Page 293 - Global Project Management Handbook

14-18 MANAGEMENT OF GLOBAL PROGRAMS AND PROJECTS

and eventually had the responsibility for technical assistance. They took orders from
Nextel’s business units. After outsourcing, the vendor, Amdocs, took over management
of the technology side of billing services. Brace and his staff’s job became monitoring
and controlling Amdocs service levels. Brace had only 20 people to manage, but after the
job was outsourced, he began to manage a 330-person organization for provision, mes-
saging, and data management. At the same time, many employees were transferred to the
vendors while Nextel outsourced its IT management. A total of 4500 employees were
transferred to IBM as a result of their eight-year contract for the management of customer
care services.
Unfortunately, many managers believe that the company is safe as long as the
accounting book looks good. However, in the long run, the dynamics of an organization
do not depend solely on monetary values. Without employee motivation, it is not possible
to maintain efficient work. During an outsourcing process, organizational change is
unavoidable, given that new employees will be hired, and some old employees will lose
their jobs. These revolutionary changes may create a depressed psychology among
employees. Reorganization programs are very important to minimize the adverse effects
and to assist in the continual success of an outsourcing project. Necessary time and effort
should be given to such programs.
An example is Hewlett Packard’s successful reorganization programs that were
initiated by a proactive management. 10 When the outsourcing trend in manufacturing
started, Hewlett-Packard was quick to realize the trend and outsource PCA and PCB
activities. In the following years, when a lot of competitors were forced by the changes to
deal with inertia, Hewlett-Packard’s management was able to grow another business
while closing one. The proactive movement of Hewlett-Packard gave the company the
time and opportunity to structure reorganization programs for its employees. During the
finalization phase, Hewlett-Packard managers were measured on the success of the reor-
ganization programs. This was done through project milestones and employment satisfac-
tion surveys. As a result of shifting jobs overseas, a considerable number of employees
became redundant. These people needed to be retrained. In Hewlett-Packard’s case, the
outsourcing of manufacturing processes meant that there were fewer production labor
jobs and more desk jobs. Hewlett-Packard recognized this and made a significant invest-
ment in retraining, including career-development education. Employees that were
affected by the reorganization were given priority for the open jobs. In case a person
from the reorganized area was not hired for the new position, the hiring manager had to
justify the reason and the company also arranged early retirement programs and voluntary

services for employees who did not want to change their career paths.
Another natural consequence of outsourcing is exposure to new cultures and business
styles. It is important to train both organizations’ employees about the cultural differ-
ences in order to prevent misperceptions of one another. In a workshop held by B. Hurn
and M. Jernkins at a large multinational company, Foseco, employees were asked to
examine the cross-cultural issues involved in building and sustaining multinational teams
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and the problems of participating in multicultural meetings. The major areas identified
as part of the “cultural minefield” were greetings, degree of politeness, showing agree-
ment and disagreement, use of interpreters, different approaches to time, gifts, the status
of women, and body language. Linguistic barriers such as the use of complicated and
idiomatic English also were mentioned. There also was discussion about different com-
munication priorities in different cultures. For instance, American relationship building is
based on direct communication, whereas in Asia and Latin America, the “getting to know
you” phase is more emphasized. The authors agreed that top-management commitment is
an essential prerequisite to developing the trust-building process. A technique for creating
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cultural synergy is adapted from a model by Adler. In this technique, first, the situation
is described from one’s own cultural perspective. The next stage is to determine the