Outsourcing

Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. Outsourcing is a business decision that is often made to lower costs or focus on core competences. A related term, offshoring, means transferring work to another country, typically overseas. Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country. Outsourcing became a popular buzzword in business and management in the 1990s. EDS was the first company to establish the outsourcing business.

Overview

Outsourcing is defined as the management and/or day-to-day execution of an entire business function by a third party service provider.

Outsourcing and/or out-tasking involve transferring a significant amount of management control to the supplier. Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. Likewise, buying services from a provider is not necessarily outsourcing or out-tasking. Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust.

Organizations that deliver such services feel that outsourcing requires the turning over of management responsibility for running a segment of business. In theory, this business segment should not be mission-critical, but practice often dictates otherwise. Many companies look to employ expert organizations in the areas targeted for outsourcing. Business segments typically outsourced include Information Technology, Human Resources, Facilities and Real Estate Management and Accounting. Many companies also outsource customer support and call center functions, manufacturing and engineering. Outsourcing business is characterized by expertise not inherent to the core of the client organization.

The overhead costs of customer service are typically less where outsourcing has been used, leading to many companies, from utilities to manufacturers, closing their in-house customer relations departments and outsourcing their customer service to third party call centers. The logical extension of these decisions was of outsourcing labor overseas to countries with lower labor costs, this trend is often referred to as offshoring of customer service.

Due to this demand call centers have sprung up in Canada, China, Eastern Europe, India, Israel, Ireland, Pakistan, Philippines and even the Caribbean. Many companies, most notably Dell and AT&T Wireless, have gained significant negative publicity for their decisions to use non-US labor for customer service and technical support; one of the most prominent complaints being the expectation that the replacement staff will have more trouble communicating with customers.

A related term is out-tasking: turning over a narrowly-defined segment of business to another business, typically on an annual contract, or sometimes a shorter one. This usually involves continued direct or indirect management and decision-making by the client of the out-tasking business.

The term "outsourcing" became more well known largely because of a growth in the number of high-tech companies in the early 1990s that were often not large enough to be able to easily maintain large customer service departments of their own. In some cases these companies hired technical writers to simplify the usage instructions of their products, index the key points of information and contracted with temporary employment agencies to find, train and hire generally low-skilled workers to answer their telephone technical support and customer service calls. These agents generally worked in call centers where the information needed to assist the calling customer was indexed in a computer system. The agents were often not able to tell the customer they did not actually directly work for the original manufacturer. In some cases, the agents are not allowed to even give out their real name.

Outsourcing, Offshoring, and Offshore Outsourcing

Note that “outsourcing”, “offshore outsourcing” and “offshoring” are used interchangeably in public discourse despite important technical differences. To be consistent, “outsourcing”, in corporate context, represents an organizational practice that involves the transfer of an organizational function to a third party. When this third party is located in another country the term “offshore outsourcing” makes more sense. “Offshoring”, in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. In short, “outsourcing” means sharing organizational control with another organization, or a process of establishing network relations within an organizational field. "Offshoring”, on the other hand, represents a relocation of an organizational function to a foreign country, not necessarily a transformation of internal organizational control.

Arguments for Outsourcing

A recent poll of economists by the Wall Street Journal found that only 16 % of them saw outsourcing as having a significant impact on the overall job picture. [1]

One criticism of outsourcing is that product quality suffers. But the outsourcing firm has freedom to move a firm department or division back home if its profits are suffering as a result of poor quality. In fact, many American companies like Dell have moved customer service divisions back to America as a result of poor quality [2]. The decision to outsource is like any other business investment decision in that there is risk. Critics of outsourcing often talk about outsourcing failures without mentioning instances of outsourcing success. The decision to outsource is like the decision to expand a business overseas, to incorporate computer technology, or to hire new workers. If the company does it correctly, it benefits from higher profits. Proponents of outsourcing believe that arguing that outsourcing leads to lower product quality is pointless because if it were true, consumer demand will force firms to shift back to producing the good or service in-firm rather than out-firm. That many large businesses outsource and continue to outsource suggests that in many cases outsourcing is successful in that it increases product quality, lowers costs substantially, or both.

