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Cultural Differences in Offshore Outsourcing

Cultural differences that exist between the outsourcing companies and the cultures within which they operate present a barrier to success of offshore outsourcing deals. Depending on which culture the outsourcing contract takes effect, the success will rely on how accommodating that culture is, how the two entities can reach amicable understanding when there are conflicts, the manner of their communication and how they make decisions. This essay looks at some of these cultural differences and how they affect outsourcing activities. Ultimately, it suggests ways in which these cultural issues can be mitigated.

One of the chief cultural challenges is the different communication styles in various cultures (Ang & Inkpen, 2008). An outsourcing company may be used to direct communication or communication through the hierarchical channels. In case the culture is at odds with these ways of communication, then the outsourcing company runs into problems. Secondly, the different attitudes towards conflict and conflict resolution present a real threat to cross-cultural understanding. Often, various cultures have differing beliefs on how conflicts ought to ensue and how they are eventually resolved. The outsourcing company may be from a different cultural set of conflict resolution and may therefore find it difficult to adapt to the different beliefs on conflict resolution from different cultures. The final cultural problem is the decision-making models. Various cultures vary in the manner of their decision-making (Nicholson & Sahay, 2001).. In some cultures, extensive consultations are needed before decisions are reached. When the outsourcing company believes in unilateral decision-making, this compounds the problem at hand.

The manner of conflict resolution provides a real threat to cross-cultural understanding for offshore outsourcing entities (Kvedaraviciene & Boguslauskas, 2010). In a culture where there is a belief in people paying for their mistakes or errors, there would be difficulties in making them understand why an outsourcing company would not pay up for breaching a contract, causing intentional injury or compensating for losses they caused. When such companies provide outdated equipment, they would be expected to make it up rather than offer verbal apologies. This may cause misunderstandings between them. The decision-making strategy for an IT/IS service outsourcing outfit may be dependent on what the top management decide (Krishna et al. 2004). However, while in a culture where the opinions of junior employees and all within the organization have to be included, then the model of making decisions may be problematic. While making a decision on which cloud service to use for example, the management may only look at the potential advantages this may have for the company while the employees see how the deal would be harmful to them and their environment. Reaching an amicable solution would be difficult.

To mitigate on the challenge of conflict resolution, the outsourcing company has to research on the particular culture within which they are to operate long before they start operations there. They have to agree on how best potential conflicts of agreements, contracts and the general public would be resolved without upsetting the cultural balance. On the decision-making, the outsourcing company has to come up with agreeable decision-making model that is inclusive of the cultural belief patterns of the area where they operate (Nicholson & Sahay, 2001). These culturally sensitive ways of decision-making then would be integrated so that disagreements are minimized.

In conclusion, to operate offshore as an outsourcing entity for IT/IS services needs the admission that cultural sensitivities would affect the nature of business. The manner in which people communicate differently, solve conflicts and make decisions ought to influence the strategies that an offshore outsourcing company ultimately uses within their businesses.