Exploring Opportunities and Challenges of Outsourcing Business Operations in Bangladesh: A Case Study of Nike

This research paper explores the opportunities and challenges of outsourcing business operations in Bangladesh, with a case study of Nike. It discusses the advantages and challenges of outsourcing business functions, the economic background of Bangladesh, and the implications for Nike. The paper also highlights the positive and negative sides of outsourcing business operations, the cultural diversity differences, and the issues of talent and human resource wastage. The conclusion provides recommendations for Nike and the Bangladesh government.

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Table of Contents
Introduction......................................................................................................................................2
Project Objective.............................................................................................................................2
Project Scope...................................................................................................................................3
Literature Review............................................................................................................................3
Conclusion and Recommendations..................................................................................................9
References......................................................................................................................................11

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Introduction
Outsourcing is an essential part of modern day business operations, which is mainly
implemented by multinational corporations to reduce the cost of business functions. Reduced
cost of business operations and increasing the efficiency are the major advantages of
implementing Outsourcing business functions. Major examples of outsourcing business is
evident from the business activities of American and European Nations, which outsource jobs
some other developing countries including India China and Bangladesh. The job opportunities of
outsourcing business is not only limited to manufacturing unit, it is also implemented to hire
customer service jobs, especially in the form of call centre and back office duties (Lun et al.
2016).
It is important to explore both the positive and negative side of Outsourcing business
operations in order to understand its implication in the context of current global environment.
This will also help in the matter of improving the existing business environment that is needed to
generate high end business opportunities for better levels of business outsourcing. It is also
possible to explore the existing economic environment that is needed to understand the future of
the job market in the global business environment.
Project Objective
In the given context the current project will aim to highlight the existing literature related
to opportunities and challenges in Outsourcing business operation. The advantages and
challenges will be discussed in the context of Bangladesh, which is currently regarded as one of
the emerging economies in the global platform. The case study of Nike will be discussed in the
current context, which will help to understand the importance of Outsourcing business operation
in existing external business environment of Bangladesh.

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Project Scope
The scope of the current project is limited to discussing positive and negative sides of
outsourcing business. It will therefore be possible to discuss upon the existing opportunities that
is associated with Outsourcing business. The economic background condition of Bangladesh will
be discussed, which will help to understand the current business environment that is favorable in
implementing Outsourcing business. It is therefore be possible to discuss the business
opportunity for Nike, which is currently outsourcing business jobs from Bangladesh.
The scope of the project includes exploring the given business environment of
Bangladesh that will help to predict the future economic trends of the nation. The government
reports and existing literature will be discussed, it will be possible to highlight on the existing
gaps of literature and suggest the ways that can be implemented by the Bangladesh government
to overcome the existing challenges related to the outsourcing business.
Literature Review
The existing demographic environment of Bangladesh provides high level of business
opportunity for outsourcing. This is mainly possible due to the ease of word constraint that is
motivated by the government policy of encouraging foreign cash flow. The IT segment is mostly
benefited with the policy of outsourcing business, which has allowed Bangladesh to be one of the
major players in global economy. The country is also arising as one of the favorite Outsourcing
Destination for foreign business. As mentioned by Kaur and Sharma (2017), the Outsourcing
business is mainly driven by advanced level of data that are gathered from client-server sources.

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It is also possible for the foreign business organizations provide better quality of end to end
customer service.
Bangladesh is regarded as one of the uprising economies, which is considered alongside
the BRICS Nations due the ability to encourage international business. Being in the next door of
India which is the fastest growing economy of the world, Bangladesh is able to make full use of
its geographic location in encouraging business operations from foreign multinational brands. As
labor cost in neighboring India and China is rising at a rapid rate, the foreign business
organizations are looking forward to the existing opportunity in Bangladesh. This is added with
the fact that people in Bangladesh are looking for high sustainable job market in Outsourcing
business.
Choi et al. (2017), have mentioned that with the help of effective Outsourcing business
strategy, it is possible to generate greater potential in business operations that can identify all
forms of external business risks. It is also possible fanatical multinational corporations to focus
upon soft skills generation, which is implemented in the form of effective business
communication. As outsourcing business is generated in Bangladesh, by the American
multinational company Nike, it is possible to improve on the cultural diversity levels. Hence, as
highlighted by Chatzoudes et al. (2015), improving the motivation level of the workers by
increasing their cultural awareness is one of the major advantages of outsourcing business. This
is more evident in case of, two nations which share business functions and are highly culturally
diverse. It is also essential to improve upon the existing business infrastructure to make most use
of outsourcing business opportunity (Sople 2016). This is generated in the form of improving the
existing technological infrastructure of the nation, which has direct implication on business
communication strategies.