Some economists have argued that outsourcing is a form of technological innovation analogous to machines on a car assembly line. American Motor Company Ford relied heavily on workers in the past to assemble car parts. Today these workers are replaced by machines because they are cheaper in the long run, produce better quality products, or a combination of both (the firm is trying to increase its quality to cost ratio, quality being defined by the consumer and inferred from revenue). Economists argue that machines on the car assembly line must have a higher quality to cost ratio than workers because, if they didn’t, there would be no incentive for the firm to replace workers with machines. Although workers’ jobs were lost from this replacement of workers with machines, the Ford Motor Company made more money by lowering costs (or increasing quality, thereby increasing revenue). Some argue that greater profits to the labor owners lead to higher consumption, which leads to further job creation, allowing those who lost jobs to gain jobs in other sectors of the economy. However, economists do concede that labor is not always perfectly mobile and that some workers may have difficulty getting new jobs. Some economists suggest that government training programs be provided.

A firm's motivation for replacing workers with machines is identical to the motivation for outsourcing, i.e. the firm is trying to maximize the quality of its product given cost (its productivity). Because outsourcing allows for lower costs, even if quality reduces slightly or not at all, productivity increases, which benefits the economy on aggregate.

Economist Thomas Sowell from the University of Chicago said “anything that increases economic efficiency--whether by outsourcing or a hundred other things--is likely to cost somebody's job. The automobile cost the jobs of people who took care of horses or made saddles, carriages, and horseshoes.” [1] Walter Williams, another economist, said “we could probably think of hundreds of jobs that either don't exist or exist in far fewer numbers than in the past--jobs such as elevator operator, TV repairman and coal deliveryman. ‘Creative destruction’ is a discovery process where we find ways to produce goods and services more cheaply. That in turn makes us all richer.” [2]

Professor Drezner reports that for every dollar spent on outsourcing to India, the United States reaps between $1.12 and $1.14 in benefits. [3] Drezner also points out that large software companies such as Microsoft and Oracle have increased outsourcing and used the savings for investment and larger domestic payrolls. Nationally, 70,000 computer programmers lost their jobs between 1999 and 2003, but more than 115,000 computer software engineers found higher-paying jobs during that same period. [3]

Advocates of outsourcing also claim that outsourcing-related fraud is insignificant, averring that such malpractices can occur in any country. For example, 40 million credit card numbers were stolen in June 2005 at CardSystems Solutions in Tucson, Arizona. (See the full story.). In December 2005, nearly 50 people were indicted in connection with a scheme that bilked at least $200,000 from Katrina relief fund at Red Cross claim center in Bakersfield, Calif., which handled calls from storm victims.

Criticisms of Outsourcing

Because "outsourced" workers are not actually paid agents of the company, it has been argued that there is less incentive for the agent to show loyalty or work ethic in its representation of said company. It has been therefore argued that quality levels of customer service and technical support of outsourced tasks are lower than where they have remained 'in-house'.

The 2004 US presidential election race focused on outsourcing to some degree. This debate did not center on problems of declining quality of customer services but on the threat to US jobs and work. Criticism of outsourcing, from the perspective of US citizens, by-and-large, revolves around the costs associated with transferring control of the labor process to an external entity in another country. A Zogby International poll reports that 71% of American voters believe that “outsourcing jobs overseas” hurts the economy and another 62% believe that the US government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource. The poll of over 1,000 Americans was conducted in August 2004 (See Zogby International survey results online at zogby.com).

Outsourcing appears to threaten the livelihood of domestic workers and the American Dream. This is especially true for high-tech workers who were promised the “jobs of tomorrow”- a phrase Bill Clinton iterated in 1994 to justify his conservative position on NAFTA. Outsourcing appears to work contrary to the claim that “free trade” will create the “jobs of tomorrow” in America when high-tech or high paying white collar jobs are transferred to or created in foreign countries. Thus, outsourcing is criticized as it represents a new threat to labor, contributing to rampant worker insecurity, and reflective of the general process of globalization where the United States government fails to mediate business-labor relations in a way conducive to prevailing values that places the American middle class worker as a central priority.

Criticism of outsourcing from the public and media sometimes tend to concentrate on lackluster customer service and technical support being provided by either local workers who are not actually employees of the company, or by overseas workers attempting to communicate with Americans in broken or incomprehensible English. Defenders of outsourcing say if this were true, then companies would experience market forces compelling them to return service and support handling back from the outsourced company. However, service and support are often not considered by customers as part of their original purchases. Customers only experience outsourced service and support after they have spent their money since sales is generally done in-house by the original company. Dealing with lackluster outsourced service is a negative surprise after the money is already spent.

