Case Study

Recommendation
It is reasonable to recommend Australia and New Zealand Banking Group (ANZ) focus on three issues which are created by the behavior of offshoring and outsourcing. Firstly, offshoring may cause inefficient management by its communication problems. Secondly, because of the pressure put on domestic labor market, offshoring will also cause the ethics inferiority. Finally, to some extent, the domestic business performance might be negatively affected because of the resource which has been transferred to overseas.

Rationale
There are three possible issues which could be caused by offshoring and outsourcing.

The communication problems and coordination between Australia and overseas
The global website of ANZ provided 55 job opportunities which include a wide range from the head of human recourse to business analysts in Manila and 10 job opportunities in Indonesia (Wade and Hawthorne 2012). These countries which were selected are all have a very different culture background compared with Australia. The problem of communication and differences is the most likely reason why offshoring may fail or run into problems (McCue 2006). Because of the difference in time zone, it is hard to achieve communication in real time, and chance of misunderstanding emails and slow response from oversea can not be ignored neither, because these effects can all cause the slow-down of the project and reducing the productivity of the team members (Malarvannan 2012). But the most simple and effective management is not the only standard to judge whether a bank success or not. Actually the higher interest rate of depositing and lower interest rate of loan are the key concepts of banks. After the offshring, the cost will go down, which will cause the increase of profit. This will allow ANZ to provide more attractive interest rate, eventually achieve Sustainable Competitive Advantage.

The ethic issue caused by sending domestic jobs to overseas
The ANZ claimed that they will cut 1000 domestic jobs which equivalent to 4% of its local work force, and this cut will be made by the end of the year 2012(Kelly 2012). The modeling which is created by several unions also shows that at least 25000 jobs in the financial sector could be offshored (Wade and Hawthorne 2012). The Australian Bureau of Statistics website (2012) informs that by the time March 2012, the unemployment rate of Australia domestic is 5.2%. Critics strongly against that ANZ’s great level of offshring, because it will causes unconscionable growth in unemployment rate (Sydney Morning Herald 2009). For the short run, it does will cause some domestic employees temporarily lose their job. But if we use Teleological Theories to analyze this decision, that is, define a decision by its consequence (Shield 2012). We can find out what happened after ANZ making this decision, ANZ signed collaboration with Finance Sector Union (FSU) to spend AUD$10 million to build a New Career Training Fund to help employees find new jobs and career success outside ANZ. It will effectively alleviate the social concern of offshoring and improve public relationships (ANZ 2012).

The negative effects to domestic performance
The reasons of offshoring are multiple, and the most obvious one is the saving of costs. ANZ actually can save more than AUD$50000 per employee compared with they hire that employee in Australia (Wade and Hawthorne 2012). If ANZ did what they claimed to do, which is cutting 1000 domestic jobs, eventually ANZ can save more than 5 million dollars by the part of wage cost. But every coin has its two sides. The decreasing number of domestic employees has already causes the dissatisfaction of customer. ANZ has been rated the worst satisfaction for lacking of staff and long queues (Casidy 2010). A research made by Roy Morgan in 2009 indicates that ANZ is the worst brand out of the banks in New Zealand (Casidy 2010). These material shows that the offshoring of ANZ have