The structure of an industry has a major role in defining a company's competitive advantage in this global scenario. An industry is conceived as a group of companies that market products which substitute each other. The structure of an industry has a direct relation to its profitability. Service industry can be considered as a classic example in this regard. In the post liberalization and globalization era, the concept of outsourcing has gained more attention. Cost is playing a major role deciding the competitive advantage of an organization. Companies are thinking of different options to reduce cost and increase its competitiveness. Outsourcing of production and service has been considered as an effective way to reduce competitiveness. Companies in the western world have been outsourcing jobs and production facilities from their land to low cost areas such as India, Brazil, China and East Asian countries.
With the industrialization process of the 20th century, salary levels and capital cost of Western countries had shoot up substantially and this had been eating up a major pie from companies' profit. There was no sign of reduction of cost and salaries. This has compelled corporates to think of other options. During 1980's companies had find East Asian and Latin American countries as a good destination for moving production and services. While companies in Western countries have good technology, better expertise, capital strength and understanding of the market, these countries provide low cost land, human resource and raw materials. Synergising both these strengths has given companies more competitive advantage in their domestic market. Their production cost has come down sharply with this move. It is considered that high skilled labour, highly professional management team, low cost work environment, best management and HR practices, innovation, understanding of the industry and security measures are the major strengths of the organization in the globalised world. Most of these strengths are adopted by companies do to the particular character of the outsourcing industry. In the early 1990's the industrial scenario in developing countries was quite different from that of western countries. Here companies were least bothered of good corporate governance practices, HR management, cost, profitability, security and customer satisfaction. The state protective measures made the industry inefficient. Companies got huge subsidies for every thing and any thing. But with the entry of multi national companies to these markets, situation has changed drastically and a new corporate governance practice has been established.
In the labour relation also there has been a paradigm shift in the past one and half decade. Technology has played a major role in changing labour outlook and mindset. Also the process of Globalisation, Liberalisation and Privatisation has played a major role in redefining the perception on labor. Today corporates and industry are keener on optimum use of labor and they are always thinking of new ways to improve efficiency and output. The increasing global competition has demanded new approach to the labor. There has been an increasing demand for skilled labor forces. The skill level of the workforce in developing countries was a major challenge for companies moving from western market to emerging