When Outsourcing Goes Wrong: A Look into the Outsourcing Relationship between Alcatel and HFS

Résumé du document

The issue of outsourcing has been the topic of debate among business corporations. As companies continue to outsource the business operations and processes to other countries, there has been a division among those who embrace outsourcing and those who are oppose to it. On one side, there are individuals who embrace outsourcing and feel that outsourcing is important for developing countries, as it brings in jobs and opportunities to people in other countries. On the other side, there people feel that outsourcing is hampering the employment opportunites in the home country. In the modern scenario, companies are using outsourcing as a strategic option to gain a competitive edge in today's marketplace. The aim of this paper is to highlight many problems that occur in an outsourcing relationship between two companies from two different countries. The purpose of this paper is to show that not all outsourcing relationships are successful and careful analysis should be under-taken before any outsourcing decisions are made.

Extraits

[...] The discussion will then end with a look into Hofstede's cultural dimensions and how that affected the relationship between Alcatel and HFS. It is important to note that the norms and values presented in the following paragraphs concerning India and France are generalizations; the aim of this section is not to give exact representations of the cultures of India and France. Because of insufficient information, the aim of this section is to provide possible cultural problems that could have complicated and led to the failure of the outsourcing project between Alcatel and HFS. [...]

[...] Therefore, by outsourcing more into the Indian market, Alcatel was hoping to increase its presence in India. Moreover, by having relations in India, Alcatel could learn more about the market and its people. In addition, it was wise for Alcatel to outsource to India based on the fact that there was a heavy supply of skilled but cheap labour. Another reason to outsource for Alcatel in this particular case was to focus more on its core competencies. Hamel and Prahalad have specified three conditions to define a core competency: it provides customer benefits, it is hard for competitors to imitate, and it can be leveraged widely to many products and markets (Prahalad & Hamel, 1990). [...]

[...] (2007, April 20). Alcatel-Lucent - Wikipedia. [...]

[...] An example of a switching cost is the time and effort needed to train a new service provider in performing a task. As it relates to this particular case, Alcatel did not take into account the structural risk of outsourcing and believed that HFS would complete the task and act in the best interests of both Alcatel and HFS. In the end, HFS did not complete the task and one of the main reasons why was due to the fact that HFS had too many other projects to complete. [...]

[...] The aim of this paper is to uncover the many problems that can arise in an outsourcing relationship between two companies from two different countries. The purpose of this paper is to show that not all outsourcing relationships are successful and that careful analysis needs to take place before any outsourcing decisions are to be made. At the outset of this paper, a case outline will be presented that provides an overview of the companies involved and the task that was outsourced in this particular case. [...]