Outsourcing Of Their Customer Service Labor example essay topic

INTRODUCTION Clarendon Street Consultants (CSC) is a long-standing consulting firm based in Chicago. With a history of operations spanning more than forty years, our firm has established a faithful client base, which it serves through five privately-owned offices. The firm has recently been confronted with the controversial issue of outsourcing American jobs. Proponents of the measures claim that the outsourcing of labor is beneficial for Americans in terms of cost savings for corporations and the creation of better-paying jobs for workers. Those that oppose these measures point out the loss of American jobs at the expense of low income households, as well as a greater dependence on other countries. CSC has decided to examine the issues of outsourcing American labor from a bilateral perspective-the firm will analyze the issue based on its positive impact on profitability and American society.

The firm wishes to form its own conclusion based on available information. This conclusion will help CSC in its own future outsourcing-related issues, and will guide the advice given to clients on the subject. A recent article on the subject of outsourcing from Business Today proved useful in our analysis. In the article, author Max P. Michaels heavily favors outsourcing. Michaels, who is a member of the India Business Council, gave a few valid arguments supporting the use of outsourcing in the U.S. However, in order to get a clearer picture of these arguments, I found it useful to analyze the article itself and the arguments in favor of such a position. ARGUMENT In his article, Max P. Michaels concludes that "Offshoring is Good for America" (96).

In order to determine why Michaels believes this is so, we must first take a closer look at his argument. He has provided the following reasons to support his conclusion that offshoring is good for America: o Cross border outsourcing of American labor results in U.S. wealth creation o Cross border outsourcing is good for shareholders, consumers, and workers in AmericaANALYSISCross-border Outsourcing Creates Wealth Michaels provides his first reason for his argument by stating that "America is going through a wave of wealth creation, this time triggered by cross-border outsourcing" (96). Restated, the reason simply states that cross-border outsourcing causes wealth creation. This is a good reason to support the author's conclusion, but there are a few impediments to his argument in the article.

First, the author uses ambiguous wording to describe his presentation of the facts. The phrase "disruptive creation" is used twice in this section, without leaving the reader with any clue as to the author's meaning (96). "Disruptive creation" is a term not commonly used in the business world-the ambiguity of the term lends itself to individual interpretation, and therefore does not support the author's argument. If the author instead uses more specific wording, the audience would be more in tune with his argument. This phrase needs to point more specifically to an idea that the audience can visualize or understand. The term "disruptive creation" could be defined by the author within this section by mentioning that it represents the short declines in the American economy caused by a loss of outsourced American jobs.

In addition, the author should change the heading to be more specific as well. It currently reads "Disrupting to Create" (96). If the heading instead read "Disruption of the American Economy Creates New Jobs", the audience would have a clearer picture of what they are about to read. The point of headings is to allow for faster finding of information, and to inform the reader of the content located below the heading. The current heading serves neither purpose. In addition, the author's reason assumes that his audience believes that wealth creation is a good thing, regardless of its origin.

This descriptive assumption is quite false when you consider that billions of people and many companies around the globe choose personally fulfilling goals rather than financially fulfilling ones. If this assumption were true, well-known organizations such as Green Peace would simply not exist. The author assumes that the reader would believe that wealth for America would be a good thing, even if it comes from other countries. If this were true, the author would not have admitted in his opening statement that this issue is a "hot button". Because the author's reason for his conclusion is a descriptive assumption, the reason does not lead to the conclusion (Browne and Keeley 82). In order to fix this passage, I would suggest that the author use more specific phrases that won't cause discord with American readers.

The author can replace his current topic sentence with one that reads "America is going through a slump in its economy. This slump is being cause by the relocation of manufacturing jobs to other countries. The occurrence of factory layoffs will lead to better paying American jobs to manage the new source of labor". This reason states virtually the same idea, but doesn't necessarily leave the same bitter taste for the American reader. Right away, the reader can see how the outsourcing affects American labor in a positive manner. This illustration also removes the ambiguity of the phrase "disruptive creation".

The author gives statistical numbers to back up his reason as evidence. An example of this is seen when the author reveals that "In the early 80's, the US was losing jobs at the rate of 200,000 jobs per year... Over 20 million new jobs were created in the 80's, mostly in services and advanced manufacturing" (96). Unfortunately, the sources for this evidence are not cited, which weakens the author's argument. I would suggest that Michaels remedy this lack of credibility by citing his sources, either directly in the text or via a reference section at the end. By providing his sources, the author provides more reliability to his facts, which will strengthen his argument.

