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Understanding Cultural Differences Key to Successful Outsourcing

Jan 19, 2008
Cutting costs is one of the important benefits of outsourcing. A drawback, however, is that cultural differences may limit the effectiveness of the outsourcing process and may create misunderstandings between the contractors and the company outsourcing the services. It is, therefore, of utmost importance for businesses to understand cultural differences and how to address them before deciding to bring the business overseas. If these cultural differences were understood and the corresponding safety measures were put in place, then businesses will be able to maximize the benefits being offered by outsourcing.

Miscommunication is perhaps the leading problem faced by companies in the United States when it comes to outsourcing. People from different countries have different modes of communication. Furthermore, even if the workers in the foreign country are speaking English, several layers of meaning or connotations are sometimes left out. More than half of US business executives face issues of miscommunication in their dealings with the persons who do the work for them.

Miscommunication, however, is not the only problem that they face. Oftentimes, there are also different management styles that work best for different nationalities because of differences in work habits and work ethics. Even the manner of resolving conflicts and disagreements also vary from country to country. The management style for Indians may be different from Americans and Europeans. As such, a one-size-fits-all style would just cause bigger problems.

Given the nature of the outsourcing industry today, where a number of companies are tapping the services of a very diverse set of nationalities, cultural issues present a very significant matter that should be addressed. This means that prior to the migration of the services, a thorough study should be conducted regarding possible cultural issues so that the necessary precautions and safety measures would be built into the transition process. This would lead to less frustrations and misunderstandings between and among the management team and those performing the outsourced jobs, as well as between the company and its customers.

Large scale enterprises tend to favor outsourcing to other countries because of the economy of scale that they can get. For small and medium scale enterprises, however are increasingly preferring vendors and service providers that are located in the country where they operate. For large scale enterprises, they have the option of setting up an office in a foreign country while small and medium businesses do not have this capacity.

Regardless of the scale of the enterprise, cultural issues should be addressed by any company thinking of outsourcing services to foreign providers. The main consideration for outsourcing in the early stage of the industry is only the savings generated by cheaper labor from foreign countries. However, as time passes by, and as the industry is getting well acquainted with the outsourcing process, the issues in communication, in culture and in dealing with foreign workers are being highlighted.

The challenge now would be how to address these cultural issues. As a result companies are now on the lookout on how to solve cultural differences by bridging gaps or by choosing service providers from the companys home country.
About the Author
James Stinson is Owner and Founder of Global Sky Inc. He employs a team of 50 in a high quality call center facility based in the Philippines. For more info on outsourcing your project visit: http://www.global-sky.com
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