Research_Methods

TITLE 1. Degree name: 2. Degree code: 3. Unit name and level: Research Methods Level 2 4. Student name: 5. Student number: 6. Tutor: 7. Total word count: 3371 CONTENTS Introduction……………………………………………3 Research question……………………………………...6 Literature review……………………………………….7 Research methodology……………………..…………..12 Conclusion……………………………………………...17 Bibliography and References…………………………..19 INTRODUCTION The Army for so many years has been relying on outsourcing and Sub contracting of equipment management, jobs and services. According to Kenneth L. Deavers (2007) popular use of outsourcing as a description of corporations’ search for cheap labour reflects a belief about the motives and consequences of economic restructuring, not careful analysis. I believe several factors are at work simultaneously that are likely to increase outsourcing: rapid technological change, increased risk and the search for flexibility, greater emphasis on core corporate competencies, and globalization. In this broader context, outsourcing is the result of a complex change in the cost boundaries facing firms as they choose between inside and outside production (Deavers, Kenneth L.). The Army is now paying close attention to Afghanistan, so outsourcing and sub contracting frees it from commitments such as cleaning, catering, servicing of vehicles and equipment, transportation and other deliveries across its worldwide operations. This way, the army is left to focus solely on its core activities of security, military training, combats, reconstruction, peace keeping and humanitarian assistance (Jeremy Waud is MD at Incentive FM). The Army gives contracts to third-party logistics and private companies based on merit. The best company wins. The Army get its funding from the Government which is based on an annual budget. It is a non profitable organisation so saving money is a key issue. Therefore reliable, efficient and effective companies must be awarded with the contracts. For the purposes of this study, a third-party logistics company is the middle man between the manufacturer and the Army. It is a private firm contracted to provide logistics services to the army. They are called third-party because they do not own the product but participate in the supply chain at points between the manufacturer and the British army or vice - versa. The third-party logistics company can perform any or all logistics functions that exist between the manufacturer and the user. These functions include warehouse, distribution and supply-chain management. This also involves usage of road, rail and air transport. The demand for logistic services by the defence industry in UK has always depended on its engagements obtaining a given time. Butler, Kenny and Anchor (2000) have noted that there was a lull in the demand of logistics services after the cold war but there is increased activity during war times, especially with the Afghanistan war. In the current environment which is characterized by a global financial meltdown, there has been a reduction in the defence budget whilst the Afghanistan war has led to an increased need for outsourcing which helps in cutting costs. In this context, Butler Kenny and Anchor (2000) highlight that there is an increased need for transparency on contract allocation amongst the competing companies. This situation has made contract appraisals ever more important. As British army logistics evolve into an anticipatory, distribution-based system, there is a growing need to assess the full implications of using third-party logistics and private companies (by Major Sylvester H. Brown USAR). Such an assessment will integrate and leverage the Army's organic capabilities with those of third-party logistics and private companies to enhance supply chain management in times of peace and war. In performing the assessment, several issues need to be considered that will help in anticipating classes of supply that may be delivered to various points under different conditions in the distribution supply chain by third-party logistics companies. During times of increased activity such as conflicts, reconstruction of Iraq and Afghanistan in this case, humanitarian and wars, the army cannot logistically sustain the demand that is imposed on them in transporting goods, services and the movements of troops. In efforts to meet such increases in demand for logistic services the army resorts to outsourcing these logistic services to the private sector. The need to enlist the private sector or third party contractors is also necessitated by the fact that the defence industry cannot supply or meet its logistical requirements in its sphere of operation. This is one of the challenges currently being faced in Afghanistan. In realization of these challenges this paper therefore, seeks to explore the problems that are faced by the army due to outsourcing, of using third party contractors. RESEARCH QUESTION An exploration into the problems faced by the British army due to outsourcing or usage of third party logistics service providers and Sub contracting of equipment management, jobs and services in supplying the British forces in Operational and non operational times. LITERATURE REVIEW Outsourcing and sub contracting of services is typically done to reduce costs, but it also holds many hidden risks. In times of high logistics demand the Army has to outsource and or sub contract most of its resources from third party and private companies (Major Sylvester H. Brown, USAR). The process involves contracting out processes to private companies’ tasks that used to be performed by members of the uniformed military. The assignments range from mundane jobs like cooking and cleaning, to specialized ones like maintaining and repairing sophisticated weapons systems, security, translating and transcribing, and interrogating prisoners during operational duties. Outsourcing is part of the UKs general policy towards privatization (Richard Cardinal 2001). MoD and the Armed Forces have to decide on whether to undertake activities ‘in-house’ or to buy goods and services from the market (ie. the make or buy decision). According to Ann Webb Air University (2005) the military cannot continue without outsourcing and privatization of the defence infrastructure. According to Richard Cardinal (2001) privatization and outsourcing in many sectors may simply be defined as allowing profit making corporations to take over duties that have been traditionally performed by indigenous personnel. Yet it is argued that from the standpoint of organized labour, privatization and outsourcing may show short-run savings. This is because unions believe that private contractors will purposely underestimate cost at the beginning in order to secure the contract. This is called low balling or buying in. But once the government work is turned over to private business, the drive to produce profits takes over and contract cost rises. Subsequently the government loses the ability to perform the work and becomes dependent on the contractor, no matter what the cost. Then it becomes difficult to write fully-specified contracts which meet all unknown and unknowable future events, especially where contracts cover long periods of time, where technologies, costs and the strategic environment are highly uncertain and where the contractor has to commit to funding costly and highly specific investments. This will cause imperfect information from contract parties enabling them to behave opportunistically exploiting information asymmetries (e.g. about the true costs or quality of supply). Also when outsourcing or sub-contracting, logistic defence contract negotiators would want to appraise the level of planning that potential suppliers are capable of delivering. However companies with better management and staff are likely to offer better quality logistics than the comparison. On the weighting scales these companies receive higher scores. According to Williamson, (1975) a central feature of outsourcing and the economics of contracting is the notion of transaction costs. These are ‘the costs of running the economic system’ and include the costs of negotiating, monitoring and enforcing contracts. Professor Keith Hartley also quoted that competitive tendering and contracting-out leads to poor quality and unreliable services and that private contractors are less reliable than in-house units. Competitive tendering also involves transaction costs which are often ignored by the supporters of contracting-out eg. Costs of organizing a competition, negotiating and policing. The arguments for and against competitive tendering provide opportunities for independent economic analysis, critical evaluation and empirical testing. Some of the arguments obviously represent special pleading by those interest groups most likely to gain or lose from the policy. For example, if MoD requires improved efficiency, contracting-out is not sufficient: competition is also required (hence, competitive tendering). There are also some distinctive features of military outsourcing which can be grouped around its implications for operational capability. The use of civilians to replace military personnel might have adverse impacts on the morale and ‘fighting spirit’ of the Armed Forces (eg. a change in organisational culture). That is why the delivery of this capability depends heavily on the right selection of the third part logistics providers. Service providers should be appraised to ensure that they can honour the contracts as specified. (PMFs) Private Military Firms are businesses that specialize in providing military services and skills. P.W. Singer (2001-2002) noted that critical loss of control of PMFs has become increasingly popular, so too does the danger of their clients becoming overly dependent on their services. Reliance on a private firm means that an integral part of one's strategic success is vulnerable to changes in market costs and incentives. This dependence can result in two potential risks to the security of the client: (1) the agent (the firm) might leave its principal (the client) in the lurch, or (2) the agent might gain dominance over the principal. A PMF may have no compunction about suspending its contract if a situation becomes too risky in either financial or physical terms (Private Miltary Firms (DCAF, 2001). Because they are typically based elsewhere, and in the absence of applicable international laws to enforce compliance, PMFs face no real risk of punishment if they or their employees defect from their contractual obligations. In addition to sometimes failing to fulfil their contractual obligations, type 1 firms may pose another risk. In weak or failed states, PMFs, which are often the most powerful force on the local scene, may take steps to protect their own interests. Thus early termination of a contract, dissatisfaction with the terms of payment, or disagreements over specific