In the 1957 classic movie “Desk Set, the technology revolution begins. The setting takes place at the “Federal Broadcasting Network.”  Bunny Watson (Katharine Hepburn), is responsible for researching and answering questions at the organization’s library.  With a merger pending, the company looks to automation.  In fact, organization ordered two computers  called “Electronic Brains.” Richard Sumner (Spencer Tracy), the computer inventor, is brought into the network in order to phase out the library functions in lieu of the human staff.  Bunny Watson fights to demonstrate the value of her human existence.

In a hypercompetitive environment, many businesses are outsourcing major functions rather than perform them in-house.  Today’s businesses have built elaborate systems for better efficiency and effectiveness.  Of course, they are driven by the quest for increasing profitability.  Robert Jacobs, Richard Chase, and Nicholas Aquilano, authors of Operations & Supply Management, suggest that operations management has been a key element in the improvement in productivity in businesses across the world.  Many times executive focus on the major expense to operate – labor.

It’s a simple equation:  productivity equals outputs divided by inputs.  If organizations can reduce their inputs for their operations, they can increase output (more profit).  Therefore, companies seek to reduce their inputs to obtain ‘more get.  Two of the chief strategies are to outsource non-core functions abroad or add new technologies to generate new efficiencies. These strategies are aimed at reducing labor costs, primarily people.

Since 2000, over 3 million U.S. jobs in the manufacturing sector have been moved abroad to countries like China, India, and
Korea. Yet, few executives worry about the aftermath of outsourcing initiatives.  The remaining workforce is shell shocked and
stressed since they are required to do the work of the laid off workforce.  Sadly, many supervisors feel that these workers should be happy to have a job.

Gareth Jones and Jennifer George, authors of Contemporary Management, maintain that one of the most important resources in all organizations is the human capital component. Many people wonder if American’s businesses cannot compete in
manufacturing and other high tech industries, will they forever forgo the Great American Dream for next generation of workers.

How do organizations stimulate their workers while outsourcing key components of their organizations abroad for greater efficiencies?

© 2011 by Daryl D. Green