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The Nike brand is currently one of the biggest in the sportswear industry, which has its
market in all the nations across the global platform. The manufacturing units of the company are
spread all around the globe, which helps them to provide better and efficient supply chain. The
quality of the supply chain can be improved to deal with the challenges of outsourcing.
Decreasing the cost of recruiting employees is one of the major advantages, which is
associated with Outsourcing business for Nike. The company is able to recruit more number of
people from the Asian countries like India, China and Bangladesh, which supports them with
efficient customer care service. Hence, as mentioned by Chou et al. (2015), one of the main
advantages in the given context of outsourcing business is the ability to reduce the cost of
operations. For Nike this cost helps in the purpose of investment in the marketing strategies that
is an essential part of higher growth rate of the company.
The Nike Company is currently facing high level of competition rivals from other sports
goods brands including Adidas and, Reebok. With better quality of Outsourcing business it is
possible to improve upon the supply chain and easily reach out to the customers with better and
more volume of products. Hence, the ability of the company to make use of outsourcing business
opportunity has an important role in deciding on the competitive advantage policies (Lacity and
Willcocks 2013).
The tax laws in the American region are one of the major business challenges that
restrict the growth of business. The cost of supply chain also increases due to high level of
import duty implemented by the Federal government. In the given context, Nike can make use of
the available business opportunity Outsourcing business operation to reduce the operational cost.
It can therefore be said the increased financial opportunity is an essential element associated with
outsourcing business function from Bangladesh (Mahmood 2015).

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Sports goods industry is mainly dependent upon Outsourcing sponsorship, which is a
major part of the marketing strategy. From the findings of Motahari-Nezhad et al. (2009), it is
evident that the resource based view for outsourcing business performance is essential in the
context of sports goods industry. Nevertheless, the Outsourcing opportunity is highly dependent
of an internal and external business opportunity that can help to generate higher business
performance. It is important to make use of integrative conceptual framework, which can
increase the understanding of outsourcing business opportunity. The higher level of sponsorship
in the sports goods industry is related with the business opportunity that can lead to generate
higher level of sustainability in the existing business environment (Liu et al. 2017). The
outsourcing market of the sports industry is currently growing at rapid rates for increased
efficiency that are needed to understand the changes that occur in the external business
environment.
As mentioned by Mahmood (2015), one of the major advantages of Bangladesh is due to
its demographic location that can help in the foreign companies to increase the business trading
opportunities. The company is able to make use of this as the future business sustainable chance
that can help them to gain significant competitive advantages. In the given context, it is possible
for the Nike Company to make use of the available business opportunity that is associated with
that is associated with the business environment in Bangladesh. The business opportunity for the
sports brand is also high in the region of Bangladesh compared to that of the other Asian regions.
Lacity and Willcocks (2017), has mentioned that the expenditure at the initial market
entry level is one of the major disadvantages for the outsourcing business that can increase the
cost of business operations. The cost of the market entry in Bangladesh is quite lower due to the

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fact that there are lower levels of business competition that can affect the business performance
of the foreign companies. The lower cost of labour recruitment can help the Nike Company to
lower their cost of customer care service. There is also the scale of KPMG that indicates the
lower level of cost at the market entry levels at Bangladesh. This is associated with the fact that
due to increased levels of trade competition in the neighbouring India and china, the foreign
companies are facing the issues of lack of business operational resources. These issues can be
resolved in Bangladesh as the government is able to provide greater opportunity in the forms of
lowering market entry tax and are able to provide high skilled human resources. This is promoted
in the forms of promoting soft skills development program (Askari et al. 2015).
According to Schulte et al. (2015), outsourcing business operation in a region is highly
dependent upon the inflation rate in the local economy. The rate of marketing entry is highly
dependent on the fluctuation in the inflation rate. Due to the stable nature of inflation rate in
Bangladesh economy it is possible for the foreign companies to gain rapid access in the market
with the aim of having sustainable future business growth. The government is also able to
implement permanent tax opportunity that can help in the process of having steady rise of the
market. It is also possible to predict the growing job demand in the market of Bangladesh that
can generate greater potential in the workplace of Nike.
According to Gerbl et al. (2015), one the major challenges and drawbacks in the business
opportunity in the Outsourcing business operations is associated with the security issues of data
breach. As essential company information is being shared with third party agent, the company is
at the risk of losing the legal right of intellectual property. The outsourcing agents can make
misuse of the company information that is needed to protect the data related to essential business
transaction. Due to the poor technology infrastructure in Bangladesh, the Nike Company is at the

