courage can't see around corners but goes around them anyway. ~Mignon McLaughlin

The impact of offshoring on intercultural competence

When I lived in Bangalore, I had a hard time connecting with most of the other women expats in town. They were gilded wives of executives sent to Bangalore to outsource rote work for large corporations. They agreed this was the inevitable future of business and there was little room for my dissenting point of view.

I wasn’t a gilded housewife. I was the there to grow a research and strategy team for a global marketing firm and I advised social enterprise start-ups in my spare time. The whole experience there left me sceptical that outsourcing labour of any kind just to save on costs would build the kind of future I wanted to be a part of.

Short term cost efficiencies; long term complexity

The short-term cost efficiencies of outsourcing may make sense to economists, but that doesn’t mean they will be great for business long-term or the communities in which they operate.

If you’re building web-based products and services, it might seem like a good idea to offshore the back-end coding to a cheaper team in Chennai. But those who have done it admit time and again that it isn’t as efficient as it seems:

Communication breakdowns, misunderstandings, different approaches to getting things done (most of which are deeply rooted in culture) all add up to protracted time lines, wasted time and effort, and sometimes even an inferior output. When this happens at scale, which is often the vision of large scale outsourcing operations, you’ve got a frustrating tangled mess.

Forbes magazine highlighted the unintended consequences of global outsourcing which

“makes entry of new competitors to the industry easier, intensifying competition, shortening product cycles, and squeezing return on invested capital…”

This applies to any product manufacturer, from apps to artisan craft. The author continues,“and it undermines a company’s relations with its labor, customers, and the domestic and local communities.”

So, companies won’t sustain a competitive advantage or make a valuable contribution to society by offshoring. 

Implications on intercultural competence in an interconnected world

 And then there are the longer-term implications on communities and intercultural understanding. Don’t forget that those cheap employees stuck in an outsourced hub know fully well that they are there because they are cheaper than talent elsewhere in the world. And that doesn’t do a world of good for intercultural relationships.

It only reinforces shallow cultural stereotypes and power dynamics.

What condition does that create for this and future generations in our ever interconnected world?

If your bank’s call centre is located in India, what picture does your call centre employee get when he looks at your banking activity? He can get a very distorted perspective of life where you live, especially without a broader cultural context. Couldn’t this foster a perspective of himself and others that is rather distorted?

From my personal experience working with global teams around the world, I believe that outsourcing simplified work reinforces entrenched power dynamics and flies in the face of true collaboration.

Toward the future: new connected systems

So now I have to ask myself, what can I add to this topic to build something constructive?

I don’t believe we need to spend our energy taking down the existing global giants. Rather, the future I want to be a part of is a collaborative one — building bridges to cultures and disciplines out of mutual respect and curiosity.

For businesses, I think it starts to look like post-industrial cottage industries, networked via the Internet to collaborate with other talents, as and when needed, and market and distribute their products online. Sprout enterprise network is one example of such a network.

A new approach to systems thinking is what we are looking at here.

How can we adjust systems to be inclusive rather than exclusive?

What kind of a world would this build for future generations?

I’d like to find out.




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