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Was Outsourcing to India the Right
Move?

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Case Analysis

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3/5/2019

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Table of Contents
What would you do, if you were the CEO & why? ................................................................................ 3
CAGE Distant Framework: ..................................................................................................................... 3
PESTLE Analysis: .................................................................................................................................. 4
What organizational design changes would you implement? ................................................................. 6
What changes in HRM would be necessary? .......................................................................................... 7
How would you bring about necessary organizational changes?............................................................ 7
Bibliography ........................................................................................................................................... 9

2
What would you do, if you were the CEO & why?
So if I were in position of Galbenski as a CEO, I would inspect the Indian market in
accordance with the following models:
1. CAGE Distant Framework
2. PESTLE Analysis

CAGE Distant Framework:

When companies are crafting global strategies, it needs to keep into its considerations all
sorts of potential challenges that a particular international market may have. This framework
tends to identify Cultural, Administrative, Geographic & Economic differences between
countries that the company must address before entering their markets.. These are the factors
what define the very market forces in any industry and once a company manages to overview
a international market on these parameters, it may have a full scale projection of that very
market. (Pankaj Ghemawat, 2016)

Elements Benefits Favorable/Non Favorable

for us?
Cultural  India is the most  YES
diverse country in
terms of cultures &
languages. As per
MIT research diverse
workforces are more
productive than non
diverse workforces
Administrative  India is world’s 2nd  YES
largest English
speaking country with
125 million who can
speak English. Our
primary targeted
resources would be
accountants who are
well versed in English
so we may find lots of
them over there
Geographic  US & India are  NO
around 8400miles
apart. So we must see
how to cope up with
the distant.  YES
 India follows a
uniform time zone
unlike China &
Russia
Economic  Unemployment rate  YES
in India rose to record

3
 high of 7.9% which
means more people
are willing to work
then there are jobs
available. It also
means that we would
have more people be
interested to work for
us

So in terms of CAGE Distant Framework, more factors seem to be in our favor to outsource
to India. There is only one factor in the Geographic element which is regarding the distance
between India & US but I think that can be conveniently resolved relying on technology. So
based upon this model, I would definitely decide to outsource to India since it seems like a
calculated decision to me.

PESTLE Analysis:
This analysis usually analyzes the macroeconomic factors that tend to govern the market. It
then gives us an idea if the market is feasible for an organization or not. The very factors that
we tend to use are Political, Economic, Social, and Technological & Legal.
Factors Implications Favorable/Nonfavorable
Political  Indian Government  Favorable
runs a specialized cell
National Outsourcing
Association whose
mandate includes
bringing in more
foreign companies to
India for human
development. Such
companies also create
jobs that bring down
the unemployment
rate. So in India Govt.
is toning down on
entry barriers for
companies to
outsource  Favorable
 Stable Govts. No
military coups like in
other 3rd world
countries
Economic  Indian Govt. has been  Favorable
working on financial
inclusion and services
like Paypal, Payoneer
are readily available

4
 in India
 per hour cost of an  Favorable
Indian resource
would be immensely
lesser than the per
hour cost that we may
incur in US or even
China
Social  It is expected that by
2020, the avg. age of
India would be 29  Favorable
which means lots of
young people. Govt.
is already investing
on education & health
to develop the
younger lot and so
that they can attract
good jobs
Technological  Modern India has a  Favorable
great inclination
towards technology
and in Banglaore as
they claim they have
the Asian Silicon
Valley. Their IT
graduates are now
working in top IT
firms at Palo Alto,
California
Legal  As we already  Favorable
mentioned about
NOA whose sole job
is to bring more
companies to
outsource in India are
round the clock
making sure they tone
down entry barriers
for such companies
Environmental  India is seriously  Favorable
working to tone down
the carbon emissions.
As par their govt.
sources they plan to
eradicate fossil fuel
vehicles in India and
by 2030 India shall
only have electric
cars. This tells about

5
 their concern to
reverse climate
change and improve
the environment

So the PESTLE Analysis also gave us favorable results so we shall go with our decision of
outsourcing to India.

What organizational design changes would you implement?