Policy solutions to outsourcing are also criticized. One solution often offered is retraining of domestic workers to new jobs. However, some of these workers are already highly educated and already possess a bachelor's and master's degree. Retraining to their current level in another field may not be an option due to years of study and cost of education involved. There is also little incentive given that the jobs in their new field could also be outsourced as well. Proportions of workers trained for Science, Technology, Engineering, and Mathematics (STEM) fields fields in developing nations are viewed to outstrip traditional technology leaders such as the U.S. With these traditionally "safe" jobs perceived to be endangered, this raises questions regarding whether origin countries can maintain any comparative advantage given the losses in both low and high-value jobs.

There are also security issues concerning companies giving outside access to sensitive customer information. In April of 2005, a high-profile case involving the theft of $350,000 from four Citibank customers occurred when Indian call center workers in Pune, India, acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified the bank. (See the full report.)

Outright fraud is also a concern. In 2005, Intel discovered and fired 250 Indian employees after they faked their expense reports. The firings followed from Intel's internal Business Practice Excellence programme of expenses claims. The report concluded that fraudulent practises such as "faking bills to claim your allowances like conveyance [and] drivers’ salaries" were some common malpractices in India. Intel would not put up with such fraud. NASSCOM, which is a forum of IT and ITeS companies, has attempted to address these fraud concerns in India by creating the National Skills Registry. That database contains personal and work-related information, enabling employers to verify a staff member's credentials and allowing police to track the background of workers.

Democratic U.S. presidential candidate John Kerry blasted firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their fair share of US taxes during his unsuccessful 2004 campaign, calling such firms "Benedict Arnold corporations," in reference to the infamous traitor Benedict Arnold.

It is argued a malicious implementation of the Higher Education Role Analysis (HERA) in the UK may force Higher Education administrative and support staff to prematurely retire or seek for new employment in other organisations, thus freeing of staff many departments which could then be effectively outsourced. Outsourcing departments like Accounts, Payroll and Procurement is now common practice, as seen in August 2005 at the University of Portsmouth.

Notes

  1. ^  This view is borne out by a recent study by Richard Freeman at the National Bureau of Economic Research in Washington. He found that in the year 2000, 17 % of university bachelor degrees in the U.S. were in science and engineering compared with a world average of 27 % and 52 % in China. Universities in the European Union granted 40 % more science and engineering doctorates than the United States, with that figure expected to reach nearly 100 % by about 2010 according to Freeman's paper.
  2. 1. ^  “Outsourcing” and “Saving Jobs” by Thomas Sowell
  3. 2. ^  Should we “Save Jobs”? by Walter Williams
  4. 3. ^  "Outsourcing is the Kool" (kOOL PEOPLE)

Literature

Mark Kobayashi-Hillary. 2004. (2nd ed 2005) Outsourcing to India. ISBN 354023943X.


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(2nd ed 2005) Outsourcing to India. ISBN 354023943X. Notable players who have moved on to the NHL:. 2004. Coaches. Mark Kobayashi-Hillary. Forwards. Outsourcing departments like Accounts, Payroll and Procurement is now common practice, as seen in August 2005 at the University of Portsmouth. Defensemen.

It is argued a malicious implementation of the Higher Education Role Analysis (HERA) in the UK may force Higher Education administrative and support staff to prematurely retire or seek for new employment in other organisations, thus freeing of staff many departments which could then be effectively outsourced. Goaltenders. presidential candidate John Kerry blasted firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their fair share of US taxes during his unsuccessful 2004 campaign, calling such firms "Benedict Arnold corporations," in reference to the infamous traitor Benedict Arnold. Other achievements:. Democratic U.S. Personal awards by SM-sarja and SM-liiga:. That database contains personal and work-related information, enabling employers to verify a staff member's credentials and allowing police to track the background of workers. Other awards for the club:.

NASSCOM, which is a forum of IT and ITeS companies, has attempted to address these fraud concerns in India by creating the National Skills Registry. Immonen, a long-time Jokerit player but rookie head coach, was moved from the job in November and Curt Lindström hired to salvage the team. Intel would not put up with such fraud. The spree of departures, combined with rookie coach Waltteri Immonen's coaching debut, led Jokerit to an abysmal early season, with a win-loss-tie record of 5-11-4 after 20 games. The report concluded that fraudulent practises such as "faking bills to claim your allowances like conveyance [and] drivers’ salaries" were some common malpractices in India. The last departure occurred just one day before regular season play started, when goaltender Tim Thomas signed with the Boston Bruins. The firings followed from Intel's internal Business Practice Excellence programme of expenses claims. When the NHL lockout ended in 2005, many players were lost to NHL teams and to other teams in Europe: Campbell, Väänänen, Selänne, Metropolit, Pasi Häkkinen, Valtteri Filppula and Tomi Mäki.

