Group Case Analysis: Offshoring by Trading Company

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Throughout the duration of this course we have had the opportunity to learn various methods that can be implemented to increase the effectiveness of an organization. We have worked to master the concepts of strategic management, environmental influences, human resource forecasting, downsizing and restructuring, strategic international human resource management, mergers and acquisitions and finally outsourcing. These methods and concepts, used together, define the very essence of Human Resource Planning.

        We have taken our combined knowledge of the concepts above and used them to analyse the case study of the Toronto Based trading company.

The Trading Company made a decision to outsource back-office capabilities to India.  Based on the information provided, we feel that this was not a well devised plan. In deciding to move this function to India, both the managers and directors were left with questions, there was an unrealistic timeline for completion, and the research required to begin operations in India, if any was completed at all, was inadequate. It is the purpose of this paper to further examine these strategic shortfalls and to provide our insight into strategic solutions that we feel would have better served the company.

        Examination of the Case Study leads us to believe there was little to no strategic management implemented when the company decided to outsource. Strategic management, as described in our text, is “interrelated philosophies, policies, and practices that facilitate the attainment of organizational strategy” (Belourt, p. 33).  The company, which already has pre-existing offices worldwide, deciding to move a significant part of the core back-office capabilities to another country solely as a cost saving initiative.

The key factors which the company failed to recognize are that this kind of restructuring requires time, planning and research. The case study reveals that the company was only given three months for this implementation to take place. We see that this was not enough time for the company to complete the required research and review all of the pertinent information, including current staff, cost for expansion, profitability and external and internal changes. We see the impact of this lack of planning at the Manager`s Retreat, when the deputy Director did not know how this change would affect the current employees.  The failure to take the time to develop a strategic HR plan resulted in the organization`s inability to answer employee questions regarding who would be directly affected, but moreover, it resulted in financial losses.

Had the company been strategic in its planning, there would have been no unanswered questions when the decision was released to the employees.  The company would have been able to communicate, in depth, the details surrounding the implementations as well as a timeline highlighting the dates of implementation at the different stages of the transition. Strategic planning would have also included solid research, resulting in a detailed understanding of what duties needed to be outsourced and what functions could remain onshore.