(ai)

Offshoring

Offshoring is the relocation of some part of an organization’s activities to another country.

Developments in technology have made offshoring feasible in many situations, such as back-office support for banking operations. Offshoring has grown significantly in recent years. South Afrara is one popular offshoring country, many banks and other companies now have service centers based in South Afrara.

(i) Offshoring offers a number of advantages to the Ayasco Banking Group.

Lower overall cost. Labour and other costs (e.g. premises) will be lower in South Afrara than in Ghanara.

Able to afford a more qualified workforce. Call Centre positions in South Afrara are often filled by better qualified individuals than would be the case in Ghanara.

Investment by host government. Infrastructure (for example communication) in emerging economies has often been heavily invested in by the host governments, in order to attract inward investment.

Economies of scale / centralized operations. The back-office operations will now be able to concentrate its back-office operation in South Afrara, where it already employs 3,000 people. Economies of scale are likely to result. Long-term moves such as this also encourage strategic planning.

Allows specialization. Offshoring back-office operations to South Afrara will allow the Ayasco Banking group to concentrate on the more complex side of its banking operations and grow its international business by allowing other staff to focus on specialized areas of operation. This is necessary in a global economy where competition is increasing.

On the other side of the discussion, managing operations based in another country will involve a number of challenges for the Ayasco Banking Group:

Risks associated with currency exchange rates. As an experienced banking group, this should be manageable. Exchange rates will always be liable to fluctuate, and this may erode some of the cost savings.

Language barriers and cultural differences. This may not be such a significant hurdle to overcome for Ayasco Group as they already have a large presence in South Afrara. There may be some resistance by customers based in Ghanara, due to perceived problems dealing with call centers based overseas.

Technical challenges. Staff in South Afrara will need to be properly trained to ensure that service levels in the offshored function do not suffer. Some functions may be retained at the call centers in Ghanara, so that customer service and satisfaction levels remain high.

Exercising control from a distance. Offshoring can lead to a loss of control, particularly over quality.

Dealing with different time zones. This is a challenge that a multinational company should be able to meet reasonably comfortably, although employees may find themselves inconvenienced by calls.                                                                                                                                                                                                                                                                                                                                            (aii)

Role of the Human Resources Division

The 500 employees of The Ayasco Group that aren’t redeployed following the offshoring will be dismissed through reason of redundancy. The Human Resources Division should have policies governing redundancy and ensure these are followed.

The HR Division’s role should include setting policies that cover areas such as:

Selection for redundancy – the criteria for selection must be clear and must be communicated as clearly as possible

Pre-redundancy consultation and clear communication of where and when redundancies are to occur to enable staff to plan their futures

Help with developing a CV and clear guidelines covering time off to attend interviews

Clear guidelines on redundancy payments, with clear communication of packages and negotiation where appropriate

Assistance with re-development of skills, re-training to learn new skills for a new career, or re-location of redundant employees

Careers advice, counselling and post-redundancy support

Redundancy is likely to be an unpleasant experience. The HR Division must ensure affected staff are handled with care and sensitivity.

HR should also play a part ensuring remaining employees remain motivated, and morale is as high as can be expected in the circumstances.

(b) The following are the four (4) models of marketing within an organization

Sales support: The emphasis in this role is essentially reactive. Marketing supports the direct sales force. It may include activities such as telesales or telemarketing, responding to inquiries, coordinating diaries, customer database management, organizing exhibitions or other sales promotions, and administering agents. These activities usually come under a sales and marketing director or manager.

Marketing communications: The emphasis in this role is more proactive. Marketing promotes the organization and its product or service at a tactical level. It typically includes activities such as providing brochures and catalogues to support the sales force.