Without supplying references, the author's evidence is unverifiable and therefore cannot be trusted by the reader as support for the reasons. The author places a great deal of his evidence for this reason near the end of the article, where he discusses "The Macroeconomic Perspectives". He cites relevant quotes by famous financial experts, which strengthens his argument as well. These appeals to authority should be placed within the same section as his first reason, under "Disrupting to Create". The evidence is currently located too far from the reason for the reader to make an immediate connection. When placed in the proper section, the author will eliminate this impediment to his argument.

Cross-border Outsourcing Is Good for Americans For his second reason, the author states "Cross-border outsourcing is good for American shareholders, consumers, and workers alike" (97). This reason simply restates his conclusion, which is known as a "begging the question" fallacy, according to Browne and Keeley (96-97). The category of "American shareholders, consumers, and workers" comprises just about every American. Is this really so much different from saying "offshoring is good for Americans?" The author uses a subtle phrase change from "offshoring" in the title to "cross-border outsourcing " in his topic sentence.

The phrase "offshoring" refers to countries that are not connected to the US by a body of land. The term "cross-border", however implies a connection to the US by a body of land at its borders. Due to the difference in meaning of the two phrases, his reason does not support his conclusion. For example, if outsourcing is good for the US in Mexico, it does not mean that outsourcing is beneficial in India or China.

This would be an example of a "hasty generalization fallacy" (Browne and Keeley 108). One of the impediments to the reader's understanding of this reason is the author's assumption that money saved by corporations from outsourcing is reinvested into the workers instead of capital. This statement is not proven in the article. In order to support this, the author would need some type of case study or statistical evidence. The conflicting issue here is that for most American corporations, the bottom line is profits (Evanko).

These corporations must answer to shareholders, who care most about profits and dividends. Why then, would the corporations be inclined to reinvest profits into higher paying jobs for Americans? Another impediment that exists in the author's arguments is that he does not explain how the outsourcing of American jobs to India results in better pay for American workers. "American workers benefit directly from the higher-paying jobs that would be created in the economy, as corporations reinvest their profits in new markets and products". This statement does not give any evidence of how companies have done this in the past, nor is it specific as to how this would occur in the future. A case study or historical reference to companies that have accomplished this in the past would strengthen the author's argument that the corporations are creating higher paying jobs as the result of outsourced labor.

It is unclear how reinvestment in new markets and products would benefit American workers. Wouldn't the labor for these new markets simply be outsourced like the original operating activities were? Yet another impediment to the argument exists in the form of deceptive statistics. The author states that "every dollar of labour cost outsourced offshore creates over $1.45 of value; 78 per cent of this value is retained in America and only 22 per cent of the value goes to outsourcing destinations like India". When one considers that 78 percent of $1.45 is actually $1.13, the correct interpretation of the data would be that for each dollar in outsourced labor, America retains only a 13 cent gain! This is hardly persuasive evidence in itself that outsourcing is good for America.

In addition, the value resulting from offshore outsourcing does not support the topic statement that "Cross-border outsourcing is good for American shareholders, consumers, and workers alike". What creates value in India will not necessarily create value in a cross-border country such as Mexico. This is yet another example of the "hasty generalization fallacy" (Browne and Keeley 108). The evidence in this section is somewhat weak.

Although the author gives statistical data in this section, it does not sufficiently support his topic sentence. First, there appears to be missing information that addresses one of the concerns of outsourcing labor, especially to areas of consumer contact, such as customer service. The author does not address the language barrier that exists between these countries. The fact that the workers are well educated does not imply that they speak fluent English, which is the primary language of the United States. The author needs to address this issue, and either admit the negatives of such an issue and explain how it is being resolved, or give evidence which indicates that this problem has already been dealt with. The author gives no evidence to support his statement that "Every job outsourced generates cost savings to be invested in a better job for an American" (97).

The author does not support this statement with evidence that U.S. companies are actually paying our workers more as a result of the reinvestment of savings generated by outsourcing. To fix this issue in the article, the author needs to provide evidence that American companies are providing American workers with higher wages as a result of outsourcing their labor. Biased evidence exists in the article which lends itself to some scrutiny. The deceptive statistics provided by the author were not obtained by a non biased third party. In fact, the data were obtained by the same group to which the author is an alumnus!

This is an example of an "appeal to questionable authority" as defined by Browne and Keeley (89-90). Knowing this, one would wonder whether reliable data exist to support the author's argument. Therefore, this evidence cannot be trusted to support the argument. The author needs to find evidence from an organization with which he does not have any ties to give his evidence more reliability. IMPLICATIONS After carefully analyzing this article and the issue at hand, I disagree with the conclusion of the author.