In 2005, Intel discovered and fired 250 Indian employees after they faked their expense reports. After the NHL lockout. Outright fraud is also a concern. The two teams faced off in the finals, with Jokerit losing three games to one and having to settle for the silver. (See the full report.). With a strong team, Jokerit looked set to win the regular season and take the championship when an inexplicable late-season collapse allowed Kärpät to take and keep the regular season lead. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified the bank. Teemu Selänne officially joined the Jokerit lineup in December, but he spent the spring rehabbing his injured knee and was unable to play any games for the team.

In April of 2005, a high-profile case involving the theft of $350,000 from four Citibank customers occurred when Indian call center workers in Pune, India, acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. As the NHL lockout was extended, Jokerit hired Brian Campbell, and Ossi Väänänen returned to his hometown team from the Colorado Avalanches in December. There are also security issues concerning companies giving outside access to sensitive customer information. Thomas played in every game of the season bar two with a save percentage of 94.59% and a record-breaking 15 shutouts, for which he won the "Kultainen kypärä" MVP award. With these traditionally "safe" jobs perceived to be endangered, this raises questions regarding whether origin countries can maintain any comparative advantage given the losses in both low and high-value jobs. Another important Jokerit acquisition was goalie Tim Thomas from the Boston Bruins organization. Proportions of workers trained for Science, Technology, Engineering, and Mathematics (STEM) fields fields in developing nations are viewed to outstrip traditional technology leaders such as the U.S. Metropolit became a firm fan favorite, and many were sorry to see him leave the Finnish league after the 2004-05 season.

There is also little incentive given that the jobs in their new field could also be outsourced as well. In the spring of 2003 Jokerit acquired forward Glen Metropolit from the Washington Capitals organization; despite his unimpressive NHL record, Metropolit became scoring leader of Jokerit in both the 2003-04 regular season and playoffs, as well as the 2004-05 regular season. Retraining to their current level in another field may not be an option due to years of study and cost of education involved. The 2002-03 and 03-04 seasons yielded no medals for Jokerit. However, some of these workers are already highly educated and already possess a bachelor's and master's degree. Jokerit won their sixth Finnish championship in 2002. One solution often offered is retraining of domestic workers to new jobs. In the 2000s, the management have regained what the supporters consider more reasonable an attitude by concentrating back on SM-Liiga, but the line-ups have had a notable turnover rate between seasons - a distinct core has not developed or been preserved.

Policy solutions to outsourcing are also criticized. To the next millennium. Dealing with lackluster outsourced service is a negative surprise after the money is already spent. However, despite having sparkling line-ups, their performance fluctuated, ending up winning "only" Finnish bronze in 1998 and silver in 2000, and repeatedly having no success in European Hockey League (which turned out as a major flop in itself). Customers only experience outsourced service and support after they have spent their money since sales is generally done in-house by the original company. As they set foot at Hartwall Areena, the club signed several star reinforcements seen to be required to win the two professional leagues and to replace the now slightly aged core. However, service and support are often not considered by customers as part of their original purchases. Most of these plans did not meet with success, but the new venue turned out to be a gold-mine for the club's business.

Defenders of outsourcing say if this were true, then companies would experience market forces compelling them to return service and support handling back from the outsourced company. They focused on the new European Hockey League expecting it to evolve into a competition more money-making than SM-Liiga, and sought various other ways to expand. Criticism of outsourcing from the public and media sometimes tend to concentrate on lackluster customer service and technical support being provided by either local workers who are not actually employees of the company, or by overseas workers attempting to communicate with Americans in broken or incomprehensible English. Ownership was reformed into Jokerit HC Oyj, a public limited company. Thus, outsourcing is criticized as it represents a new threat to labor, contributing to rampant worker insecurity, and reflective of the general process of globalization where the United States government fails to mediate business-labor relations in a way conducive to prevailing values that places the American middle class worker as a central priority. His efforts yielded Jokerit their own home venue Hartwall Areena in 1997 - first such privately owned in Europe. Outsourcing appears to work contrary to the claim that “free trade” will create the “jobs of tomorrow” in America when high-tech or high paying white collar jobs are transferred to or created in foreign countries. Harkimo further converted the club from semi-professionalism towards his ideal of professional sports entertainment, which was unmistakably adopted from NHL.

