ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG ĐẠI HỌC KINH TẾ NGUYỄN THỊ THANH SƠN OPPORTUNITIES IN THE TOTAL SUPPORT SERVICE SECTOR AS PART OF OUTSOURCING INDUSTRY IN VIETNAM A CASE STUDY OF SODEXHO LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. Hoàng Anh Tuấn Th.S Hà Nguyên Hà Nội – 2007 z ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG ĐẠI HỌC KINH TẾ NGUYỄN THỊ THANH SƠN OPPORTUNITIES IN THE TOTAL SUPPORT SERVICE SECTOR AS PART OF OUTSOURCING INDUSTRY IN VIETNAM A CASE STUDY OF SODEXHO Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 05 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. Hoàng Anh Tuấn Th.S Hà Nguyên Hà Nội – 2007 z TABLE OF CONTENTS ABSTRACT i TÓM TẮT iii ACKNOWLEDGEMENTS v TABLE OF CONTENTS vi INTRODUCTION 1 I. RESEARCH OBJECTIVES 2 III.
RESEARCH QUESTIONS 3 IV. Analysis and interpretation 9 6. Research validity, reliability and ethics 10 V. OUTLINE 13 CHAPTER 1 14 LITERATURE REVIEW 14 1.
OUTSOURCING INDUSTRY 14 vi z 1. What is outsourcing? 14 1. Areas of outsourcing industry 24 1. Outsourcing: Pros and Cons 30 1.
The benefits of Outsourcing: 31 1. Disadvantages of Outsourcing: 35 1. THE TOTAL SUPPORT SERVICE INDUSTRY 40 CHAPTER 2 43 OUTSOURCING INDUSTRY IN VIETNAM 43 2. OVERVIEW OF OUTSOURCING INDUSTRY 43 2.
FUTURE DEVELOPMENT 47 CHAPTER 3 49 THE TOTAL SUPPORT SERVICE INDUSTRY IN VIETNAM – SODEXHO FIRM 51 3. THE TOTAL SUPPORT SERVICE INDUSTRY IN VIETNAM 51 3. Why mention to Sodexho? 58 3. FINDINGS about the total support service sectors when conducting market research for Sodexho 60 vii z 3.
Cleaning and laundry service 64 4. Maintenance service 64 CHAPTER 5 68 CONCLUSIONS AND RECOMMENDATION 68 1. For successful Outsourcing strategy 69 2. Try to limit disadvantages of outsourcing by: 69 2.
Choose the right outsourcing partner 70 2. Refer to outsourcing checklist for the real reason why you outsource 71 2. Do not rely exclusively on only one provider without considering the situation of the market and the capability of the provider. “Businesses must constantly assess the effectiveness of outsourcing" and "should not be seen as a short-term solution”.
For the total support service sector and the case of Sodexho 74 2. For service providers 74 2. For users (customers) 76 References 78 Appendices 81 Exhibit A: List of main catering companies 81 viii z Exhibit B: List of cleaning and laundry companies 83 List of interviewees 85 ix z INTRODUCTION I. BACKGROUND In order to remain competitive in today's global marketplace, organizations are turning their focus towards their core competencies and looking to outsource functions in which they lack expertise to maintain effective cost structures and to improve their bottom lines (profit).
“Some forward-thinking executives are beginning to use outsourcing as a change- management tool to drive major, enterprise-level transformation.‖ (Martha Craumer) This is an idea of a business and marketing writer at Harvard Business School in US. He considered outsourcing as a tool of change-management that helps companies to transform themselves to compete successfully with other rivals. In the context of today’s environment where competition is becoming tougher and tougher, it is essential that organizations should realize whether they should do everything by themselves or they should hire outsiders to carry some non core activities on behalf of them. By doing so, they can focus on developing their core competencies which are very important to compete with their competitors or just to gain more profits.
As a leader or manager of organization, it is better for you to know about the current trend that companies will outsource some of their non-core activities to service providers who are very professional. However, it is also necessary for leaders and managers to know about pros and cons of outsourcing activities so that 1 z they can make right decisions for their organizations. In simple word, outsourcing or not depends on analysis of its benefits and disadvantages. Thus, within scope of this thesis, I would like to study about outsourcing industry in general and the total support service sector in Vietnam in particular.
As a leader or manager of the company, it is essential to know about this trend, and the benefits and the downside of outsourcing as well as opportunities in the total support service sector. With the case study of the total support service industry with typical company Sodexho, a French firm providing support services, the thesis would like to deliver how a world wide company response to opportunities of this sector in Vietnam through market research process this company conduct in Vietnam. This market research also provides realizable information to understand about this sector in Vietnam. RESEARCH OBJECTIVES Firstly, give an overview of outsourcing industry as a current trend of today’s business Secondly, analyze the benefits and downside of outsourcing industry, which will help firms to make business decisions relating to outsourcing.
Thirdly, examine the total support service sector in Vietnam with a case study of Sodexho Fourthly, explore opportunities in the total support service industry in Vietnam. 2 z Based on these information, leaders or managers of any organizations can make decisions effectively whether they should take opportunities of outsourcing industry as a outsourcer or service providers or whether they should outsource some work to outsiders or they should keep it in-house. RESEARCH QUESTIONS This thesis aims to answer the following questions: What is outsourcing? What are the benefits/ threats of outsourcing? What should be outsourced? What is current situation of outsourcing industry in general and the total support service in particular in Vietnam? How outsourcers and service providers think about opportunities of this industry in Vietnam? What kind of lessons can be drawn from this study would be useful to leaders or managers of company? IV. METHODOLOGY Methodology usually refers to the general approaches to research while method refers to techniques for gathering evidence.