Although outsourcing of American labor may be suitable for certain industries, it is not appropriate in the customer service industry for the following reasons: o Companies can lose future business of customers due to dissatisfaction stemming from culture and language barriers, among other factors. o Research has indicated that most companies never stand to make a profit on outsourced customer service labor. o Personal experiences of my own with this matter have substantiated the claims made by experts familiar with the subject that it may result in customer defection. A perfect example of this can be found in the information technology customer service segment. In this industry, the outsourcing of American labor to other countries such as India actually may cause a reduction of the quality of customer service provided, and therefore cause a loss of future profits from dissatisfied customers who choose to do business with competitors. Being somewhat knowledgable in the information technology field, I can personally attest to this occurring in practice.

After ordering a new hard drive from Dell Computer's website approximately two months ago, I noticed that I had made an error in giving my shipping address. I quickly called Dell's customer care number, which routed my call over to India. After providing the thickly accented agent with all of the necessary information, I explained to the agent that I needed to change my shipping address on my current order. After placing me on hold for approximately two minutes (I can only assume she was asking a colleague how to accomplish this) she returns to the line and asks me to repeat all of my information. After another five minutes, I am told that she must contact the United States to change my shipping information. I am placed on hold for an additional 7 minutes while she contacts someone from my country.

Finally, she confirms that the item will be shipped to the new address. It took eighteen minutes of my time to change a shipping address! In contrast, I have accomplished this same feat on more than one occasion with an American-based customer service division in the past in under five minutes. Due to my dissatisfaction with the quality of customer service at Dell, I will give second thought to any further purchases with that company. In a recent move to correct these customer service issues, Dell Inc. has cut back on the outsourcing of their customer service labor. 'We felt a little noise and angst from our customers, and we decided to make some changes,' said Gary Cots hott, vice president of Dell's services division (Schatz).

American businesses may lose out big on sales if they continue to take this approach of outsourcing customer service labor. "Customer perception is often negative -despite good service-because of language and cultural differences" (Baker). During my phone call with Dell's customer service, I began to notice (and become annoyed with) the fact that the agent was mentioning my last name in every sentence that she spoke-I found this to be quite unnatural and somewhat insulting. In India, it may be considered a sign of good manners or respect to do so, but in the United States, it is not. American companies are beginning to realize that offshore outsourcing of customer service may be faster and cheaper, but certainly not better. "Companies are beginning to be scrutinized by customers on this issue.

What may happen is that customers who are shopping around for technology may be put off by a company that uses overseas support' (Millard). Some companies are beginning to realize that "the savings achieved by moving jobs overseas may sometimes be outweighed by the cost of antagonizing loyal customers" (Schatz). Larger corporations such as GE Capital, American Express, and Citibank "have already repatriated the most sensitive of their customer service activities in the sudden realisation that customer service is not about phone calls, but about creating future revenue streams and retaining customers" (Kjellerup). CONCLUSION CSC has concluded that although outsourcing of American labor may be better in most low paying jobs (such as manufacturing), it is not appropriate for the customer service industry. The positive effects of companies not outsourcing customer service labor will be increased customer loyalty and more satisfied customers in the future. American consumers most often come in contact with the customer service sector of outsourced labor, so by avoiding the outsourcing of labor in this industry we may be able to prevent negative public opinion of outsourcing as a whole based on consumers' negative experiences with outsourced customer service.

This would help make it socially acceptable for American firms to outsource other forms of labor. In addition, American firms should note that outsourcing customer service does not always result in lower costs. In fact, Gartner predicts that 80% of companies that outsource customer service will fail to reduce costs (98). If there is little guarantee of a return in profit, and a larger risk of consumer dissatisfaction, why would a corporation choose to outsource their customer service?

It simply doesn't make sense.

Bibliography

Baker, Pam. "No Free Lunch: Why Customer-Service Outsourcing Doesn't Work". October 11, 2004.
Browne, M. Neil and Stuart Keeley. Asking the Right Questions: A Guide to Critical Thinking. 7th ed. Upper Saddle River, NJ: Prentice Hall, 2004.
Evanko, Ann. "Not-for-profits need to eye the bottom line". Business First of Buffalo. August 2, 2004: 2-3.
Gartner, Inc. Outsourcing Strategies, Markets, and Best Practices. 2004-2005 ed.
New York: Wiley, 2004.
Kjellerup, Niels. "The Growing Pains of India's Call Centre Industry". March 12, 2004.
Michaels, Max P. "Why Offshoring is Good For America". Business Today. October 26, 2003.
Pp. 96-98. Millard, . Elizabeth... ". Outsourcing. Customer. Satisfaction". . April. 24, . 2004.
Schatz, Amy. "Dell Sending Some Jobs Back To U.S. (Outsourcing to Reverse? )". American-Statesman. November 22, 2003.