NAME: Jorge Elias Canales Mayorga

INDIVIDUAL REPORT

CASE: FEED R&D (OR) FARM IT OUT

MIB 2017

GROUP: 1

1) What are the advantages and disadvantages of each option? To answer this question, I
will divide my answer in the advantage and disadvantage of outsourcing and in-house
operation for the RLK ivid technology software for their handheld device.
Advantages: outsourcing
- its cost saving 1/5, of the total cost of the project if develop and outsource in India.
- Reduce time, in the implementation and full development of the new product.
- Reduce overall risk.
- Exchange knowledge
Disadvantages: outsourcing
- Information Leak.
- Losing control and management of operations.
- Payment of Royalty.
- Might trigger internal conflict in USA R&D department.
- NOT a full USA made product
Advantages: Inhouse
- Security, no information leakage.
- Better qualify R&D team.
- USA product
- No cultural barrier.
Disadvantages: Inhouse
- High expenses due to hiring of new professional.
- Limited knowledge.
- High bankruptcy Risk.

2) Should RLK Media outsource/offshore the software development?

From my point of view RLK media has a high risk of going bankrupt if they decide to go for
the developing of the software in house it will cause the firm to become unstable-financially
if the product takes more than 12-18 month to develop, the outsourcing is a great idea from
my point of view it doesnt only reduces the cost but Innova is willing to share the risk as an
strategic partner to develop the software for a 5% royalty of the product, Innova seems to
be purpose driven company with focus in long term partnership which gave me a hint that a
outsourcing is a YES.

3) What are the inter-cultural challenges RLK and Inova are likely to encounter if they enter
a partnership?
Based on the Hofstede : 4 culture dimension we have the following
1. Power distance [acceptance that power is not distributed equally]
2. Uncertainty avoidance [people feel threatened by ambiguous situations]
3. Individualism [tendency of people to look after themselves and their immediate
family only]
4. Masculinity [dominant values of society are success, money, and things; gendered
roles]

4) If RLK decides to outsource to Inova, how would you manage the inter-cultural
challenges?
-RLK can ask the Inova to make it possible for Indian professionals to be available at the
timings when the RLK employees are working to provide them R&D support and make their
employees (RLK)
To be available for the Indian counterpart in the same way.
-RLK can send some employees who work with the Indian counterpart to india for few
months, so that they can work together and learn more about the culture and experience it
by being there and in the same way Indian counter part can send the employees to work
together with RLK to learn how their working culture is.