1. MBA 669 Special Topics: IT-enabled organizational Forms Dave Salisbury salisbury@udayton.edusalisbury@udayton.edu (email) http://www.davesalisbury.com/http://www.davesalisbury.com/ (web site)

2. Things to address this evening Management of remote workers How it’s different How it might be the same (when one looks deeply) Telework Who does/doesn’t do it? Why/why not do it? What are the real impacts? Outsourcing/offshoring Why/why not do it? Does it really take net jobs away from the US? Is it only for reducing costs

3. Underlying questions for discussion What happens when someone is changed by their company from an employee to a cost? How can a virtual organization depending on trust work in this scenario? Can culture and/or legal environment be a source of workable trust for virtual organizations?

4. Telecommuting – Worker Benefits Employees can work at home At the customer’s premise In special work places While traveling Using a computer linked to their place of employment

5. Benefits attributed to telecommuting Lower travel time (workers) Less highway congestion (society) Hang on to valued employees (company) Lower office space costs (company) Flexibility of workforce (company) Job enrichment (workers)

6. Some disadvantages for workers Feelings of isolation Loss of fringe benefits No workplace visibility Lack of socialization Invasion of home life Removal of employee status

7. Disadvantages to employers Difficulties in supervising work Potential data security problems Training costs High cost of equipping and maintaining telecommuters’ homes

8. Disadvantages for non-teleworkers Get stuck with stuff that the teleworker normally does Forced to deal with inconsistency of scheduling Absorb a lot of the variance (“fire- fighting”) Actually, all of this can happen any time somebody is out of the office

9. How to understand telecommuting? Individuals versus organizations Power relationships and who gets to telecommute How many people actually telecommute full time? Trust and who gets to telecommute Firm size and who supports telecommuting The myth (or are they?) of productivity and satisfaction

10. How do you manage people you can’t see regularly? Trust and the virtual organization The late 90’s and early 00’s are an example of irrational trust The limits of information Place versus purpose (the olive tree and the Lexus?) The rules of trust

11. Outsourcing/offshoring Outsourcing is the transfer of work previously done internally from a focal company, either to another company or across international borders to take advantage of a larger, cheaper (usually) and/or more specialized labor pool. Offshoring is basically out of country outsourcing.

12. Outsourcing/offshoring Originally a way to control costs Heavily driven by arbitrage thinking Less popularly known as a way to dump problems you don’t understand Should be driven by competitive considerations Don’t outsource the farm Kind of hard sometimes to figure out precisely what the farm is…

13. More outsourcing/offshoring Full outsourcing Unload everything not seen as a source of competitive advantage Allows taking advantage of economies of scale Selective outsourcing “Best of breed” Flexibility

14. Offshoring Same basic logic as outsourcing, just outside one’s home country Issues (above and beyond outsourcing) Language (especially for call centers) Culture Legal environment intellectual property data security Coordination costs Time zones Backlash from domestic workers

15. Kinds of jobs outsourced See aspects of telework jobs described in Bailey/Kurland and Apgar High information intensity Low setup and coordination cost Wage differential (see arbitrage effect as described in Freidman)

16. Outsourcing and isomorphism and globalization Infrastructure Standards Legal systems

17. Why? Saving money – since not many “get” the importance of IT/IS, it’s seen only in terms of cost Staffing IT/IS is hard – they have options and they’re hard to please Focus off operations and on your information Expertise and a better talent pool Potential source of growth (top-line versus bottom- line) More capacity on demand (unless your ASP turns out to be under-prepared)

18. Why not? Control – especially if what you thought was not strategic yesterday becomes so Contracts and getting out of them is hard What happens when IT changes? Guarantee of no competitive advantage from IT Coordination cost Employees may be put on stuff that isn’t yours (when you outsource them to a vendor) Assumption of vendor having additional expertise may be untrue Expertise belongs to vendor Assumption of lower cost may be incorrect

19. Underlying questions for discussion revisited What happens when someone is changed by their company from an employee to a cost? How can a virtual organization depending on trust work in this scenario? Can culture and/or legal environment be a source of workable trust for virtual organizations?