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risk of losing the information about the financial transaction and internal business operations.
Another area of challenge in Outsourcing business operation from Bangladesh include poor
development of soft skill generation that are needed to deal with complex level of outsourcing
business operation. The call centre activities are mainly dependent upon high bandwidth speed as
a part of internet communication. Hence, it will not be possible to implement advanced form of
business communication that is needed to gain competitive advantage and make full utilisation of
outsourcing business (Sople 2016).
The financial transaction is one of the major areas of issues that are associated with most
of the business operations in the outsourcing department. As companies are aiming to cut down
their cost of financial transactions, there are higher levels of ethical risks that can compromise on
the quality of business (Betz et al. 2014). In the context of the existing business environment in
Bangladesh, the Nike Company can face the issues of payment as they aim to outsource the
freelance service for their customer support. The business economic transaction in Bangladesh is
mainly dependent on traditional techniques as most of the companies are not able to overcome
the strategic needs for the digital forms of payment. In spite of limited trade transactions the
local authority in Bangladesh has not allowed the tax free business transactions that is usually
need for outsourcing the business. Added with the issue of low internet and poor digital
infrastructure it is not possible for the nation to fully implement fully digitized forms of payment
(Askari et al. 2015).
Changes in Global Business Environment explain the major challenge all type of
outsourcing business operations. The American government is recently imposing higher level of
restriction in Outsourcing business as it is causing economic issues in the internal environment of

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the country. This is mostly due to lack of job opportunity, which is lost as most the multinational
companies are hiring jobs at much lower cost in the Asian regions (Askari et al. 2015).
Another major challenges associated with Outsourcing business is associated with talent
and human resource wastage. As the companies are hiring most of the business functions from
outside third party agents, the internal talent management program is not implemented to make
most use of available human resources. It is therefore not possible to generate internal talent
within an organisation that is needed to maintain workplace sustainability. The internal
stakeholders of the company is also not able to implement effective communication with client
and external stakeholders as most of the communication strategies are implemented by external
outsourcing agents (Chen et al. 2015). Hence, the companies have to face the issue related to the
poor business communication that can compromise the efficiency of business operations in the
fast moving competitive business environment.
The issues of cultural diversity difference between US and Bangladesh is also one of the
root causes of the business communication issues. This proves that the leadership goals of Nike
have failed to improve the levels of cultural awareness within the internal business workplaces.
Conclusion and Recommendations
Existing literature has been able to highlight of on the positive and negative sides of
outsourcing business in the context of existing condition in Bangladesh. The Nike company is
planning to hire outsource job opportunities in the market of Bangladesh. The major advantage
of Nike in the context of outsourcing business in Bangladesh is associated with stability
economic condition. Government policies of encouraging higher foreign cash flow are also
added in the given context that can help to overcome the challenge at market entry level. The
stable inflation rate in the internal economic environment of Bangladesh can help the Nike

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Company to overcome the challenge of unpredictable future condition. It will also impossible to
achieve greater business sustainability in the context of internal business environment. The
demographic location of the country is also one of the major advantages, where companies are
able to invest more due to the added opportunity that is available in India and China.
Other hand, the major challenge in the context of Bangladesh is due to poor technological
infrastructure. This is believed to be a major challenge for implementing advanced form of
business communication that is highly essential in Outsourcing business operation.
It is therefore recommended for future research work to suggest strategies that can be
implemented to improve the existing IT infrastructure in Bangladesh that can be used for as a
part of advanced forms of digital payments. It is also essential to improve upon the cultural
awareness to reduce the gap between America and Bangladesh in the context of business
communication.

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