the
location with the lowest wages for the employee. They did not consider the long term effects of
their decisions. In contrast, Indian practice a long term orientated culture. They see time in the
long term. They are focused on the future. Their families come first in their live and they rely
heavily on tradition. An example of this is Asha marring someone she was arranged to married
rather than marring for love. Another example of this is Rajiv wanting to wait until he was
promoted to marry his fiancée.
Impact of Value on Managerial Styles
Ferraro states that “The international businessperson who is most likely to do well abroad is the person
who (1) has a realistic understanding of the problems and promises of international business, (2)
possesses a number of important cross-cultural coping skills, and (3) sees the world marketplace as
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providing vast opportunities for professional and personal growth.” (Ferraro, 2010, p. 166) Managers
must possess these qualities in order to be successful in other cultures. Todd had to discover these
qualities the hard way after trying to manage in India as he did in America. There were three area
affected by culture in “Outsourced”: training, hiring and firing, and salary compensation.
1. Training: Todd felt that he needed to Americanize the workers in India and not allow them to be
themselves. Asha had to show him how the Indian worker could meet the needs of the American
customers without losing their sense of self. Todd also had to train the worker American terms to
keep them from offending the customers. Indian worker needed incentive to encourage them to
work for the goal of a six minute call. Black and Mendenhall suggest that management training in
another culture include the following: Culture-general component, Mastering patterns of
communication, Cultural self-awareness, Culture-specific component, and Developing crosscultural skills (Black & Mendenhall, 1990, pp. 117-119) Todd had to learn through Asha how to
implement all those components into his training methods.
2. Hiring and Firing: The company hired and fired base on an individualist view of how to
conduct business. Their motivation was for their own bottom line and not for their workers.
3. Salary Compensation: The company used benefits to persuade Todd to stay with the company
because the American culture views these things as important. The company offer to pay Rajiv
an ample salary but it was not the money motivation but of being able to marry his fiancée as a
result. The company outsourced to pay the least salaries as possible.
Verbal and Nonverbal Communication
Edward T. Hall was an anthropologist who made early discoveries of key cultural factors. In particular he
is known for his high and low context cultural factors. In a high-context culture, there are many
contextual elements that help people to understand the rules. As a result, much is taken for granted. This
can be very confusing for person who does not understand the 'unwritten rules' of the culture. In a low-
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context culture, very little is taken for granted. Whilst this means that more explanation is needed, it also
means there is less chance of misunderstanding particularly when visitors are present. French contracts
tend to be short (in physical length, not time duration) as much of the information is available within the
high-context French culture. American content, on the other hand, is low-context and so contracts tend to
be longer in order to explain the detail. Highly mobile environments where people come and go need
lower-context culture. With a stable population, however, a higher context culture may develop. (Hall,
The Hidden Dimension, 1966)
1. India has a high-context culture. They are rational, collectivist, intuitive, and contemplative.
Their people emphasize interpersonal relationships. An example of this is that the unmarried live
with their parent as Rajiv did. Developing trust is an important first step to any business
transaction. According to Hall, these cultures are collectivist. Developing trust is an important
first step to any business transaction. According to Hall, these “cultures are collectivist,
preferring group harmony and consensus to individual achievement.” (Hall, Beyond Culture,
1976) An example of this is Todd having to offer incentives to workers and asking them what
they thought would help them work better. People in India are less governed by reason than by
intuition or feelings. Words are not so important as context, which might include the speaker’s
tone of voice, facial expression, gestures, posture—and even the person’s family history and
status. (Hall, The Silent Langauge, 1959)
2. Americans have a low-context culture. Americans are logical, linear, individualistic, and actionoriented. People from low-context cultures value logic, facts, and directness. Solving a problem
means lining up the facts and evaluating one after another. Decisions are based on fact rather
than intuition. Discussions end with actions. And communicators are expected to be
straightforward, concise, and efficient in telling what action is expected. Explicit contracts
conclude negotiations.
Monochromic or Polychromic Communication
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Edward Hall defines monochromic and polychromic communications as Monochronic time M-Time, as
he called it, means doing one thing at a time. It assumes careful planning and scheduling and is a familiar
Western approach that appears in disciplines such as 'time management'.Monochronic people tend also to
be low context. In Polychronic cultures, human interaction is valued over time and material things,
leading to a lesser concern for 'getting things done' -- they do get done, but more in their own time.
Aboriginal and Native Americans have typical polychronic cultures, where 'talking stick' meetings can go
on for as long as somebody has something to say. Polychronic people tend also to be high context.
Contrasting the two comparing western cultures vary in their focus on monochronic or polychronic time.
Americans are strongly monochronic whilst the French have a much greater polychronic tendency -- thus
a French person may turn up to a meeting late and think nothing of it (much to the annoyance of a
German or American co-worker). (Hall, The Silent Langauge, 1959) (Hall, The Hidden Dimension, 1966)
1. America has a monochromic culture. Americans do one thing at a time. An example of this is
when Todd’s drives to get their call times less than six minutes at any cost. Americans assume
careful planning and scheduling. Another example is Todd wanting to achieve certain milestones
in his career before starting a family.
2. India has a polychromic culture. Indians feel that human interaction is valued over time and
material things, leading to a lesser concern for 'getting things done' -- they do get done, but more
in their own time. An example of this is when Todd and Rajiv participate in Holy Day instead of
making it to work on time. Another example Rajiv making the comments about the glass was
going to be installed soon. It did not come until the company was leaving. Yet another example is
the importance of getting married over having a successful career.
Conclusion
Managers in the 21st century are face with the task of being able to be global managers. The managers
must adhere to the teachings of Hall and Hofstede to be able to prepare themselves for the cultures they
may face. The movie “Outsourced” is the perfect example of how not to manage abroad. According to
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Howard, 21st century managers need the following: “They must involve developing a broad perspective;
appreciating points of view other than one’s own; being able to balance contradictions and operate
comfortably in ambiguous situation; working effectively in cross-cultural teams; becoming emotionally
resilient, open-minded, autonomous, and perceptually aware; and being willing to make decisions in the
absence of all of the fact. These are the traits that leaders will need in a world that is becoming
increasingly more global and multicultural.” (Howard, 1992)
References
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Framework for Future Research. Academy of Management Review 15, 113-36.
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Ferraro. (2010). The Cultural Dimension of International Business. Upper Saddle River, NJ: Pentice Hall.
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Hofstede, G. (1998). Masculinity and Femininity. Thousand Oaks, CA: Sage.
Howard, C. (1992, June). Profile of the 21st Century Expatriate Manager. HR Magazine.
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