Therefore, methodology is a theory and analysis of how research is done or should proceed. It includes research paradigm, what kind of research (qualitative or quantitative), what methods to be used, how to 3 z collect data and analyze data, how to ensure the validity and reliability of the research, what kind of ethics issues may happen. Paradigm: Paradigm is considered as a basic set of beliefs that guide action. It defines the world-view of the researcher (Guba, 1990, cited in Denzin et at.
A paradigm encompasses three elements: Epistemology: asks, how do we know the world? What is the relationship between inquirer and the known? Ontology: raises basic questions about the nature of reality. Methodology: focuses on how we gain knowledge about the world Research is a process of structured inquiry that can be undertaken via different approaches (Burn, 1997). There are three common research paradigms, including positivism, constructivism and critical theory. Constructivism paradigm will be used in this research because the aim of this research is to understand the issue from multiple perspectives and describe it using qualitative approaches such as interviewing.
Constructivism aim for a depth understanding about outsourcing industry in Vietnam by consulting with different people and understanding their perceptions rather than explaining a hypothesized phenomenon (positivism) or creating social changes (critical theory). This paradigm helps us discover what we want to know through interactions with research participants 2. Qualitative research: 4 z With constructivist approach, qualitative methods will be used in the research. This methodology aims to understand and discover the nature and essences of research problems (Merriam, 1998).
Qualitative is multi-method in focus, involving an interpretive, naturalistic approach to its subject matter (Brewer & Hunter, 1989, cited in Denzin et al. It involves the studied use and collection of a variety of empirical materials such as case study, personal experience, interview, observation, etc (Denzin et al. For this research, qualitative approach is suitable because the researcher tries to explore one phenomenon in business, it is outsourcing in general and total support service in particular. This issue will be examined from many aspects, including its benefits, its pros and cons, ect.
Research methods Case study: A case study is a study in which the researcher explores a single entity or phenomenon (the case) bounded by time and activity (a program, event, process, a social group, etc.) and collect detailed information by using variety of data collection procedures during a period of time (Merriam, 1998: 21). A case study can be qualitative research or quantitative research. Stake (1994) clarifies case study into 3 types. Intrinsic case study is the study undertaken when one wants better understanding of this particular case.
5 z Instrumental case study: a particular case is examined to provide insight into an issue or refinement of theory. The case plays a supportive role, facilitating our understanding of something else. It is often looked in depth, its contexts scrutinized, its ordinary activities detailed. Collective case study: means study a number of cases jointly in order to inquire into the phenomenon, population, or general condition.
This research chooses the total support service sector with Sodexho firm as an instrumental case study to examine the opportunities of total support service industry in Vietnam. The researcher use the process of conducting market research of the company to examines carefully the total support service sector in Vietnam. Through this case, the researcher also wants to send the message to the leaders and managers about one possibility to improve its competitiveness by finding ways to improve its efficiency. For case study approach, followings are the main methods/ techniques used: In-depth interview Document review or analysis Questionnaire and survey With this case study, the researcher will conduct interview with managers of Sodexho and its potential customers, review document related to the issue, which is available for public.
The researcher also use questionnaire to further explore the opinions of customers about outsourcing activities. Interview 6 z The interview is the favorite methodological tool of the qualitative researcher. It is defined as a conversation, the art of asking questions and listening (Denzin et al. Interview can be in one of three forms: structured, unstructured, and semi-structure (Fontana & Frey, cited in Denzin et al.
Structured interviewing: refers to a situation in which an interviewer asks each respondent a series of pre-established questions with a limited set of response categories (Fontana & Frey, cited in Denzin et al. Unstructured interviewing: refers to interview without any pre-established questions. It is very flexible way to conduct an interview. The traditional type of unstructured interview is the in-depth interview.
Group interview refers to interview of several individuals simultaneously in formal or informal settings (Frey & Fontana, 1994). This type of interview is very common in marketing research where ―focus group‖ technique is widely used. The researcher will use interview method to analyze the case study as well as to gain more in-depth knowledge about this issue by consulting with executives from different companies. In-depth interview: As in-depth interview will be intensively used in this research, it is necessary to understand more about this method.
Taylor and Bogdan (1984, cited in Minichiello et al., 1990) define in-depth interview ―repeated face to face encounters between the researcher and informants 7 z directed toward understanding informant’s perspectives on their lives, experiences or situations as expressed in their own words‖. In-depth interview can be structured or unstructured. Why use in-depth in this research? Because it is the most appropriate qualitative research method to understand the insights of outsourcing from people who have experience and knowledge of the field. In other words, in-depth interview in this research is aim to gain access to, and an understanding of, activities and events which can not be observed directly by researcher.
Data collection According to Patton (2002: 4), there are three kinds of qualitative data: Interview is conduct to collect in-depth responses about people’s experiences, perceptions, opinions, feelings, and knowledge.