Kang, Won. 4 0
Personnel outsourcing for productivity improvement of Korean companies / 6 6 Won Kang. - - - iii, 126 pages 28 cm. - - - - - . - . - 0 . - . - 0 .
Thesis (Ph. D.)-- Pamantasan ng Lungsod ng Maynila, 2005.;A dissertation presented to the faculty of Graduate School of Management in partial fulfillment of the requirements for the degree Doctor of Public Management.
5
ABSTRACT: 1. There is no boundary between countries as an economic term in this 21st century. As globalization becomes the natural thing now, the world reorganizes into one market. Globalization has one meaning : that the economic main body around the world should run into the system of unlimited competition, whether it is their own will or not. With the power of globalization, it is the main subject to secure the flexibility of labor in the labor market each country. As the workplace for lifetime has turned into the job for lifetime, the great revolution in labor market is approaching. To make labor market flexible to distribute manpower promptly and effectively. It is time for us to change the industrial structure to meet the need of the industrial world, and to help in the revival of the Korean economy, to enable it to regulate its structure substantially. This study , therefore, is on the basic principle of outsourcing and its operational plan. We are aim to use outsourcing to improve the labor market and to revive the economy in our country, where there is mass unemployment. The study objectives are as follows. First, to decide the possibility of grafting by analyzing the theoretical background of outsourcing to improve the Korean labor market. Second, to analyze the present state of the Korean labor - market the structure of manpower, the level of production, the foreign solution to unemployment and so on, and to investigate the feasibility of introducing outsourcing strategy. Third, to promote the efficiency of the operating strategy by representing the problem and matters to be attached to the outsourcing strategy. This dissertation provides a descriptive analysis of documents to achieve the above objectives. Specifically, it analyzes the books about the concept of outsourcing and different kinds of materials on management strategy, introduces theoretical background, presents actual materials on labor market that were collected, and analyzes the given condition for the introduction of outsourcing strategy. Based on it, we have represented the subject and classified it by stages and other related matters, that are needed to execute the outsourcing strategy. The study covers the years 1990 to the first half of 2003 because we have mainly researched issues that were changed after the economic mandate of IMF. The data and analyses pertain mainly to Korea but a comparison with the case analyses to counter unemployment in the US, Japan, Germany and France were also made. With regard to content, this study focuses on the basic theory of outsourcing strategy, Korean labor structure and environmental analysis. 2. The principle of outsourcing reflects a trend during the 1990s in U.S. companies as they commissioned the production non-critical parts of their goods to external companies, which were more professional and effective in producing the non-critical parts of the product. This is called Superdiet management. Therefore, businesses conducted within the company, otherwise known as look-out management, came to an end. Traditionally, the meaning of sourcing can be explained as the externalization of service, and one distinguishing feature is the involvement of less-skilled labor. It is considered one of the management strategies. Outsourcing restructures the new company by maintaining its core competencies while allowing subcontracting of labor. In the declaration of the International Labor Organization (ILO), it is clearly stated that Labor is not a good. The point of view, however, had to change in time. In reality labor is sufficient to become a commodity and it has already crossed borders. That is, labor is now being traded as goods rather than requisites for production, which is what it was considered in the past. However, this only implies the commercialization of labor, not people. As in the past, the dignity of human beings should remain divine. 3. The labor environment of Korea has immensely changed. Rapid industrialization has influenced the increased mobilization of the labor force. Society has also changed rapidly. Outsourcing is a management strategy of a particular company. It is the processes of sourcing-out a variety of business activities including design, production, circulation, packaging, and so on while retaining the core parts. The company sources-out the duties that were previously carried-out within the company to lower the amount of value added. This allows the company to manage the business more flexibly by sourcing-out the jobs requiring skills that the company does not have. This outsourcing strategy is one of alternative plans for the Korean economy after experiencing the economic crisis. To systematically drive outsourcing forward, the company has to consider the following matters. First, it is necessary to standardize the situation that is available inside the company. In view of standardization, it is necessary to re-estimate certain duties, and build the objective standard to judge whether the company directly controls these duties or not. Second it is necessary to outgrow the former thought that companies have to manage all the resources. The mentality that the company is special opposes sourcing-out of duties, and causes the company to have inflexible employees who are popularly used in company but not outside. Third, because outsourcing can be perceived as the management of reduction, the reduction of the workplace, understanding among members is needed in advance. It should be known to the members that outsourcing is not intended for the reduction of management but for the heightening of the competitiveness of the company, through the use of network and concentration of management, resources. It should be explained the outsourcing maintains the system of long-term employment for the core capability parts but it is also desirable to engage external personnel or introduce the dual system of personnel by introducing outsourcing to other capability parts . Fourth, it is necessary to build a network with related companies in charge of outsourcing. It is a key point to dig-out and build up the networks with small and medium sized companies that have the competitive advantage in the function of management or a specific business field. Along with it, as the chance of Korean companies in advancing abroad increases a stratagem that is not limited to domestic companies but instead utilizes international companies is needed. 