The Pros and Cons about Outsourcing free essay sample

Diversity is crucial and inevitable for any service organisations to create opportunities for more innovative ideas. Diversity involves individuals from different ethnic background, culture, age, gender, status and personality characteristics to communicate and share values. To promote and implement diversity, managers should have an effective recruitment strategy. Although diversity creates opportunities, it can create contemporary issues. The issues on diversity are rather complex. This is due to the changing nature of social trends organisations need to adapt. For example, there has been an increase of women entering in the workforce by 40 per cent since August 1961 [ABS, 2013. ] and an increase of employment in part-time and casuals since 1979. The percentage of full-time employees fell from 42 per cent to 39 per cent, while part-time increased from 25 per cent to 36 per cent [Lawson, 2007. ]. There are other several trends which influence the nature of diversity in the service industry. These include the recognition of Australia characteristics as more of a multicultural country. We will write a custom essay sample on The Pros and Cons about Outsourcing or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The country is also known as an aging population and is skewed towards white-collar services. An increase of technology development creates more of a diverse country through networking. This suggests that social attitudes, cultural trends and values can often change. For example, Qantas had the difficulty of maintaining the company’s consistency in terms of performance due to the changing nature of diversity. Work-life balanced positions are more in demand. Thus Qantas has responded in employing more casual and part-time employees. This change has driven Qantas to reduce costs and improved its international competitiveness. There has also been an increase in participation of women in the workforce. Qantas has the total 42 per cent of women in which only 23 per cent of women occupy senior roles [Broadbridge, D. (2013: 68)]. Thus Qantas had implemented family practices to maintain women within the airline. This reinforces that, there is a need of ongoing diversity management to gain a productive diversity. Hence organisations are able to gain a sustainable competitive advantage. Managing diversity is defined as â€Å"the challenge of meeting the needs of a culturally diverse workforce and of sensitizing workers and managers to differences associated with gender, race, age and nationality in attempt to maximise the potential productivity of all employees† [Ellis and Sonnenfield (1994: 82)]. Tesco, a UK customer focused retailer has identified the essential of diversity management. To reach its maximum potential goals, Tesco has established a clear mission statement – â€Å"we make what matters better, together† [Tesco PLC, 2013]. The retailer’s mission statement promotes productive diversity. Tesco has recognised the importance of inclusion to ensure high employee satisfaction. The strong communication between managers and employees encourages each employee to maximise their own potential productivity against the organisation values and its benchmark. The industry further provides flexibility to all employees where â€Å"everyone is welcome† to motivate employees to become further productive. Therefore as a result, Tesco has gained significant benefits. These benefits include an increase of diverse knowledge and skills towards customer services, innovative opportunities, positive reputation of the organisation and an increase of service productivity. Thus it reinforces the importance of effective diversity management to gain a sustainable competitive advantage. A financial company, Westpac has also incorporated diversity management strategies to ensure the company achieve its vision – â€Å"To be one of the world’s great companies, helping our customers, communities and people to prosper and grow† [Westpac Group Ltd, 2013.]. Westpac has established The Westpac Group Diversity Council and diversity policy to ensure their objectives have been achieved. The policy outlines that managers should have continuous review and discussions in addressing with any emerging diversity-related organisational issues. This provides the organisation a constant strategic and effective diversity management evaluation. It also outlines engagement strategies such as effective communication to increase its productive diversity. Hence ensures the company reaches its vision. Westpac Ltd, 2013, has clearly identified within its industry that, 43% of employees (36% men and 48% women) work flexibly, over 12% employees have disability, 61% employees are women are and 32% of employees were born outside of Australia and New Zealand. These statistics suggests Westpac have provided an inclusion of all recruited employees to promote a diverse service culture. As result, Westpac has gained positive response in managing diversity. The finance company has received recognition as one of the world’s most ethical companies [Ethisphere Institute, 2013.]; top ten employer for LGBTI (Lesbian Gay Bisexual Transgender and Intersex) inclusion [Australian Workplace Equality Index Awards, 2013. ]; won the Gender Equity in workforce [AHRI Diversity awards, 2013. ]; won the Employer of Choice for Women Award [Workplace Gender Equality Agency, 2013. ] and has been ranked 10th in the Global 100 list of the world’s sustainable corporations. Therefore it emphasises the need of diversity management in service industry to maintain a sustainable competitive advantage. Diversity can provide organisations great benefits, but it is also the cause of contemporary issues and conflicts when organisations need employees to think in the same direction. For example, according to Sunday Morning Herald, in 2002, TPG had a discrimination-related issue – a Muslim employee had asked the organisation to have a five minute break for his prayer was rejected. The issue was brought to the Australian Industrial Relations Commission. As a result, TPG had failed to recognise its need of incorporating diversity with its culture values. Thus there was a need in changing its work ethnic values. Conflict can arise due to the differences of stakeholder’s values and miscommunication. Hence it is difficult to measure fairness and equality between the different cultures and social and ethical values. For example social etiquette is vital in a diverse