This is especially true for high-tech workers who were promised the “jobs of tomorrow”- a phrase Bill Clinton iterated in 1994 to justify his conservative position on NAFTA. Together with the above-mentioned junior champions they formed a core of a dynasty of thriving times: Jokerit won Finnish championship in 1992, 1994, 1996 and 1997, and European Cup in 1995 and 1996, plus Finnish silver once and European bronze once. Outsourcing appears to threaten the livelihood of domestic workers and the American Dream. Several successful acquisitions were signed, most memorably Otakar Janecky, who manned the first line center for several seasons, becoming the club's all-time best point scorer; Petri Varis, who became the club's best goal scorer of the 1990s; and forward Antti Törmänen. The poll of over 1,000 Americans was conducted in August 2004 (See Zogby International survey results online at zogby.com). Thus, they were able to reinforce the team with first class talent. A Zogby International poll reports that 71% of American voters believe that “outsourcing jobs overseas” hurts the economy and another 62% believe that the US government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource. In a few years, Jokerit were the wealthiest Finnish sports club.

Criticism of outsourcing, from the perspective of US citizens, by-and-large, revolves around the costs associated with transferring control of the labor process to an external entity in another country. This proved to be the final stroke of luck the club needed: the disagreements vanished once and for all and Harry Harkimo established himself as an efficient businessman, being able to conduct a rapid recovery of the economy. This debate did not center on problems of declining quality of customer services but on the threat to US jobs and work. He appointed himself the chairman of the board, discontinued all managerial positions and nominated his wife Leena Harkimo the managing director (who held the task up to her election to the Parliament of Finland in 1999). The 2004 US presidential election race focused on outsourcing to some degree. In 1991 an investor withdrew and board member Harry Harkimo got credentials to a double majority of shares. It has been therefore argued that quality levels of customer service and technical support of outsourced tasks are lower than where they have remained 'in-house'. The Harkimo era.

Because "outsourced" workers are not actually paid agents of the company, it has been argued that there is less incentive for the agent to show loyalty or work ethic in its representation of said company. But once again, despite the phenomenal boost in popularity supported by the prominent scorer Selänne and other young star players, the owners ran into severe financial problems, caused by incompetent management and disagreements within the board. In December 2005, nearly 50 people were indicted in connection with a scheme that bilked at least $200,000 from Katrina relief fund at Red Cross claim center in Bakersfield, Calif., which handled calls from storm victims. The team, reinforced with the junior champions, orchestrated a quick promotion back to the top level, now called SM-liiga. (See the full story.). Kalervo Kummola, who played the leading role assembling the company, sat in its board up to 2002. For example, 40 million credit card numbers were stolen in June 2005 at CardSystems Solutions in Tucson, Arizona. They established Jokeri-Hockey Oy and became the first limited company based sports club in Finland.

Advocates of outsourcing also claim that outsourcing-related fraud is insignificant, averring that such malpractices can occur in any country. Now that the club was spiced with such promising, new willing owners turned up to save them. [3]. In 1988 their 20-year-olds won the Finnish junior championship with several prospective stars: defenceman Waltteri Immonen would be captain of the team 1991-1999; Mika Strömberg the club's all-time best-scoring defenceman; Ari Sulander the main goaltender 1993-1998; forward Keijo Säilynoja a goal scorer and a penalty-shot specialist; and Teemu Selänne the NHL record-breaker. Nationally, 70,000 computer programmers lost their jobs between 1999 and 2003, but more than 115,000 computer software engineers found higher-paying jobs during that same period. In the middle of the bleakest hour of their history, with Jokeriklubin Tuki Ry seeking to discontinue their association, new blood was rushed into Jokerit. [3] Drezner also points out that large software companies such as Microsoft and Oracle have increased outsourcing and used the savings for investment and larger domestic payrolls. Jokerit faced the imminent relegation in 1987.

Professor Drezner reports that for every dollar spent on outsourcing to India, the United States reaps between $1.12 and $1.14 in benefits. Few others, apart from the longtime goaltender Rauli Sohlman, remained. That in turn makes us all richer.” [2]. The first line was a shambles as wing Risto Kerminen departed and center Jari Lindroos almost did, but though he had signed elsewhere, the contract was illegitimately nullified. ‘Creative destruction’ is a discovery process where we find ways to produce goods and services more cheaply. Only a few years later, they had to avert bankruptcy twice, which struck a blow to their credibility, as a mass desertion of the players ensued. The automobile cost the jobs of people who took care of horses or made saddles, carriages, and horseshoes.” [1] Walter Williams, another economist, said “we could probably think of hundreds of jobs that either don't exist or exist in far fewer numbers than in the past--jobs such as elevator operator, TV repairman and coal deliveryman. However, the management ran into unexpected financial problems, and success soon withered.

