Outsourcing
The Cultural Transformation
of India and Ireland
Outsourcing
What cultural norms, values and history
impact a contrasting perception?
Introduction
• Past, present, and future of
outsourcing and how it has
affected the respective cultures
• Eleven dimensions of
cross-cultural business
• Application to each country
• Adjustment of management style,
learning, and problem solving.
• Geert Hofstede Analysis and the
GLOBE study
Introduction
Two case studies focusing on outsourcing
• India:
• ICICI OneSource
• Tata Consultancy Services
• Ireland:
• Microsoft, Google, Oracle and Dell
• Amgen
India - Affective vs. Neutral
• Best described as a Neutral society in the way that its
people display affection and feelings
• Majority of Indians prefer to keep their feelings controlled
• No displays of affection openly and in public
• Traditional way to show affection and caring from one
partner to another is not by hugging, but doing things for
each other
India - Affective vs. Neutral
• Significant Western influence can be
observed in larger Indian cities
• People in south India are even more
traditional that the Northern Indians
• Indian Supreme Court issued a
warrant to arrest Richard Gere for
kissing Bollywood star Shilpa Shetty
at HIV/AIDS awareness event in
New Delhi
Ireland - Affective vs. Neutral
• Irish people best described as happy, open, with many fun
traditions
• Music and dancing are important factors of these traditions,
they share and enjoy them in public
• Like to party and the pub is the center of the cultural, social
and musical life
Ireland - Affective vs. Neutral
• More similitude to American culture than Indian culture
• Handshake is preferred greeting for women and men
• Men should refrain from being too physically demonstrative
with women
• Maintaining minimum personal space is important
• Touching, patting or hugging other men in public are
considered socially unacceptable
India - High Power vs. Low Power
• The Caste system
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Brahmins
Kshatriyas (shot-triyas)
Vaishnavas (vaysh-navas)
Shudras
• The Class system
• Lower class
• Middle class
• Upper class
India - High Power vs. Low Power
• Women
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Prominent place in the history of Indian culture
Birth and marriage rituals celebrated for males
Sixty percent are illiterate
Laws to protect women at the workplace
• Still face discrimination
• Geert Hofstede analysis
• Power distance score of 77 (high)
• Third highest masculinity score
Ireland - High Power vs. Low Power
• Caste system
• No caste system due to the belief in political, economic or
social equality
• Class system
• Working class
• Middle class
• The new middle class
Ireland - High Power vs. Low Power
• Geert Hofstede analysis
• Power distance score of 30
• Women
• Laws in place to bring equality
• No bullying policy
India - Universal vs. Particular
• Best described as “Particular”
• Gender also plays an important role when applying the
social norms
• Justice is not applied equally among all the members of the
Indian society
• Public rules are not defined by the law, but by following the
leaders and exemplary individuals for guidance
• Family is one of the most important factors
Ireland - Universal vs. Particular
• Best described as “Particular”
• Special attention at what is called the restoration of justice
• Northern Ireland implemented the Committee on the
Administration of Justice
• Justice system does not apply equally to citizens and
immigrants
Class Activity
India Game
Game
What country has one of the official top ten
vacation destinations in the world?
• India (Kerala)
Game
Which has an older civilization?
• India (3200BC)
Game
What is India’s population –
1 billion, 1.2 billion or 1.4 billion?
• 1.2 billion
Game
Pronounce an Indian word –
Balasubramaniumneelachandran
Game
How many kegs of Guinness are exported annually3 million, 6 million or 12 million?
• 12 million
Game
Which two entertainers are not of Irish descent?
- Colin Farrell
- Jennifer Connelly
- Pierce Brosnan
- U2
- Sean Connery
- Enya
- The Corrs
• Jennifer Connelly and Sean Connery
Game
How many Bollywood movies are produced per year –
1000, 1500, 1800?
• 1,000
Game
How many Indians go to the movies on a daily basis –
5 million, 9 million, 14 million?
• 14 million
Game
What is the cultural significance of St.Patrick?
