Monday, May 16, 2011

In the concept of outsourcing in the context of current business scenario.

In the concept of outsourcing in the context of current business scenario. Give you opinion outsourcing with the help of suitable organizational instance.

Ans. The Indian industry particularly after independence for over 40 years had been controlled by the economic policy of the government. They policy was influenced by political, economic reasons and also with an idea to allow industries to grow and meet the market needs. There were governmental restrictions on licensing, foreign exchange, import, encouragement to public sector. These restrictions impaired the growth of economy resulting in huge fiscal deficits, crisis in balance of payments, fall in foreign exchange reserves, growing foreign debts, trade deficits resulting in decline of India’s credit worthiness in International Market and The International Monetary Fund which had advanced huge loans to the Indian Government, imposed drastic conditions for new loans. This resulted in the liberalisation of government’s economic policy. As a result steps taken by government include deli censing of industries, removal of restriction of foreign investment, relaxation of Foreign Exchange Regulation Act and Monopolies and Restrictive Trade Practices Act MRTP; a policy of privatization of certain public sector undertakings, curtailing their role, liberalisation of imports, lowering of tariffs introduction of new exchange rate system. Economic reforms include monetary, fiscal reforms, control on inflation, controlling subsidies, restructuring public sector and exit policy.

a) Impact of the changed policy: It changed the direction of the country from socialistic pattern to market economy. The effective change that occurred were intense competition entry of new multinationals, with increasing stake of their participation, competition intensification due to liberalisation of imports. Frequent changes in international environment and vulnerable Indian market had impact on competition. These changes necessitated the new concepts of total quality, productivity management cost reduction, restructuring the organisations.
b) Impact of Human Resource Management: The new economic policy has adverse impact on employment particularly so because of recessionary conditions, and import policy. New employment opportunities in the organized sector have reduced and the employers and cutting downs the employee numbers to remain competitive in the market. The modern technology requires employees of different skills, with high degree of dedication. The existing employees with outdated skills and knowledge will have to be retrenched and reduced as they will not effectively contribute to the new techniques, machines and process. This has resulted in the government of India introducing and permitting exit/Golden hand shake policy to get rid of unwanted manpower.

a) Definition: Human Resource Management is concerned with the people who work in the organisation to achieve the objectives of the organisation. Ti concerns with acquisition of appropriate human resource, developing their skills and competencies, motivating them for best performance and ensuring their continued commitment to the organisation to achieve organizational objectives. This definition applies to all types of organisation, e.g., industry, business, government, education, health or social welfare of the people.
b) Scope: The scope of HRM is vast. All major activities in the working life of the employee from the time of his entry into the organisation until he leaves, retires come under the purview of human resource management. The most important activities undertaken are [1] Planning, job design, job analysis, procurement, recruitment, selection, induction, placement, training, and development [2] Compensation, rewards, benefits, retrial benefits, medical and, health care [3] Motivation – Motivational aids, bonus, incentive, profit sharing non-monetary benefits are esteem satisfaction, career development, growth, decision making, delegation of authority and power, promotion, etc. [4] Employee Relations – Grievance handling participation, collective bargaining and other aspects of cordial relations conducive to mutual understanding and trust. [5] Employee evaluation and performance improvement, Human Resource, Audit; and Human Resource Accounting.
c) Objectives: The objectives of human Resource Management are:
i) To provide, create utilize and motivate employees to accomplish organizational goals.
ii) To secure integration of individual and groups in securing orgnaisational effectiveness.
iii) To create opportunities, to provide facilities, necessary motivation to individuals and groups for their growth with the growth of the organisation by training and development compensation.
iv) To provide attractive, equitable, incentives, rewards, benefits, social security measures, to ensure retention of competent employees.
v) To maintain high morale, encourage value system and create environment of trust, mutuality of interests.
vi) To provide opportunities for communication expression, participation, appreciation, recognition and provide fair efficient leadership.
vii) To create a sense and feeling of belongingness team spirit and encourage suggestions from employees.
viii) To ensure that, there is no threat of unemployment, inequalities, adopting a policy recognizing merit and employee contribution, and conditions for stability of employment.

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