4. We must understand the nature of knowledge economy and meet it more effectively in the long-term view. It is necessary that the incoming system of economy represented for globalization and information strengthen the areas of concern in knowledge goods. By taking care of the parts that can strengthen the foundation of knowledge like education, science and technology, employment, and job training, we could build a reasonable economy in Korea. The Korean labor routine can be improved in various aspects. The economic structure is related to the political world and experiences irregularity and corruption on a deeper level. This causes high expense and how productivity and so laborers are asked to work without sufficient compensation. However, the democratization of politics has greatly progressed, with an increased in the transparency of economic activity as an additional effect, and the distribution of profit to laborer is now being made by reasonably distributing profit from business activity. I am advocating the personnel outsourcing strategy to many Korean companies for managing human resource efficiency. Some companies that have moved or will move into the Geasung industrial district of North Korea, in particular, might need to consider utilizing the North Koreans human resource. For this, the government should establish an international standard law and system to serve as a basis for the mobilization of the Korean labor market. Because of its importance, the government should also prepare the conditions wherein companies can do outsourcing freely, both as well as international. Next, companies should not only focus on using their internal labor force to accomplish their work . By using an external professional labor force, companies can develop a more competitive product as well as increase their growth. Ford, the American car manufacturing company, is a good example of this in that they have obtained their competitiveness by outsourcing the production of car components . Of course, an efficient response between the management and the employees is needed . Lastly, employees should specialize in their fields in order to overcome the activation of outsourcing. By having the best ability in their field, they can be treated well in their companies as well as in the labor market. For Korea to maintain not only the high growth like the past but a sustained economic growth, the labor market of Korea should be mobile as well as flexible. When the development of new motive power and the management of personnel and intellectual resources become efficient, the Korean economy will continuously grow as ad advanced economy.
5
2 = =
2
2 --0------
6 --0-- 2 --------
0 2 --
--20------
--------20--
--------20--
----2
/ 2
/ 2
/
/
Personnel outsourcing for productivity improvement of Korean companies / 6 6 Won Kang. - - - iii, 126 pages 28 cm. - - - - - . - . - 0 . - . - 0 .
Thesis (Ph. D.)-- Pamantasan ng Lungsod ng Maynila, 2005.;A dissertation presented to the faculty of Graduate School of Management in partial fulfillment of the requirements for the degree Doctor of Public Management.
5
ABSTRACT: 1. There is no boundary between countries as an economic term in this 21st century. As globalization becomes the natural thing now, the world reorganizes into one market. Globalization has one meaning : that the economic main body around the world should run into the system of unlimited competition, whether it is their own will or not. With the power of globalization, it is the main subject to secure the flexibility of labor in the labor market each country. As the workplace for lifetime has turned into the job for lifetime, the great revolution in labor market is approaching. To make labor market flexible to distribute manpower promptly and effectively. It is time for us to change the industrial structure to meet the need of the industrial world, and to help in the revival of the Korean economy, to enable it to regulate its structure substantially. This study , therefore, is on the basic principle of outsourcing and its operational plan. We are aim to use outsourcing to improve the labor market and to revive the economy in our country, where there is mass unemployment. The study objectives are as follows. First, to decide the possibility of grafting by analyzing the theoretical background of outsourcing to improve the Korean labor market. Second, to analyze the present state of the Korean labor - market the structure of manpower, the level of production, the foreign solution to unemployment and so on, and to investigate the feasibility of introducing outsourcing strategy. Third, to promote the efficiency of the operating strategy by representing the problem and matters to be attached to the outsourcing strategy. This dissertation provides a descriptive analysis of documents to achieve the above objectives. Specifically, it analyzes the books about the concept of outsourcing and different kinds of materials on management strategy, introduces theoretical background, presents actual materials on labor market that were collected, and analyzes the given condition for the introduction of outsourcing strategy. Based on it, we have represented the subject and classified it by stages and other related matters, that are needed to execute the outsourcing strategy. The study covers the years 1990 to the first half of 2003 because we have mainly researched issues that were changed after the economic mandate of IMF. The data and analyses pertain mainly to Korea but a comparison with the case analyses to counter unemployment in the US, Japan, Germany and France were also made. With regard to content, this study focuses on the basic theory of outsourcing strategy, Korean labor structure and environmental analysis. 