BUSINESS OF ANZ BANKING CORPORATION

QUESTION

ANZ’S bank should opt for outsourcing as a method of management and cost cutting measure or not? Your bank should focus on three key issues as discussed below

SOLUTION

• The changes to be made with effect of outsourcing, in simpler words the effects of outsourcing on organization and those effects could be minimized in terms of firm’s permanent employees or not? It should also tell details of all changes that have to be made in the firm with effect to outsourcing introduction.
• The risk factor aversion associated with outsourcing and off shoring as a method of new management change policy. In order to introduce outsourcing, your bank should be highly cautious about the risks associated with outsourcing and there must be proper planning for avoiding those risks from the firm end.
• The third key factor which your firm should focus on is how to tackle with integrity of the firm together with implementation of outsourcing. In other words, managing with the workforce motivation and also the profitability factor even if outsourcing has been newly introduced, it has to be done beforehand only where employees and the top management should focus on maintain the integrity of the firm with simultaneously handling outsourcing also.

Potential challenges to outsourcing concept implementation:

Risk factor aversion must be done as risks associated with outsourcing may create following challenges: Creating distinction between job responsibilities to be considered under outsourcing, for example only sales and semi- marketing, business development, lower grade administrative and other clerical works should be outsourced. Managing with the integrity of the organization through highly upgraded banking softwares, limitations on usage and power bestowed should be strictly controlled for outsourced employees Administrative perfections should be monitored regularly like contract due dates, renewal timing, employees under outsourcing are performing well or not, if not then replacements must be called for with high spontaneity. Another recommendation for the bank is to have alternatives always prepared for management under difficult times, this can be done by job rotation of permanent employees, more training and developmental programs for them so that if situation arises, they can act as assets to the firm. Involve proper training and counseling sessions on regular intervals for outsourced employees so that bank’s vision, needs, objectives and mission could be conveyed to outsource employees also and they can also feel motivated for performing well. [Bhagwati et al, 2004] The integrity of the firm must also be focused on and it can create issues for the firm like loss of competent employee base, knowledge base and employer branding. The top management steering committee maintains the policies and framework where planning, organizing, and evaluating and controlling, all are done with respect to outsourcing. This can be enhanced by including members from information system division, key user group, executive management and strategy management.

The social and ethical considerations before your management are consistency in behavioral standards, organizational trust, compliance and managerial trust. The moral development should be also considered both externally and internally. Both moral values should be considered and then new changes should be organized. The code of ethics which should be monitored as explained in detail below is integrity, confidentiality, professional competence and organizational capability. [Strassman, 2006]

The challenges can be tackled and are not persuasive enough to stop it firm being implemented:

All those challenges and hurdles are not effective enough to create hindrance in outsourcing management techniques. There are certain advantages to it which can surpass those challenges and make them non persuasive. Cost effectiveness is important parameter which can be fulfilled with outsourcing. [Puronovic, 2007] Outsourcing can have definite benefits but only if applied with lot of care and correctness. Leon Carter, union’s national secretary said 5000 jobs have been outsourced by Australian financial services in just four years. [Fairfax Media, 2012]

At last I would like to say that your esteemed bank can easily opt for outsourcing as it is very effective way of decreasing the liquid expenditures and profitability can be increased to high standards but certain things must be changed before implementation of this rule or policy. For bringing such an organizational change, employees who are permanent and are asset to the firm must also be motivated and controlled. [Leid, 1996]

References:

1. Jagdish bhagwati, Arvind panagariya and T.N. Srinivasan, 2004, muddles over outsourcing, journal of economic perspectives, vol-18, no-4,  < http://www.aeaweb.org/articles.php?doi=10.1257/0895330042632753>
2. Paul A.strassman, 2006, is outsourcing profitable? viewed on 8^th May, 2012, < http://www.strassmann.com/pubs/gmu/OutsourcingV6.pdf>
3. Zoran Puronovic, 2007, outsourcing process and theories, viewed on 8^th May, 2012, <http://www.poms.org/conferences/poms2007/cdprogram/topics/full_length_papers_files/007-0003.pdf>
4. Fairfax media, 2012, article on off shoring, Business day, viewed on 8^th May, 2012, < http://www.smh.com.au/business/offshoring-high-price-of-low-cost-20120127-1qlot.html>
5. Warren S. Leid, 1996, outsourcing,  viewed on 8^th May, 2012, < http://www.wsrcg.com/Articles/OutSourcing.pdf>

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