Abid Mustafa is a seasoned professional with 18 years’ experience in the IT and Telecommunications industry, specializing in enhancing corporate performance and in this article, he looks at the reasons why business leaders choose to outsource.

All too often justifications advocated by company executives to outsource business functions are peppered with terms like cost reduction, improved time to market, increased operational efficiency, risk transfer – all of which make great business sense – and are buttressed with cost benefit analysis, elaborate business cases and industry case studies that highlight the benefits of outsourcing. But in too many cases such business rationale conceals the true motives of executives to outsource. This article explores executive motives for espousing outsourcing initiatives that are not business driven and how HR executives can help to mitigate such practices.
The urge to outsource commences when executives are put on the spot by CEOs to give an account of their failure to fulfill responsibilities or meet performance targets. In some cases the impulse to outsource is not guided by business interests, company profits, shareholder value or governed by contractual obligation, but is rooted in something much more fundamental, i.e. the way in which many of us think and behave. However, most CEOs and their executive management teams do not pause to ponder this point, and as long as the outsourcing proposal is perceived to provide business value, the company agrees to press ahead. Unknown to the executive management team, the executive responsible for the outsourcing proposal is driven by nothing else than the sheer desire to evade responsibility – i.e. to save one’s skin.

Executives are not the only people who are motivated to outsource or avoid responsibility. Corporations shun responsibility for poor service offerings and pitiable customer experience through holding the customer responsible for not understanding the terms of the contract. Corporate departments abdicate responsibility by transferring elements of their functions to ill-equipped internal teams or external suppliers who are not qualified to undertake the job. Consultants eschew responsibility by deflecting criticism from the failure of their proposals onto other parties involved in the proposal. Managers shift proportions of their responsibilities to subordinates to execute duties that do not fall within the ambit of their job descriptions. Work colleagues evade responsibility by assigning tasks to other colleagues who neither have the skills nor were hired to perform such tasks. Vendors dodge responsibility by outsourcing it to cheap subcontractors hoping that their clients will not find out. The culture of outsourcing responsibility just to circumvent accountability has a huge negative impact on businesses. It erodes competitiveness, increases time to market, yields poor quality products and leaves a bitter experience for customers.

Corporations are not the only victims of responsibility evasion. Society too is affected by people looking for ways to outsource everyday responsibilities. For instance, fathers outsource the upbringing of their children to single mums and disappear. Parents employ a combination of nannies, teachers and private tutors to outsource the development of their children. Care homes are used by children to outsource the looking-after of their old-age parents. Nowadays, private companies are the preferred means by which governments outsource their electoral responsibility to provide law and order, healthcare, education, and other essential services. Those citizens who cannot afford these services often wonder why they elected the government in the first place.

Hence outsourcing of responsibility – be it corporate, societal, or governmental – is the norm in the environment where we live and work, and it affects our behaviour – sometimes without even us knowing about it. This produces an archetypal mentality where responsibility revolves around individual interests and clashes with the interests of the company or the public interest often leading to disputes .So what is the root cause behind such irresponsible behaviour?

Avoidance of responsibility (or in the aforementioned context the outsourcing of responsibility) is shaped by a single precept: individualism, which permeates all segments of corporate and societal life. Individualism is defined by some as the desire to emphasise their personal goals, interests and values over the society (Triandis, 1989); individualistic emphasis on personal autonomy and self-fulfillment (Hofstede, 1980); need for detachment from others and individual autonomy (Andersen, Reznik, and Chen1997). In my opinion, individualism encourages people to put their interests first and foremost. This imbues in people a selfish attitude and spurs them to satisfy their own needs before the needs of others. Furthermore, individualism leads people to view responsibility as a burden and a hindrance towards the fulfillment of their selfish motives, especially where the individual is held to account. Therefore there exists a perpetual clash between individual interests and the public interests. This is further compounded by the elevation of individualism as one of the sublime values in society coupled with government legislation which works to favour individuals – rich and powerful personalities – and safeguards their rights.
Companies are no different to societies and governments, and actively promote individualism. Nonetheless, they also recognise the dangers posed by individualism at the workplace especially towards team ethics and inter-departmental relationships. Thus HR officers have developed a plethora of initiatives to limit the perilous effects of individualism at the workplace. For instance corporate culture is geared towards fostering stronger employee cooperation, composite performance targets are designed to encourage departmental collaboration, processes and governance frameworks are engineered to buttress teamwork, and the orientation of company training programmes is aimed at aligning personal interests with corporate interests. However, no matter how rigid or mature the corporate indoctrination is, its ability to discipline individualism is greatly dependent upon the education and cultivation of the workforce by society, both of which are rooted in individualism – a losing battle in many ways. Obviously, the strength of corporate culture to compensate for the ill effects of individualism will differ from society to society, but this is the real challenge for HR executives.

So the next time the executive management team considers the approval of outsourcing initiatives, HR executives should take the lead in considering three important questions before looking at the business justifications. Is the motive behind the proposal to avoid executive responsibility? Can the various departments and key employees collaborate effectively at all levels to deliver the outsourcing initiative? Is the corporate culture strong enough to curb individualism and sustain an effective partnership between the company and the vendor taking on the business responsibility? Helping to answer these questions can help HR executives assert a stronger role in areas, which traditionally have had minimal HR participation.