Abstract
In this book, Shehzad Nadeem takes the reader through the vast maze of the “outsourcing” industry in India and explores its impact on the social and economic fabric of Indian society. Some previous books on outsourcing (e.g., Friedman, 2005) focus on how outsourcing has created a global workforce and broken down the barriers of time and geographies in the execution of work, taking a very high-level view of the phenomenon. In the author’s own words, these books look at the forest while sacrificing the trees. Other books, directed toward practitioners, espouse the commercial appeal of outsourcing and discuss the challenges of executing outsourcing engagements. This book is different from the array of outsourcing books available in that it takes a deeper look at the impact of outsourcing on Indian society. The author examines the environment in which the outsourcing industry operates, delving into the politico-legal system, the effect of the growth of outsourcing on local culture, the impact of local culture on the execution of outsourced activities, the status of workers in the outsourcing industry in India and its consequences, and the life of an average “worker,” who is an integral part of the outsourcing setup. Much of the book is based on the author’s detailed interviews and discussions with a wide range of people who are part of the outsourcing industry, mainly in call centers. The book raises important issues facing workers in the industry, employers, policy makers, and unions and should be of interest to a wide ranging audience. Finally, the book raises important research questions for organizational scholars in different disciplines who may want to take a deeper look at outsourcing and its effect on the larger society. I summarize some of the key points in each chapter and close with some questions that the book raises for scholars doing research on the outsourcing industry in India, and in general, to consider.
Chapter 1 introduces the phenomenon of outsourcing from the perspective of the outsourcer and provides an overview of the outsourcing industry in India. In chapter 2, the author lays the foundation for the rest of the book by introducing the pillars on which the outsourcing industry relies: the institutional environment, the societal environment, and the business environment, which are explored in detail later in the book. First, in terms of the institutional environment, the author discusses the role of government, or lack thereof, in the growth of the outsourcing industry, focusing on the role of the Software Technology Parks of India (STPI) scheme in developing the Information Technology (IT)/Information Technology Enabled Services (ITES) industry in India and the role of the political elite in creating the institutional environment to further outsourcing. Second, in terms of the societal environment, the discussion centers around the conundrums of the middle class in India, on which the outsourcing industry relies. The author highlights the contradictions that the modernity of the outsourcing industry is bringing to middle-class India, which is culturally anchored in conservatism. Finally, in terms of the business environment, the author discusses the disruptive shift in the spatial and temporal orientations of businesses and the creation of employees who tend to mimic the market they serve, focusing on the rise of the “24-hour society” (p. 49).
Chapter 3 delves into the “confusing” culture caused by outsourcing in formulating the collective “objective” that society pursues. The outsourcing environment is cast under the heading of “Macaulay’s children,” an environment that mimics the culture of the outsourcer, or the West. The focus here is on how the conflicts created by copying Western culture are affecting the psyche of the emerging middle class in India. The author draws examples from his interviews with Indian youth and quotations from the Indian press of industry doyens like Narayanamurthy, the former CEO of Infosys, a leading Indian software services firm. The chapter raises important issues that can serve as an anchor for researchers and policy makers as societies emulate foreign cultures. Specifically, the author points to the “west as a locus of modernity” (p. 71). Some important questions that arise in this context include the nature of the social order that is being ushered into the “new” middle class in India. The author discusses the mimicking of external culture and the consequent effect on the cultural fabric of society. He characterizes the tension that outsourcing creates in social relations between an older, conservative generation and a younger generation that mimics the values of consumerism and modernity as a “tectonic shift.”
Chapter 4 discusses the “use and abuse of time.” Although business professionals often suggest that the 24-hour work culture is an important advantage of outsourcing, the book focuses on the perils of the night shift and the consequent health repercussions for employees. The author discusses issues surrounding the “long” work hours, the intense pace of work, and the temporal disorientation of those in the relatively young workforce, all of which are a result of the increased use of technology and automation, i.e., investments in capital that facilitate the 24-hour work schedules. Ironically, such capital investments seem to contribute to the deterioration of the working conditions of employees rather than improving them, because of the increased monitoring and constrained work conditions that capital investment facilitates.
Chapter 5 discusses the type of work that is being outsourced and the changing nature of work resulting from outsourcing. The author argues that technology makes it possible for outsourcing to introduce increasing specialization by breaking down work into elements. Further, he outlines the detrimental effects of extreme specialization, or the “Taylorization” of work, on employee turnover, or attrition. Attrition has been a persistent problem in the outsourcing industry for a long time and often is as high as 40–50 percent in call-center work. The book takes a careful and balanced view of attrition. Beyond describing the negative effects of employee attrition on the corporation, the author discusses the inadequacy of the labor supply in meeting the demand across the various levels of the organization. The chapter covers not only changes in the environment of the organization that performs the outsourced work but also details the changes in the organization that outsources work. The author discusses long-run changes in the workforce composition of organizations that outsource work and the consequent effect on their success. For example, he describes a case study firm that becomes top heavy, rather than having a balanced workforce composition across the various levels. This change in the demographics of staffing patterns for outsourcing firms can become critical in the long run in retaining control of work within the firm.