2. The principle of outsourcing reflects a trend during the 1990s in U.S. companies as they commissioned the production non-critical parts of their goods to external companies, which were more professional and effective in producing the non-critical parts of the product. This is called Superdiet management. Therefore, businesses conducted within the company, otherwise known as look-out management, came to an end. Traditionally, the meaning of sourcing can be explained as the externalization of service, and one distinguishing feature is the involvement of less-skilled labor. It is considered one of the management strategies. Outsourcing restructures the new company by maintaining its core competencies while allowing subcontracting of labor. In the declaration of the International Labor Organization (ILO), it is clearly stated that Labor is not a good. The point of view, however, had to change in time. In reality labor is sufficient to become a commodity and it has already crossed borders. That is, labor is now being traded as goods rather than requisites for production, which is what it was considered in the past. However, this only implies the commercialization of labor, not people. As in the past, the dignity of human beings should remain divine. 3. The labor environment of Korea has immensely changed. Rapid industrialization has influenced the increased mobilization of the labor force. Society has also changed rapidly. Outsourcing is a management strategy of a particular company. It is the processes of sourcing-out a variety of business activities including design, production, circulation, packaging, and so on while retaining the core parts. The company sources-out the duties that were previously carried-out within the company to lower the amount of value added. This allows the company to manage the business more flexibly by sourcing-out the jobs requiring skills that the company does not have. This outsourcing strategy is one of alternative plans for the Korean economy after experiencing the economic crisis. To systematically drive outsourcing forward, the company has to consider the following matters. First, it is necessary to standardize the situation that is available inside the company. In view of standardization, it is necessary to re-estimate certain duties, and build the objective standard to judge whether the company directly controls these duties or not. Second it is necessary to outgrow the former thought that companies have to manage all the resources. The mentality that the company is special opposes sourcing-out of duties, and causes the company to have inflexible employees who are popularly used in company but not outside. Third, because outsourcing can be perceived as the management of reduction, the reduction of the workplace, understanding among members is needed in advance. It should be known to the members that outsourcing is not intended for the reduction of management but for the heightening of the competitiveness of the company, through the use of network and concentration of management, resources. It should be explained the outsourcing maintains the system of long-term employment for the core capability parts but it is also desirable to engage external personnel or introduce the dual system of personnel by introducing outsourcing to other capability parts . Fourth, it is necessary to build a network with related companies in charge of outsourcing. It is a key point to dig-out and build up the networks with small and medium sized companies that have the competitive advantage in the function of management or a specific business field. Along with it, as the chance of Korean companies in advancing abroad increases a stratagem that is not limited to domestic companies but instead utilizes international companies is needed. 4. We must understand the nature of knowledge economy and meet it more effectively in the long-term view. It is necessary that the incoming system of economy represented for globalization and information strengthen the areas of concern in knowledge goods. By taking care of the parts that can strengthen the foundation of knowledge like education, science and technology, employment, and job training, we could build a reasonable economy in Korea. The Korean labor routine can be improved in various aspects. The economic structure is related to the political world and experiences irregularity and corruption on a deeper level. This causes high expense and how productivity and so laborers are asked to work without sufficient compensation. However, the democratization of politics has greatly progressed, with an increased in the transparency of economic activity as an additional effect, and the distribution of profit to laborer is now being made by reasonably distributing profit from business activity. I am advocating the personnel outsourcing strategy to many Korean companies for managing human resource efficiency. Some companies that have moved or will move into the Geasung industrial district of North Korea, in particular, might need to consider utilizing the North Koreans human resource. For this, the government should establish an international standard law and system to serve as a basis for the mobilization of the Korean labor market. Because of its importance, the government should also prepare the conditions wherein companies can do outsourcing freely, both as well as international. Next, companies should not only focus on using their internal labor force to accomplish their work . By using an external professional labor force, companies can develop a more competitive product as well as increase their growth. Ford, the American car manufacturing company, is a good example of this in that they have obtained their competitiveness by outsourcing the production of car components . Of course, an efficient response between the management and the employees is needed . Lastly, employees should specialize in their fields in order to overcome the activation of outsourcing. By having the best ability in their field, they can be treated well in their companies as well as in the labor market. For Korea to maintain not only the high growth like the past but a sustained economic growth, the labor market of Korea should be mobile as well as flexible. When the development of new motive power and the management of personnel and intellectual resources become efficient, the Korean economy will continuously grow as ad advanced economy.
5
2 = =
2
2 --0------
6 --0-- 2 --------
0 2 --
--20------
--------20--
--------20--
----2
/ 2
/ 2
/
/