Economist Thomas Sowell from the University of Chicago said “anything that increases economic efficiency--whether by outsourcing or a hundred other things--is likely to cost somebody's job. They had a near-perfect season, losing only the 1983 finals extremely narrowly - and bitterly - to local rivals. Because outsourcing allows for lower costs, even if quality reduces slightly or not at all, productivity increases, which benefits the economy on aggregate. Having signed mainly outcasts of other clubs, they suddenly hit jackpot: Soviet Union's national team defenceman Nikolai Makarov was transferred to Jokerit. the firm is trying to maximize the quality of its product given cost (its productivity). Under new management, the club didn't instantly shake off its wobbliness, but then they peaked for one season. A firm's motivation for replacing workers with machines is identical to the motivation for outsourcing, i.e. New owners, Jokeriklubin Tuki Ry, were a conventional association supervised by its board.

Some economists suggest that government training programs be provided. When a replacement candidate turned up in 1980, Mäkinen retired from the ownership, though he went on in the club's junior organisation up to the 1990s. However, economists do concede that labor is not always perfectly mobile and that some workers may have difficulty getting new jobs. With Mäkinen's controversial manner of management added to these, the club turned into a center of turbulence. Some argue that greater profits to the labor owners lead to higher consumption, which leads to further job creation, allowing those who lost jobs to gain jobs in other sectors of the economy. Success slowly declined and Jokerit had to qualify against relegation several times. Although workers’ jobs were lost from this replacement of workers with machines, the Ford Motor Company made more money by lowering costs (or increasing quality, thereby increasing revenue). He started downsizing the team's budget by methodically replacing departing stars with junior players.

Economists argue that machines on the car assembly line must have a higher quality to cost ratio than workers because, if they didn’t, there would be no incentive for the firm to replace workers with machines. Despite winning Finnish championship silver in 1971 and gold in 1973, Jokerit didn't develop financially profitable for Mäkinen. Today these workers are replaced by machines because they are cheaper in the long run, produce better quality products, or a combination of both (the firm is trying to increase its quality to cost ratio, quality being defined by the consumer and inferred from revenue). Kanada-sarja didn't survive the 1970s, but Jokerit benefitted from it through a steady flow of emerging talent including Jari Kurri, and by gaining a strong popular base in the outer urban zones of Helsinki. American Motor Company Ford relied heavily on workers in the past to assemble car parts. Mäkinen also enhanced the club's junior organisation by launching a competition of their own, called Kanada-sarja, with 500 participating junior players, a figure that cumulatively tripled in a few years. Some economists have argued that outsourcing is a form of technological innovation analogous to machines on a car assembly line. This became the trademark of Jokerit that stuck all the way to the late 1990s.

That many large businesses outsource and continue to outsource suggests that in many cases outsourcing is successful in that it increases product quality, lowers costs substantially, or both. He guided the team, with success, towards a play that demanded technique and clever tactics. Proponents of outsourcing believe that arguing that outsourcing leads to lower product quality is pointless because if it were true, consumer demand will force firms to shift back to producing the good or service in-firm rather than out-firm. Lampainen, however, reckoned physical play unsuitable for the line-up at hand (consider nallipyssyketju). If the company does it correctly, it benefits from higher profits. SM-sarja underwent a tactical revolution as physical, mean play became a means to success. The decision to outsource is like the decision to expand a business overseas, to incorporate computer technology, or to hire new workers. In 1969, IIHF had loosened amateur rules by permitting bodychecking anywhere in the rink (old rules allowed bodychecking only in defensive end).

Critics of outsourcing often talk about outsourcing failures without mentioning instances of outsourcing success. Other mentionworthy reinforcements, that came later, were forward Jouko Öystilä and defenceman Timo Saari, and finally, head coach Matti Lampainen. The decision to outsource is like any other business investment decision in that there is risk. Among them were the national team regulars defenceman Ilpo Koskela with forwards Henry Leppä and Timo Sutinen, whose relationship with the club lasted long. In fact, many American companies like Dell have moved customer service divisions back to America as a result of poor quality [2]. Immediately after the promotion was secured, Mäkinen began an aggressive acquisition of star players. But the outsourcing firm has freedom to move a firm department or division back home if its profits are suffering as a result of poor quality. Promotion to the highest level, SM-sarja, took place two years later.