• Conversion to Christianity in 432AD
India - High Context vs. Low Context Cultures
• High context culture
• Religion has had a big
influence on the culture
• Titles hold a strong meaning
India - High Context vs. Low Context Cultures
• Subculture
• Arranged marriages
• Hindus offer prayers to their tools of worship
• Subtleties
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Greet by holding the palms together and saying Namaste.
Remove shoes before entering a house
Eat food with hand
Unacceptable to point at someone with their finger.
Ireland - High Context vs. Low Context Cultures
Low context culture
• Big cultural divide between
people in rural and urban areas
• Religion plays an important role
on the Irish psyche
• Titles are relevant but never
directly related
Ireland - High Context vs. Low Context Cultures
• Subtleties
• Offensive to refer to the Irish as British
• Eire is the official name of the state
• Better to refer country as Ireland
• Subculture
• Pub culture
• Love traditions
India - Value Quality of Life vs. Value Materialism
• Family and community values
are very important
• Family values are strongly
influenced by ones job
• BPO (business process
outsourcing) industry is
changing the way young
Indians think
Ireland - Value Quality of Life vs. Value Materialism
• Ireland leads the world for
quality of life
• Group dynamic is more evident
in casual contexts such as eating
or drinking
• Family is at the root of Irish culture
India - Past, Present and Future
• Male children are highly desirable
• Shift in preference for female child
• Land of religious practice
• Hinduism, Jainism and Buddhism
• Caste system
• British Invasion
• Western Education
• Technology Shift
• Positive $ Negative Feelings
Ireland - Past, Present and Future
• Celtic settlements
• Trade, druidic religion
• St. Patrick arrived in 432 CE, most
of the Gaelic Kings converted to
Christianity as the primary religion
• New religion brought new
attitudes towards change
• Education, status and social
scene
• Ranks among the highest
educational participation rates in
the world at 81%
Ireland - Past, Present and Future
• More than 65% of students go on
to complete higher education
programs
• Over the past 50 years, Ireland
has had the highest economic
growth rate in the E.U.
• Study abroad programs
• Global outlook has led to movies,
sports and music
Web Site / Field Trip
ucam-productions.com
Case Studies
Reverse Outsourcing from India to Ireland
Introduction
• Background of Outsourcing
• Y2K bug
• Problems with Outsourcing
• Staff attrition
• Increasing costs
• Customers unhappy
Reverse Outsourcing from India to Ireland
Hindustan Computers Limited Technologies
• Fifth largest IT services company
• Has the largest BPO operation in Ireland
• Invested 16 million pounds in three different
expansions over last seven years
Pic
Reverse Outsourcing from India to Ireland
ICICI OneSource
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Ranks fifth among BPO firms in terms of export revenue
Invested five million pounds
Facing opposition from the locals
Hiring from the local population
The model used to set up the call center is identical to
the ones set up in India
Reverse Outsourcing from India to Ireland
• Polaris Software Labs Limited
• Leading providers of products and solution offerings in
the banking, financial services and Insurance domain.
• Hires only graduates from the top universities
• Develops its centers in three phases:
• Provides independent quality assurance
• Provide software development
• Provide round-the-clock customer service
Reverse Outsourcing from India to Ireland
Tech Mahindra
• Sixth largest software exporter in India
• Joint venture between Mahindra & Mahindra Limited
and British Telecommunication
• Created a center of excellence for business services
• Created 200 jobs thus generating 21 million pounds
over the next three years
Reverse Outsourcing from India to Ireland
Tata Consultancy Services
• Worlds largest and oldest provider of IT consulting
services and BPO centers
• Chose Ireland because of its high standards of business
excellence
• Presented with the UK trade and Investment special
recognition award
Why is Ireland a Preferred Country for Outsourcing?
The battle for outsourcing:
• One of the most popular countries for outsourcing throughout
the 90's
• Low corporate income tax rate and its flexible, educated, and
growing young workforce
• In the late 90s, other countries with much lower wages, such
as India, China and Eastern Europe became a more lucrative
option for outsourcing.