service industry. The term â€Å"respect† can be interpreted in different perspectives. This is due to language barriers and different cultural aspects. It is also difficult to recruit a diverse workforce that is able to parallel with the organisational culture values. For example, most recruitment is based on skills, personal traits, experience and qualifications that are fitted to the organisation’s value. Conflicts are also inevitable, thus, managers should implement conflict resolution strategies to decrease the amount of conflicts. Conflict resolutions include identifying the issue, negotiating, mediating, grievance procedures and involvement of courts and tribunals. Thus, these strategies are a vital tool for service industries to promote productive diversity. Identifying the issue is the first step when a conflict arises. Managers who recognises the cause of the conflict are able to prevent further complex disputes. To avoid misunderstandings, managers should use active listening skills. This includes mirroring, paraphrasing, summarising, clarifying questions and providing the speaker motivational response. Negotiating is a bargaining process between two or more parties seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict [Chapman, S. 2011. ]. Mediation is the process of using a third party to settle a dispute [Samson, D.  and Draft, R. 2012. ]. Both solutions provide an ongoing communication between stakeholders to reach a â€Å"win-win† situation. Grievance procedures are used in certain conflict situations which must be handled in procedure. This method provides clear instructions on resolving a dispute. Courts and tribunals are a third individual mechanism that enforces a solution based on the conflict circumstance. Although it is used effectively to end a dispute, it could be argued that, this mechanism would be the causes of organisations to have further internal disputes. This is due to the negative publicity. In 2011, Qantas had a dispute in terms of different values between CEO and the union and employees. It could also be argued, that this conflict is due to poor management. The issue was based on providing employees a sense of job security, due to the â€Å"cultural shift† of outsourcing parts of its operation to Asia. The lack of flexibility and ineffective communication due to the top-down management hierarchy were also the causes of conflict. As result, the dispute had become internationally known and major costs were involved. Qantas human resource managers should have clearly communicated its vision to provide a sense of employee’s job security. Integrating diversity in the workplace is not only to create opportunities but it is to abide legal ethics. The legislation enforced in Australia to ensure equality employment is Equal Employment Opportunity Act 1987 (Cth). The Equal Employment Opportunity (EEO) outlines that all employees have equal access to the opportunities that are available, including promotion possibilities, overtime availability and leave entitlements [Chapman, S. 2011]. Thus, it could be argued, that, the legislation promotes diversity. Organisations which fail to abide the legal systems would be subjected to hefty fines and gain a negative industry reputation. For example, in 2003, the phone company, TPG had discriminated a female pregnant employee under the EEO. The company did not offer a suitable part-time position after her maternity leave. As a result of this issue, TPG had to cover $75,000 of damage [Sunday Morning Herald, 2003. ]. This suggests poor productive diversity. It is recommended, that TPG should evaluate its diversity management and its culture values. This case study also suggests the need to reform the legislation where women with pregnancy are included to avoid further conflicts. Thus, the Equal Employment Opportunity Amendment Act 2012 (Cth) legislation further reinforced and depicts issues on conflicts based upon discrimination, harassment and racism. Westpac and Qantas have obligated to promote EEO within the workforce. Westpac has effectively promoted EEO and its values to employees. The establishment of the diversity council group had lead Westpac to manage its diversity effectively. Through continuous evaluation, Westpac has created high staff morale. Thus the company is able to maintain its low staff turnover and absenteeism. Qantas has established a Diversity Statement to ensure the airline industry is obligated to the EEO. The EEO provides Qantas to promote diversity through leadership, talent and development programs, flexible work arrangements and recruitment and selection processes [Qantas Airways Ltd, 2013. ]. This management approach supports Qantas objectives, delivers competitive advantage and benefits to customers. In conclusion service industries that effectively implement diversity management allows organisations to achieve its maximum potential goal. Hence it is an essential strategy for managers maintain a sustainable competitive advantage through productive diversity. It is also an opportunity for organisations to embrace diversity to become more innovative. Although productive diversity allows positive recognition response like Westpac, it can also be the cause of contemporary issues. Unable to identify contemporary issues will lead to conflicts. Conflicts are inevitable. Therefore, there is a need for conflict resolution mechanism to maintain ethical practices in the workforce. Further disputes can create a disadvantage. For example, Qantas should have positive reinforcement if there is a need for change of work practices. The lack of job security has lead unions and employees to go on strike. As result, major financial costs were involved and negative publicity. The establishment of the Equal Employment Opportunity Act 1987 (Cth) is enforced for all organisations to abide. The legislation ensures equity and fair ethical practices in the workforce. Failure to abide the legislation results in disadvantage outcomes. This could include negative publicity, increase of costs and decrease staff morale which leads to high staff turnover and low productive diversity. Overall the importance of incorporating diversity management, conflict resolution and equal employment opportunity determines the effectiveness in achieving organisations objectives. It is strongly recommended that, service industries should continuously evaluate its effectiveness of diversity management and conflict resolution to ensure an increase of productive diversity.