One criticism of outsourcing is that product quality suffers. With him, Pentti Hiiros and Timo Kyntölä would form nallipyssyketju ("cap gun line", referring to their lack of height - Hiiros was the tallest at 172 cm) until 1975, when the latter retired. [1]. Even though dramatic changes in the line-up did not appear directly, only a few players from Töölön Vesa saw prolonged employment: Timo Turunen would be the most distinguished, remaining even today as the club's all-time goal scoring leader. A recent poll of economists by the Wall Street Journal found that only 16 % of them saw outsourcing as having a significant impact on the overall job picture. Mäkinen did not intend his new club to loiter in the lower series. "Offshoring”, on the other hand, represents a relocation of an organizational function to a foreign country, not necessarily a transformation of internal organizational control. Their home venue was Helsingin jäähalli.

In short, “outsourcing” means sharing organizational control with another organization, or a process of establishing network relations within an organizational field. The insignia, winking jester, was adapted from jokers of various card decks and drawn by graphic designer Jorma Hinkka. “Offshoring”, in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. The club's sole owner Mäkinen chose to wield sovereign power, becoming in practice also the board and managing director. When this third party is located in another country the term “offshore outsourcing” makes more sense. Officially Jokerit were established on October 27th 1967 at their constitutional meeting. To be consistent, “outsourcing”, in corporate context, represents an organizational practice that involves the transfer of an organizational function to a third party. Master-builder Aimo Mäkinen seized the opportunity to establish a semi-professional sports club of his own, and for the price of half of Vesa's ice hockey debts the new ice hockey club inherited everything, including junior players and the vacant position in second highest Finnish series, Suomen sarja.

Note that “outsourcing”, “offshore outsourcing” and “offshoring” are used interchangeably in public discourse despite important technical differences. Jokerit would not exist without the debts-incurred ice hockey branch of Töölön Vesa amateur sports club, who were faced with having to discontinue their resource-demanding ice hockey activities in 1967. In some cases, the agents are not allowed to even give out their real name. Early history. The agents were often not able to tell the customer they did not actually directly work for the original manufacturer. . These agents generally worked in call centers where the information needed to assist the calling customer was indexed in a computer system. They play in Helsinki, Finland at the Hartwall Areena.

In some cases these companies hired technical writers to simplify the usage instructions of their products, index the key points of information and contracted with temporary employment agencies to find, train and hire generally low-skilled workers to answer their telephone technical support and customer service calls. Jokerit are an ice hockey team in the Finnish SM-liiga. The term "outsourcing" became more well known largely because of a growth in the number of high-tech companies in the early 1990s that were often not large enough to be able to easily maintain large customer service departments of their own. 91 Otakar Janecky. This usually involves continued direct or indirect management and decision-making by the client of the out-tasking business. 24 Waltteri Immonen. A related term is out-tasking: turning over a narrowly-defined segment of business to another business, typically on an annual contract, or sometimes a shorter one. 5 Esa Tikkanen.

Many companies, most notably Dell and AT&T Wireless, have gained significant negative publicity for their decisions to use non-US labor for customer service and technical support; one of the most prominent complaints being the expectation that the replacement staff will have more trouble communicating with customers. Sean Bergenheim (Jokerit 2001-2004; New York Islanders 1st round pick in the 2002 draft, #22 overall). Due to this demand call centers have sprung up in Canada, China, Eastern Europe, India, Israel, Ireland, Pakistan, Philippines and even the Caribbean. Ossi Väänänen (Jokerit 1996-2000; Phoenix Coyotes 2nd round pick in the 1998 draft, #43 overall). The logical extension of these decisions was of outsourcing labor overseas to countries with lower labor costs, this trend is often referred to as offshoring of customer service. Kari Lehtonen (Jokerit 1999-2003; Atlanta Thrashers 1st round pick in the 2002 draft, #2 overall). The overhead costs of customer service are typically less where outsourcing has been used, leading to many companies, from utilities to manufacturers, closing their in-house customer relations departments and outsourcing their customer service to third party call centers. Teemu Selänne (Jokerit 1988-92; Winnipeg Jets 1st round pick in the 1988 draft, #10 overall).

Outsourcing business is characterized by expertise not inherent to the core of the client organization. Jari Kurri (Jokerit 1977-80; Edmonton Oilers 4th round pick in the 1980 draft, #69 overall). Many companies also outsource customer support and call center functions, manufacturing and engineering. forward Glen Metropolit (2003-05). Business segments typically outsourced include Information Technology, Human Resources, Facilities and Real Estate Management and Accounting. forward Petri Varis (1993-97, 1999-2002, 2003-05). Many companies look to employ expert organizations in the areas targeted for outsourcing. forward Juha Lind (1990-97, 98-99, 2004-05).

