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a matter of ethics….


The previous post stated....

"I am posting this on behalf of an ex-colleague. She works for a Financial Services company that outsources almost everything that they do. They have grown quickly and now have new staff that are not experienced in managing relationships with the outsourcing companies."

So here is my question..(well it turns out to be three questions really)

How much of an organisation's business activity can ethically be "outsourced"? 

Is it ethical to outsource activities to another continent just because it is cheaper? 

If an organisation outsources lots of its activity (especially where there is a clear inadequacy of management of the outsource providers) where does the customer service "buck" stop?

and finally...

have I got too much time on my hands!?

5 Responses

  1. how much can be outsourced…

    Hi Rus

    I would say it depends on the business – I would say up to 98%

    Take a person that has an idea – they outsource the prototyping, and then the customer market testing. then the outsource the manufacturing, the website development and the drop shipping… what is left??

    Isnt franchising an extream form of outsourcing?

    outsourcing is essential for a company to grow with limited resources – the only firms that don’t outsource are those that are cash rich!

  2. good point, Mike

    I see your point, there are certainly areas where it is pretty much the only way to go, I simply hadn’t thought of that sort of arrangement as "outsourcing", but a supplier relationship.  Almost all businesses rely on suppliers, think of the car industry (yes, I know we barely have one any more) Vauxhall don’t actually make 80 something % of the components they build your car out of, but Vauxhalls remain responsible when a component of your car breaks under warranty, whereas Lloyd’s TSB Bank totally wash their hands of anything that relates to Lloyds Bank Loans as it is a "seperate company".

  3. Slightly different experience…..


    I work within the Financial Industry and have experienced outsourcing occurring. I think when anyone mentions the term ‘outsource’, rightly or wrongly the typical thought relation is to customer contact centres and the generic thoughts all seem to have negative connotations attached to them.
    I work for a medium to large company (around 1,700 staff) that has outsourced parts of the functionality that we complete. From this, the organization has benefited. There were no redundancies made. This allowed staff that used to process the outsourced work to focus on more indepth and complex issues therefore providing them with enhanced career prospects and internal growth.
    The issue that a lot of people experience is that some organizations  only focus on the cost saving and not the quality, service or overall customer experience that should always be an organizations focus point…..especially as the markets are very competitive.
    I therefore, feel some empathy with those staff that receive the outsourced / offshored work…..would we turn work down if it was offered to us that met our criteria…probably not. The way businesses operate is to take business from other suppliers in a similar environment. When working for an organization that wins a new business contract, do we ourselves think of the people / staff we are taking the business from….of course we don’t, we are thinking of growth and other associated benefits.
    Overall, outsourcing / offshoring when used properly is a fantastic tool to allow development and growth….unfortunately it is often used in the wrong capacity. Blame the organizations for handling outsourcing badly….not the people that are taking the work.
    Hope this is ok.
    Kindest Regards
    Ryan Hollas
  4. nail and head

    Hi Ryan

    you have hit the nai on the head~it is about the balance;

    *the shareholders benefit because it reduces overheads

    *the staff benefit because it allows them to concentrate on more valauble service to customers

    *customers benefit because it provides a better/cheaper service

    *mankind benefits ‘cos it spreads the wealth around.


    As opposed to

    Shareholders benefit because its cheaper

    Staff are screwed because they lose their jobs

    Customers lose out because of dubious quality of the provider



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