Business process outsourcing : the foundation for future virtual organizations in India

The present research explores the possibilities and likelihood that business process outsourcing (BPO) may soon emerge as the foundation for entirely virtual organizations of the future in India. The paper suggests totally virtual companies of the future in India that adopt a new business model whose functions and activities of management are spread globally, communicate, share and disseminate information required to operate successfully on a regular basis in order to reduce the rate of employee attrition which is prevalent in the industry in India. Although BPO is a rapidly growing phenomenon in the Indian market it has also demonstrated a very high rate of employee attrition (for the reasons indicated in the paper). And it is very clear that this high rate of employee attrition needs to be reduced in order to minimize the overall cost to the organization and indeed society at large. Our research has attempted to appraise various aspects of BPO activity in order to propose solutions in reducing the rate of employee attrition. This is achieved by using different parameters of Traditional and Virtual Project Teams. This research explores the contention that Motivation plays an important role in retaining human resources (HR) in any organization and particularly with regard to the BPO industry in India. Literature review of key theories of Motivation reveals that motivation is closely related to team performance. Drawing upon this review, it is theoretically argued that the commonalities pertaining to motivation and team performance may be categorized into three dimensions, namely: Nature of Work, Rewards, and Communication. Variables related to the indicated dimensions are used as a scale to compare Traditional and Virtual project teams in BPO firms in India using Principle Component Analysis.