In theory, this business segment should not be mission-critical, but practice often dictates otherwise. Sami Helenius (2003-04). Organizations that deliver such services feel that outsourcing requires the turning over of management responsibility for running a segment of business. Juha Lind (1991-99, 2004-2005). Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust. Petri Varis (September-November 2005). Likewise, buying services from a provider is not necessarily outsourcing or out-tasking. Marko Jantunen (November 2005-).

Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. 94 - Teemu Kuusisto. Outsourcing and/or out-tasking involve transferring a significant amount of management control to the supplier. 72 - Roman Vopat. Outsourcing is defined as the management and/or day-to-day execution of an entire business function by a third party service provider. 61 - Tommi Oksa. . 44 - Riku Rahikainen.

EDS was the first company to establish the outsourcing business. 39 - Jesse Uronen (juniors). Outsourcing became a popular buzzword in business and management in the 1990s. 38 - Arto Kuki. Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country. 30 - Esa Kivistö. A related term, offshoring, means transferring work to another country, typically overseas. 23 - Petri Varis.

Outsourcing is a business decision that is often made to lower costs or focus on core competences. 22 - Tommi Santala. Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. 20 - Petri Pakaslahti. ^  "Outsourcing is the Kool" (kOOL PEOPLE). 18 - Ilari Filppula. 3. 16 - Toni Dahlman.

^  Should we “Save Jobs”? by Walter Williams. 15 - Arto Koivisto. 2. 13 - Hannes Hyvönen. ^  “Outsourcing” and “Saving Jobs” by Thomas Sowell. 11 - Tomek Valtonen. 1. 9 - Tony Virta (injured).

Universities in the European Union granted 40 % more science and engineering doctorates than the United States, with that figure expected to reach nearly 100 % by about 2010 according to Freeman's paper. 77 - Martti Järventie. were in science and engineering compared with a world average of 27 % and 52 % in China. 61 - Tero Konttinen. He found that in the year 2000, 17 % of university bachelor degrees in the U.S. 40 - Sami Lepistö. ^  This view is borne out by a recent study by Richard Freeman at the National Bureau of Economic Research in Washington. 26 - Jan Latvala.

25 - Kari Martikainen. 21 - Kevin Kantee. 14 - Ville Uusitalo. 12 - Markus Kankaanperä.

7 - Mikko Kalteva. 4 - Samuli Jalkanen. 63 - Tom Askey. 29 - Steve Passmore.

35 - Joonas Hallikainen. 34 - Niko Hovinen (juniors). In the 2004-05 season, Tim Thomas broke the SM-liiga shutout record with 15 shutouts during the regular season. Best coach (since 1978): Reijo Ruotsalainen 1983, Raimo Summanen 2002.

Best plus/minus (since 1978): Arto Sirviö 1984, Waltteri Immonen 1992, Erik Hämäläinen 1993, Petri Varis 1996. Gentleman player (since 1954): Jari Kapanen 1975, Teemu Selänne 1991, Keijo Säilynoja 1992, Waltteri Immonen 1996, Ville Peltonen 2003. Most goals in regular season: Timo Turunen 1973 and 1974 (shared), Teemu Selänne 1992, Petri Varis 1997, Pasi Saarela 1999. Most points in regular season: Timo Turunen 1973, Timo Sutinen 1974 and 1975, Petri Varis 1997 and 2001.

Best defenceman (since 1978): Nikolai Makarov 1983, Erik Hämäläinen 1993, Mika Strömberg 1996. Best goaltender (since 1978): Rauli Sohlman 1983, Ari Sulander 1996, Kari Lehtonen 2002 and 2003. Best player (Kultainen kypärä, since 1987): Teemu Selänne 1991, Tim Thomas 2005. Aaro Kivilinnan muistopalkinto (best Finnish club age classes combined, since 1973): 1976, 1996, 1997 (shared), 1998, 1999, 2000, 2003.

three times silver and four times bronze. C-juniors (16-year-olds) 1976, 1977, 1978, 1997, 2000

    . five times silver and six times bronze. B-juniors (18-year-olds) 1976, 1999, 2003
      .

      four times silver. A-juniors (20-year-olds) 1988, 1996, 1999, 2000

        . Junior Finnish championships:
          . Continental Cup 2003.

          bronze 1993. European Cup 1995, 1996

            . silver 1971, 1983, 1995, 2000, 2005 and bronze 1998. Finnish championship 1973, 1992, 1994, 1996, 1997, 2002
              .

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