Before we go on and propose any drastic organizational changes, it is very crucial to
understand that only 5% of the business of the Lumen Legal is going off-shore. The rest of
the business would still be based inside US. So my first argument is that there is no need to
do over the board organization design changes. But having said that, it is also important to
understand that now that we are stepping into new frontiers, we may need to make certain
changes before expecting the market to bear us fruit in business sense. Following are some of
my recommendations on the few changes that are to be made in terms of organizational
design:

 Now that the company would have to use off shore accountants to carry out the
activities so it is quite clear that company’s reliance upon technology is going to be
enhanced. For that the company needs to have able enough to have tech expertise at
their disposal. A proper tech team must look after all the tech issues.
 Organization of people around core processes. Identification of headcount to do the
necessary work.
 The company needs to follow a centralized structure where they would have an upper
hand in strategic implications and the resources working for them in India would need
to follow the SOPs set by Lumen Legal. (Philipe & Anne-Claire, 2015)
 Now that the business model of the company is going to be changed, so the company
needs to incur process changes as well. Process changes correspond to the changes in
the way certain processes were being executed. Now that the company would provide
similar services on an off-shore basis so certain protocols have to be defined on how
to manage these processes and resources have to be delegated this job of managing.
 As shown in the figure below, which we also discussed in the class, the company
must now try to fall in the top left quadrant. Because environmental turbulence
doesn’t seem to be way to high and also for the fact that now there are two teams
working to achieve the same goal i.e. higher sales. So now more than ever it is
essential for the company to make sure that the goal congruence of both of the teams
must be strong rather than weak.

6
What changes in HRM would be necessary?
The most important set of changes necessary to be made would by default be in the human
resources department. Let us categorize the changes that would be required for the smooth
running of the business in the new market.

 Training & Development –Training & Development of the Indian Talent. Specialized
resources might be needed for this who have experience in this
 The HR team must work on the job sizing of the off-shore employees. This will
enable the company to let know of the skills/expertise required to do a certain job.
This is a job centered approach rather than a person centered. Since the company
would be following standardized procedures most of the times so this approach is
better rather than a people centered approach (Robinson & Wahlstorm, 2000)
 Labor law compliances –Company must comply with all labor laws. In the past Nike
& Adidas have been fined in millions for not complying with these laws (Mathews &
Dean, 2018). So legal team has to be hired
 The consultant accountants would be on the pay roll of their companies but in order to
do business and make sure that thing go smooth. IT will be the duty of the HR team to
integrate Lumen Legal policies with that of the outsourced company. Otherwise there
could be chaos.
 Use of technological HR tools like Peoplesoft etc

How would you bring about necessary organizational changes?

Value chain is a step of activities in which value is added to the product/service at each
consistent step. Once Lumen Legal outsources some of its business, it will be quite clear that
7
their value chain will be altered altogether. Once it is done, the company would need new
capacities, new ideas and new resources to get along with this massive change. First and
foremost an audit would have to be done which will answer consumer’s perception about the
legal services being offered outside of US and that too online.

A new revenue stream would require from the company to have a change management plan
worked up. Now that the company has decided to take 5% of its business off-shore, so it is
the right time to devise a change management plan. At this very stage, the company should
need the impact assessment, targeting everyone from executives to the low level staff
managers. Then there has to be a cascade of involvement. From the case it is evident that top
executives of the Lumen legal have conceded to the very idea of outsourcing and now it is
about time to involve their subordinates as well. Also as mentioned in Question 2 about the
process changes that the process of doing business is being altered now so in order to keep it
under check, the company must delegate a full time resource, whose job would include in
making sure the business is being operated in the same way before it was it’s just the medium
that has been changed.

The company is changing the way it does business but the core operations remain same. So
there is no need to change the culture of the organization. Having said that, the employees
must be sure on two things i.e. a) where are we now? b) Where we need to get to?
(O'Brian, 2008). Lastly, when the company will be providing legal services from off-shore
facilities, it is confirm that a new element will be the part of the value chain and in order to
keep the operations up and running, the company would need to design the architecture of
this element. The company must answer the questions like a) through what media would the
company be offering the legal services b) would the resources employed to design this whole
system guarantee a feasible return? c) How many people do we need to get on board to make
this venture profitable for us? Answering these questions would give the company an
overview on the kind of changes they need to make and the way this change should be
managed.

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Bibliography
Jeremy Williams. (2007). Retrieved from Make Wealth History: makewealthhistory.org
Mathews, & Dean. (2018, October 5). Retrieved from PeopleHr: peoplehr.com
O'Brian, R. (2008, January). Retrieved from Logistics Bureau: logisticsbureau.com
Oliver Craddock. (2011). Retrieved from Mind tools: mindtools.com
Pankaj Ghemawat. (2016, May). Retrieved from Pankaj Ghemawat Web:
www.ghemawat.com
Philipe, S., & Anne-Claire, P. (2015). Making Hybrids Work: Aligning Business Models and
Organizational Design. California Management Review , 36-58.
Robinson, D. D., & Wahlstorm, O. W. (2000). Comparison of job evaluation methods: A
"policy-capturing" approach using the Position Analysis Questionnaire. Journal of Applied
Psychology , 633-637.