• Countries that outsourced to India experienced problems
because the quality of the job was not what they were
expecting
• Over the past decade, Ireland began to reclaim those lost jobs
and has become one of the hottest European economies.
Why is Ireland a Preferred Country for Outsourcing?
Offers more than just off-loading non-core activities or
functions such as call centers:
• Physical location - closer to North America than India
• English speaking country
• Closer to the culture of those countries with a significant
presence in outsourcing, specifically Western Europe and the
U.S.
• Began to apply consulting expertise to increase revenues and
reduce operation costs for foreign companies
Why is Ireland a Preferred Country for Outsourcing?
Accenture Ireland offers
four levels of outsourcing
1.
Technology infrastructure.
This is the basic layer. Companies
outsource their Information
Technologies activities to other
countries
2.
Business application.
Management and maintenance of
applications is hosted in a different
country.
Why is Ireland a Preferred Country for Outsourcing?
Accenture Ireland offers
four levels of outsourcing
3.
Business processes.
Technical and infrastructure
operation of the organization are
outsourced, but also the
business processes.
4.
Business transformation
Encompasses all of the above
layers.
Why is Ireland a Preferred Country for Outsourcing?
Represents a good outsourcing opportunity for transnational
companies with branches in other European countries
• Mid-size European companies in the same industry are
outsourcing similar functions.
• The host company supports these services for organizations within the
same industry on a completely secure and confidential basis.
• Better acceptance when jobs are being outsourced to the
European Nations instead of India
Why is Ireland a Preferred Country for Outsourcing?
Ireland’s strength in outsourcing has bypassed the limits
of the European borders:
• Microsoft
• Planning to spend $500 million to build new European data-processing
center
• The third massive data-storage and search-processing warehouse
• First 'mega data centre' deployment outside the U.S.
• Employs more than 1,200 people at three campuses in Ireland, its major
European base
• Oracle
• Invested £80 millions in a global Research and Development (R&D)
center.
• Hired 250 employees for this facility
• Google
• Planning to hire more than 500 employees
• Bring a total of 1,300 Google employees into Ireland.
• Dublin is headquarters for all of Google's business in the Europe, Middle
East and Africa (EMEA) region
• Biggest Google operation outside the U.S.
Why is Ireland a Preferred Country for Outsourcing?
Accelerated expansion has had its pitfalls:
• Dell had a difficult experience finding enough employees to
support its most recent expansion in the country
• Competing with other first world class companies like
Microsoft, Apple, and Pepsi Co.
• Dell found qualified talent in other European countries such as
Spain, France, and the Netherlands
Why Did Amgen Choose Ireland
to Expand Its Operations?
• In 2005, Amgen announced plans to
build a €1.3 billion manufacturing
plant in Cork, Ireland
• Country selection started with 20
possible countries
• Selection rapidly narrowed to three
countries: Ireland, Switzerland and
Singapore
• Tax benefits:
• Reduced its top corporate income
tax rate in 2003 from 16 percent to
12.5, placing it well below European
Union average of 30 percent and
U.S. rate of 35 percent.
Why Did Amgen Choose Ireland
to Expand Its Operations?
• Top U.S. pharmaceuticals firms, such as Pfizer, Eli Lilly and
Boston Scientific already have an established presence in Cork
• Qualified workforce to work in different levels of an organization
• Large pool of engineering resources and large subcontracting
networks that allows for timely completion of Amgen
manufacturing plans
• English speaking country - offers a great opportunity for optimal
communication
Ireland - Conclusion
Things to keep in mind with outsourcing
• As a citizen of that nation
• Family/tradition is key
• Equality/less reverence for titles
• As a company
• Expertise
• Tax benefits
• Less tolerance
India - Conclusion
Things to keep in mind with outsourcing
• As a citizen of that nation
• Family/tradition is key
• Titles are important
• As a company
• Cheaper labor
• Employees have
more tolerance
• Respect culture, religion
and traditions