orders could lead to unpleasant repercussions for a weak client. Another risk of outsourcing is that a firm's motivations for fighting may differ from those of its client. This is particularly a problem for clients that contract type 1 firms. These clients are often those most in need yet least able to pay and thus at the highest risk of default. In a number of cases, this imbalance has led to the creation of curious structures that attempt to align client and firm incentives Also, there are unresolved issues about the use of (CONDO: contractors on deployed operations). The purpose of CONDO is to provide an alternative means of delivering capability by using contractors within operational areas to support and augment the capability of the Armed Forces as part of the civilian component of a deployed military force. Responsibility for CONDO policy rests with Assistant Chief of the Defence Staff. (The UK MOD Defence Acquisition Community). The UK has approached this issue by creating a new class of reservist, a Sponsored Reserve. But the prospect of using contractors in conflict situations requires flexible contracts different from contracting for support operations during peacetime. Many of the issues surrounding contractors in conflict situations (CONDO) are issues of trust, confidence, mutual understanding and partnership: such features are difficult to include in a standard contract (RUSI, 2000). However one other reason for outsourcing logistics by the defence ministries is the ability to have access to innovation, new technology and skills (Elmuti and Kathawala, 2000). Companies that are run by innovative, adaptive and logistics skilled managers will be more favoured than those with weaker management. Companies run by ex-forces personnel for example can be given favourable considerations since these will have a better understanding of defence operations. Some logistic support for projects like supplying of ammunition to frontline troops are sensitive and should be handled by competed suppliers as the lack of quality supply can mean loss of operational effectiveness and or even loss of lives. This model assesses the financial costs of outsourcing to a logistic supply partner. It looks at the cost of the goods and services, assurance of delivery, carries out the sourcing risk assessment of using the supplier, assesses the supplier’s readiness to share information and the supplier’s readiness to solve problems. In defence logistics these considerations are most important especially with governments pushing towards defence expenditure cuts. RESEARCH METHODOLOGY The focus of this research is to analyse problems faced by the army due to outsourcing or usage of third party logistics service providers and Sub contracting of equipment management, jobs and services in supplying the forces in Operational and non operational times. The research will comprise of both primary and secondary data collection. Primary Data is the data that is not already available. The researcher collects is first-hand. It is always good to use primary data collection methods because you get basic data, unbiased and original information, data from the primary market and direct from the population. There are also disadvantages, which are as follows, time consuming, raw data, Direct and personal intervention has to be there and huge volume of data. The methods used can be as follows: i.Questionnaires. ii.Interviews. iii.Focus groups iv.Observation. v.others. Secondary data is data that is neither collected directly by the user nor specifically for the user, often under conditions not known to the user. Examples include Government reports. Secondary data is cheaper and more quickly available than primary data, but likely to need processing before it is useful. However, besides its advantages it has certain disadvantages as follows: Problem of being defined differently, more prone to error and copy right problem. (www.Lancs.ac.uk/MarketAnalysis) Secondary data can be of two types and these are, Cross sectional data and longitudinal data. Cross Sectional Data: It is the data collected at the same time from different places and Longitudinal Data: It is the data collected at regular time intervals. In this research I am going to use the Questionnaires method and 100 Questionnaires will be printed and issued out. It is ideal for this research because it’s a cheap method of data collection when compared to face-to-face interviews, mostly because of the costs associated with travel time (Bachrack and Scoble, 1967). They are also easy to analyze, and most statistical analysis software can easily process them, it covers a large number of people or organisations and also people can take their own time to fill the questionnaire which will minimize the potential of errors from the respondents. And it will give eliciting answers as close as possible to the truth. The research will also focus on interviewing Army personal who are directly involved with and also affected by the use of third party contractors’ i.e. • Logistics suppliers and their Commanders • Army engineers • QM’s department The Interview method is also good because it makes In-depth answers possible, you get qualitative data obtained from small sample, observation improves accuracy and also rapport leads to fewer refusals. In logic, we often refer to the two broad methods of reasoning as the deductive and inductive approaches. In this research I am going to employ both