Slumdog Millionaires: Can Impact Sourcing Alleviate Poverty?

By Chacko Kannothra and Stephan Manning.

Call centers, tech support, payroll processing – more and more service jobs are performed abroad. Global outsourcing is one of the most controversial trends of our time. To some, it is mainly a cost-cutting exercise which has led to job losses in Western economies and has started a ‘global race to the bottom’. The recent shift of clients and providers to second and third-tier outsourcing locations to keep labor costs low is an indicator of that. To others, outsourcing has also generated new income and entrepreneurial opportunities especially in developing countries. Clearly, in particular for the young and educated in urban areas, such as Bangalore in India, the outsourcing sector has been a career stepping stone. But how about the vast majority who still live in poverty? Will the global service industry widen the gap between the new urban elite and the rest? Maybe not if we believe in the new trend of ‘impact sourcing’ – the creation of outsourcing jobs and training opportunities for the poor and disadvantaged, in particular from slums and rural areas. Impact sourcing was celebrated a few weeks ago at the 17th World Outsourcing Summit as a promising way of combining business and social benefit. The Rockefeller Foundation even calls it a means towards reducing poverty. But are these claims realistic?

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Transforming Academia: From Silo to Vehicle for Social Change

By Stephan Manning.

There has been a lot of talk about the alienating nature of academic work. Nick Kristof argues in his recent New York Times article that academic research is increasingly irrelevant for public debates and that public intellectuals have become a dying species. Academics are increasingly driven by the pressure to publish rather than by curiosity and the need to better understand the world we live in, as Suhaib Riaz points out in his recent blog. In a nutshell, academia has become a silo in which peer recognition counts the most, whereas making a broader impact is seen as a distraction. Given the enormity of unsolved social and environmental problems facing our planet, we need to re-embed academia into society and turn it into a vehicle for social change. But how?

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HBS’s apology misses the mark

or why 250 female-headed cases won’t change the world

By Michelle Kweder, a UMass Boston student on the Organizations and Social Change track of the PhD in Business Administration.  This is reposted from her blog Bricolage. Twitter: @MichelleKweder

Harvard Business School (HBS) Dean Nitin Nohria apparently made an “extraordinary public apology” at a glitzy ballroom in San Francisco for HBS’s bad behavior towards women as outlined September 2013 New York Times article “Harvard Business School Case Study:  Gender Equity.”  Nohria’s goal of doubling the percentage of women who appear as protagonists in Harvard Business Publishing (HBP) cases in the next five years is lackluster if not meaningless.

Apparently HBP cases account for 80% of cases studied in business schools globally. The last time I checked the online case database included 10,148 (December 2013) HBS/HBP cases.  (Note: HBP also disseminates cases from similar collections such as Darden and Ivey.)  Without a doubt, HBP/HBS is the thought leader and standard bearer in what I call mainstream graduate management education (MGME).

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Of Davos, Luxury Boats and Downward Spirals

By Suhaib Riaz.

At the recently concluded gathering of world elites, also known as the World Economic Forum at Davos, one issue seemed to come up more than it has in the recent past: societal inequality. Oxfam released a well-timed report on economic inequality and directly asked for world elites at Davos to turn their attention to it.

The report highlighted how the 85 richest people in the world (who could hypothetically fit Oxfam reportinto a double-decker bus) now own wealth equal to the lower 3.5 billion people (half the world’s population). Interestingly, the Oxfam site’s link to the report had the picture of a boat, or more precisely, that of a luxury yacht – presumably the kind that those elites may own or have access to. The water all around it seems stable and beautiful as ever. It is hard to resist a metaphor here, which I will expand on through this article.

On the face of it, the call by Oxfam can be puzzling. The fact that societal elites are being asked to give attention to inequality raises a fundamental question: Why should they care?

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Addressing Inequality with a New Business Architecture

by David Levy

Last week, Bill de Blasio was sworn in as the Mayor of New York, and in a ceremony replete with references to sharp class and racial divides in the city, de Blasio pledged to devote his energies to “put an end to economic and social inequalities.” So what can a new administration with a solid mandate for progressive policies do to encourage shared prosperity in a major urban region? Even large cities have limited power and resources, and they are tightly integrated into the wider national and global economy. Inequality is largely a function of more structural economic forces, from the dominance of the financial sector to the pressures created by immigration, globalization, and technological change.

De Blasio’s plans for addressing inequality remain rather unclear. His most substantive proposals include building more affordable housing and raising taxes on the wealthiest New Yorkers to pay for universal kindergarten. His wide margin of victory indicates some appetite for redistribution, but higher taxes are often perceived as “anti-business”, deterring mobile investment and hurting employment. Indeed, De Blasio is proposing to raise taxes by less than $1000 on those earning between $500,000 and $1 million a year. De Blasio has also supported raising the minimum wage, but the city is powerless to act on this without support from the state legislature.  Other proposed measures, such as helping people enroll for food stamps and other benefits to which they are entitled, are important steps but their limited scope means they won’t have much of a systemic impact. Continue reading

The Offshoring Paradox: Are Firms Unable or Unwilling to Retain Their Employees?

By Stephan Manning.

It is almost ironic. Some years ago many U.S. and European firms started offshoring IT, finance and accounting, software testing, engineering work and other services to India, China and other developing countries mainly to cut labor costs. Now, most of these firms struggle with retaining qualified workers abroad, after having cut thousands of jobs at home. According to various reports by the Offshoring Research Network, employee turnover remains one of the most persisting problems facing firms with offshore operations. Why is that? Well, many firms complain about ‘wage inflation’ in offshoring hotspots (see Plunkett 2014 report). But is that the whole story? Compared to Silicon Valley software engineers, most counterparts in Bangalore, India, still earn only 10-20% of salaries in the Bay area (see Payscale, article by Tam). So are firms unable or unwilling to retain workers offshore?

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Don’t Listen to Economists

By Julie A. Nelson.

According to a recent New York Times article, the Primark retailing group, based in the UK and Ireland, is stepping up to the plate to aid the families of the killed and injured in last year’s Tazreen Fashion factory fire in Bangladesh. The company claims to have already delivered $3.2 million in assistance, and a spokesperson says simply “you take responsibility for the results of where your clothes are being made.” Meanwhile, however, WalMart, Sears, and other U.S. companies that were also supplied by the factory have declined to contribute to efforts to aid the victims. What gives?

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