LO: To Learn an example of a TNC in the TERTIARY SECTOR to show how it operates in different parts of the world. HSBC – Outsourcing winners and losers The reasons companies outsource can vary, but may include: To reduce costs To improve quality of service To access and benefit from outside expertise To avoid training costs To focus on core business To improve choice To reduce risk (less investment, less direct employees) Avoid pay health insurance, pension contributions, etc. for workers Starter question: Why do companies out source their call centres abroad? Write down 3 reasons.

Diverted to Delhi video Make notes on what the Indian workers have to do to be able to work in a Call Centre. Call centre worker in Mumbai Video LO: To Learn an example of a TNC in the TERTIARY SECTOR to show how it operates in different parts of the world. Why switch to India?

Improving internet speed, capacity and reliability Improve language skills of workers especially in English Improve IT skills and understanding Train workers in culture and customs of potential customers home countries Ensure reliable telephone connections Offer 24 hour service - important the contracting company is in a different time zone or even hemisphere. Offer a high quality service cheaper than potential customers can provide themselves LO: To Learn an example of a TNC in the TERTIARY SECTOR to show how it operates in different parts of the world. In order for cities, regions or countries to become attractive locations for TNCs to outsource, they will have to fulfil numerous requirements including:

Specialist companies now growing in India English language skills are good in India Why Choose India and Bangalore ? LO: To Learn an example of a TNC in the TERTIARY SECTOR to show how it operates in different parts of the world. TASK: Use the work sheet to label your map with the reasons why call centres move to India

Outsourcing- winners and losers HSBC, Europe's biggest bank, pre-tax profits of $19bn (£11.8bn) for 2010, more than double the $7.1bn figure for Want to increase profit in a difficult economic climate by cutting staff costs. Part of this will be to close some local HSBC branches and promote the use of ‘Online Banking’. They will relocate three of their UK based call centre’s to New Delhi to cut wage and rent costs. David Somma, 34, has been working for the HSBC credit card call centre in London, UK for the last four years. He has worked his way from a team member to team leader and is paid $22,500 per year for his work. David has a partner who is pregnant and a three year old son as well as a mortgage on their two bedroom apartment in London. David has recently been given three months’ notice that his job will end in December and his job will be transferred to New Dehli, India. With the current global recession, David is worried about finding a new job. Ankur Chadha, 34 is a graduate student from the University of Delhi in electronic engineering and system design. He is currently working in a call centre in New Delhi for Amazon.com helping with website enquiries and has done for the last five years. He is married to Jer and has two children or 3 and 5 years old. Ankur earns $2,100 a year with Amazon but with his experience will earn $2,500 with HSBC. Ankur is looking forward to the new challenge of helping UK based customers with their credit card enquiries.

What are the pros and cons in this situation as seen by the various participants? HSBCDavid SommaAnkur Chadha Pros Cons

Complete the speech bubbles, showing how each player (involved party) will feel about the GLOBAL SHIFT of call centres from DEVELOPED to DEVELOPING countries.

The benefits of outsourcing to less developed countries are …………… The costs of outsourcing to less developed countries are …………… The benefits of outsourcing to more developed countries are …………… The costs of outsourcing to more developed countries are …………… Use the information on page 259 of the old green GCSE textbook to complete the following sentences….

Using examples explain how outsourcing produces winners and losers. ( 6 marks )

A new kind of OUTSOURCING 1.What services are now being OUTSOURCED to cities like Bangalore? 2.Why is this happening? 3.How do you think this will benefit Bangalore and its educated residents? 4.Who do you think suffers with these developments? Bangalore is the centre of the world's IT outsourcing industry, where companies like Infosys help run the back end of many of the world's corporate computer systems. But as other countries catch on to the possibilities of outsourcing, India's entrepreneurs are finding new ways to use India's talent and experience in the field. The FT's James Crabtree looks at how the outsourcing industry is moving beyond software and bringing a wide variety of skilled jobs to India