deductive and inductive approaches .This will help us examine both theories and lead us to analyse all the data. Deduction Method Deductive reasoning works from the more general to the more specific. Sometimes this is informally called a "top-down" approach. We might begin with thinking up a theory about our topic of interest. We then narrow that down into more specific hypotheses that we can test. We narrow down even further when we collect observations to address the hypotheses. This ultimately leads us to be able to test the hypotheses with specific data -- a confirmation (or not) of our original theories. (William M.K. Trochim) Induction Method [pic] Inductive reasoning works the other way, moving from specific observations to broader generalizations and theories. Informally, we sometimes call this a "bottom up" approach (please note that it's "bottom up" and not "bottoms up" which is the kind of thing the bartender says to customers when he's trying to close for the night!). In inductive reasoning, we begin with specific observations and measures, begin to detect patterns and regularities, formulate some tentative hypotheses that we can explore, and finally end up developing some general conclusions or theories. (William M.K. Trochim) As with all research, there are limitations to the interpretation of the results and other issues that need to be considered when trying to generalize these analyses to broader issues of interest. Some of the difficulties will be met when gathering and processing data which can turn out to be very expensive. The research may lack the expertise to conduct extensive surveys to gather primary data, whatever the potential benefits, since they won’t be funds to pay specialist research agencies to gather such data.  In this case the research may be forced to rely on data that is less than ‘perfect’ but that can be accessed more cheaply, e.g., from secondary sources. Also the value of any research findings depend critically on the accuracy of the data collected. There can also be legal and ethical constraints the Data Protection Act (1998) is a good example of a law that has a number of implications for researchers collecting and holding personal data.  CONCLUSIONS An adequate supply system and stocks of weapons, petrol and ammunition are essential conditions for any army to be able to stand successfully the strain of battle. Before the fighting proper, the battle is fought and decided by the quartermasters [logisticians], (Rutenberg and Allen, 1991). Lessons learned from recent military operations indicate that contracting and outsourcing may be an effective force multiplier. They can increase existing capabilities, provide new sources of supplies and services and bridge gaps in the deployed force structure. In the event of an emergency or contingency operation, contract personnel may be required to perform services in a hostile theatre of operations. This requires an assessment of the risk involved to the personnel and to the operation itself. Failure of the contractor to provide the required support may jeopardize the overall success of the mission. A detailed contingency plan for obtaining contractor-provided services from an alternate source (where there is reasonable doubt that the essential services provided by a contractor will continue) is required. We can conclude that contractors need to be in the depots as well as on the battlefield performing their job even when confronted by life-threatening hostilities, (Richard Cardinali 2001) This research will test and see if the Army is benefiting by outsourcing goods and services. It will focus on the implications of using outsourcing /third party companies in providing logistics in the Army. With all the advantages presented by outsourcing this research will investigate how it is affecting the effectiveness of the Army in times of peace and on operations. As part of our primary data collection, questionnaires will be sent to the army personal who will be selected at random to avoid any bias. Also semi structured interviews will be carried out informally. After all the data has been collected and analysed this will give us a clear view of whether it is profitable or not, to outsource/ use third party companies in providing logistics to the Army. Also how the failures of contractors to deliver logistics on time is affecting the operational effectiveness, the moral of the soldiers who are on operation and not forgetting the time and costs that are involved. With the research complete it should shed a light and increase knowledge and understanding of the effects of outsourcing with the aim of developing and improving services that are offered to the Army. BIBLIOGRAPHY AND REFERENCES Ann Webb Air University (2005) (Bachrack and Scoble, 1967) Butler, Kenny and Anchor (2000) Choy and Lee (2002) Copyright ©2006, William M.K. Trochim (http://www.socialresearchmethods.net) Damien Basile (May 2009 ) (Elmuti and Kathawala, 2000) http://www.army.mod.uk/rlc/logistic.aspx (Jeremy Waud is MD at Incentive FM) K Hartley (Centre for Defence Economics, University of York) Kenneth L. Deavers (2007) Major Sylvester H. Brown, USAR (by Major Sylvester H. Brown, USAR) Private Miltary Firms (DCAF, 2001) Reeve (2008) Richard Cardinal (2001) Richard Cardinal is Dissertation Adviser, Computer Information Technology, Nova Southeastern University, Miami Beach Rutenberg and Allen, 1991). Williamson, (1975) (www.Lancs.ac.uk/MarketAnalysis)