In chapter 6, the author delves deeper into cultural issues in the workplace, noting that employees in the outsourcing industry in India do not take “ownership” of work that is outsourced. This chapter takes a close look at the “professional values” of Indian employees. The author argues that the outsourcing environment is characterized by a lack of managerial ethics and values, partly driven by the competitive nature of the environment and the imbalance in supply and demand in the workforce, which results in high attrition and lack of employee loyalty. Further, he traces the lack of ownership to the hierarchical work culture that characterizes society at large and the attitude of excessive submissiveness, which have consequences for the execution of work and workplace professionalism. He also discusses the creation of a flexible labor regime—the result of the industry’s imbalance in labor supply and demand—and its effects on a worker’s moral fabric. The lack of middle management and a younger workforce that lacks maturity and is in relatively early stages of evolution are important factors in creating the moral fabric of this outsourced environment.
Chapter 7 attempts to take the perspective of the outsourcer by examining outsourcing through the eyes of “Tyler,” who managed his firm’s outsourcing in India. Tyler, who started off the outsourcing initiative on a high note, is disturbed at the poor business practices pursued in his operations. The author describes the deconstruction and disillusionment of Tyler, a dreamy-eyed idealist who believes that he has created the “outsourcing juggernaut,” with the systems and workforce policies of rapid hire and fire and competitive human resource practices surrounding the implementation of policies. The discussion leads to an important question: “Is outsourcing good for India?”
In chapter 8, the author discusses the trickledown effect of the outsourcing industry on the rest of the economy and the interplay between reliance on export markets and growth of the domestic market. The author suggests that however global the industry may be, large transnational corporations often control the boards nationally and retain ownership of the intellectual property. Such ownership enables the supply chains of large corporations to benefit from globalization while making suppliers compete with each other to further reduce costs. In these cases, work may well move from India to other countries as wage rates rise and become less attractive to outsourcers. In addition, several alternate outsourcing destinations may be emerging. The chapter raises questions about the permanency of the outsourcing industry and the consequent effects on society of the flight of capital.
The final part of the book describes unions’ attempts in India to organize the workforce to bargain collectively for such things as pay, better work conditions, and worker safety and resistance to those efforts from both employers and workers. The author discusses how unions are rethinking and reorganizing to make themselves more appealing to a larger workforce and are combating the bias against unions as “anti-company and anti-establishment” (p. 208). Other problems in the unionization of the workforce are a result of the outsourcing industry having a comparatively better work environment than other industries. The chapter closes with the dilemma of trade unions that often stridently criticize the industry but end up promoting it, fearing the flight of capital. The closing arguments in the book discuss the need for a holistic approach to development in the Indian states and how the states have made the promotion of outsourcing a priority. Finally, the author issues a call to examine outsourcing in a broader framework, in which social goals can be pursued in parallel with the capitalistic mindset of outsourcing.
The book takes a hard look at outsourcing and investigates the ecosystem of the outsourcing environment. It raises important issues concerning how the kind of “hyper” growth that is established by outsourcing can be managed. For organizational scholars, the book suggests a vast array of questions that can be examined. How does one move beyond studying simple relationships to the complex web of linkages that can be a part of the larger ecosystem? Even within the outsourcing industry, a considerable degree of heterogeneity exists in the way firms treat their employees in call centers and in the software industry, although both fall under the aegis of STPI. Further, a large fraction of the outsourcing industry also relies on multinational firms setting up shop in India. The author points to employees in an HSBC call center, a multinational bank, as being happier than employees in a large part of the outsourcing industry. Are all of the multinationals similar? Beyond outsourcing itself, how does the outsourcing industry change the employment and cultural landscape in a country in which outsourcing-led employment is a drop in the bucket of organized employment but is gaining prominence due to its activities’ value added? Statistics show that 92 percent of the overall workforce is in the unorganized sector, with the net labor market estimated to be around 500 million in 2006 (Sakthivel and Joddar, 2006). Though outsourcing contributes about 5.8 percent of the country’s GDP, it employs only about 2.3 million (NASSCOM Industry Trends, 2009), a small fraction of the total labor market. The book poses several interesting questions at the level of businesses, too. Specifically, do clients accept the work norms and conditions, or does the short-term focus on quick returns from outsourcing mask some of the problems it creates for businesses and societies to manage? Overall, the book poses several more questions than it answers, a characteristic that provides fertile ground for organizational scholars to find questions to investigate. The book should appeal to organizational scholars, business professionals, and policy makers alike.