UNIVERSIDADE DE SÃO PAULO



Abstract Number 002-0382

The hidden face of outsourcing: reflections on the impact on organizational culture

Second World Conference on POM and 15th Annual POM Conference, Cancun, Mexico, April 30 - May 3, 2004.

Ms Clandia Maffini Gomes

Universidade de São Paulo

Faculdade de Economia, Administração e Contabilidade – FEA

Programa de Pós-Graduação em Administração

Rua Coronel Camisão, 363 Ap. 112 – Butantã

São Paulo – SP – Brazil – Zip Code: 05590-120

E-mail: maffini@ccsh.ufsm.br

Phone Fax: 11 37271468/ 11 30324640

Dr Isak Kruglianskas

Universidade de São Paulo

Faculdade de Economia, Administração e Contabilidade – FEA

Programa de Pós-Graduação em Administração

Av. Luciano Gualberto, 908 – Butantã

São Paulo – SP – Brazil – Zip Code: 05508900

E-mail: ikruglia@usp.br

Phone Fax: 11 30324640

Ms Elenir Vieira

Universidade de São Paulo

Faculdade de Economia, Administração e Contabilidade – FEA

Programa de Pós-Graduação em Administração

Av. Luciano Gualberto, 908 – Butantã

São Paulo – SP – Brazil – Zip Code: 05508900

E-mail: elenirhv@.br

Phone Fax: 11 30324640

Ms Junio Fuentes

Universidade de São Paulo

Faculdade de Economia, Administração e Contabilidade – FEA

Programa de Pós-Graduação em Administração

Av. Luciano Gualberto, 908 – Butantã

São Paulo – SP – Brazil – Zip Code: 05508900

E-mail: junio.fuentes@.br

Phone Fax: 11 30324640

Introduction

The search for a deeper knowledge of their business core processes has been driving the enterprises to concentrate their resources in their core activities in order to add value to their essential competences and to contract suppliers to perform activities that are complementary to their core business operations.

But, to maintain the business systemic effectiveness it is required a good integration between the set of regular employees of the enterprise and the group of personnel of the supplier firm specially at the tactical and operational level. The interactions between these two groups, as a consequence of the cultural differences, may generate conflicts about values, symbols, perceptions and power, affecting the good functionality of the enterprise.

The understanding of the impacts caused by the outsourcing of some services by an enterprise was the main purpose of this research. For that, it was investigated the impact of the outsourcing in its organizational culture at the “Unit of Shared Services of PETROBRAS of the Regional São Paulo/Sul”, as well as the perceptions of the regular employees and those newly-hired by the supplier firm employees.

1 The Outsourcing

The outsourcing practice as a process or a management technique appears during the Second World War, when the North American armament industries started to delegate some activities to service providers. With this practice, those industries were able to focus on their main business objectives, which were the armaments development and production (GIOSA, 1994).

In Brazil the word outsourcing (tercerização) was used for the first time at “Riocell Company”, meaning the act of hiring other people or companies for the “secondary” activities in any organization (LEIRIA E SARATT, 1995). But, later on, the concept developed to “a management process where some activities are transferred to a third part, where a partnership relationship is established, enabling the company to focus on their business core activities (GIOSA, 1994, p.14).

Many advantages have been related to the outsourcing practice, like the access to new technological resources and innovations (QUINN, 2000), better expenses estimates, costs and time previews and access to qualified personal (ALVAREZ, 1996).

To Quinn (2000, p. 13) the “innovation requires a complex knowledge that just a broader net of specialists can offer”. In this way the strategic experience of suppliers on sectors like the pharmaceutics and the electronic industries has shown good results and has been used very frequently.

On the pharmaceutic industry, hundred of small, but sophisticated firms, has entered the sector as potential innovation suppliers, reducing drastically the design cycles of new components development and tests, for the combinatory chemistry. For some pharmaceutic companies, to outsource the research activities to universities, institutes, and government laboratories has also been a positive experience.

In the electronic industry, Cysco System is a good example of outsourcing innovation. To maintain the growing rate and desirable innovation, the company established long terms relations with a select group of manufactures, opening for them its systems and processes. Today, their partner supplier contributes to the development of many of the components, hardware and manufacture innovations that are introduced in the company.

One of the strongest arguments favoring outsourcing comes from Prahalad and Hamel studies (1990). Accordingly to them, the corporations should look forward the competitive advantage, concentrating their effort on the development of essential competencies.

With the outsourcing, it’s possible to transfer to a third part those activities that are not intrinsically related with the essential competencies of the company. With this process the company can concentrate its efforts on the development of abilities that contribute more to a superior fulfillment of the strategic aspects of the business objectives.

Accordingly to Salerno apud Silva and Almeida (1997), the configuration of the outsourcing process can show three not excluding possibilities: the outsourcing of the productive activity, when the company intend to stop producing some items and to start to buy them from suppliers; the outsourcing of the support activities, when the company contract other firms to perform some complementary services like: security, gardening, restaurants, medical service, cleaning, maintenance, etc.; and the transference of workers to be hired by another company that will keep them performing activities in the enterprise.

In any of the three types of outsourcing, an organizational change process will take place and the impacts can lead to human conflicts and resistance to change due to the complex human nature.

Illustrating these conflicts and resistances, Leite (1997) mention facts like: technical personnel internal resistance, relations difficulties between internal personnel and those of the third part and the non adaptation of the partner culture to the company patterns. Accordingly to the findings of the referred author these were some of the main challenges faced by 100 studied companies that adopted the outsourcing in Brazil. This fact is corroborated by another research by Perón-de-Sá (1998) in 34 small pharmaceutic and veterinary industries, where the culture integration items and internal resistance contrasted strongly with the outsourcing implementation.

To Leiria and Saratt (1995), the internal resistance becomes a non professional behavior between the regular employees of the enterprise and the outsourced workers, leading to misappropriation of information, mistakes and omissions by the personnel directly affected by the outsourcing process, as well as difficulties created by others members of the organization not directly involved but with a feeling of solidarity to the those affected by the process.

The enterprise and the outsourced cultures can be complementary, helping the performance of the processes. Or one of them can predominate over the other, or even lead to an incompatibility, leading to productivity reduction or disruption in the relations between the company and the outsourced employees..

To Alvarez (1996) the labor unions have an important role in the resultant organizational behavior related to the outsourcing process. Those organizations are generally opposed to this type of process, justifying it with the unemployment growth and salary reduction. But the greatest problem observed regarding the union interference is the labor union decrement of power and cohesion.

The “Unit of Shared Services of PETROBRAS of the Regional São Paulo/Sul” became a strong service provider alternative for the PETROBRAS essential activities supplied to other organizations units, focusing its efforts on the administrative services (personnel, accountability, and others) and on operational support (security, gardening, and others). On the other hand, the Regional São Paulo/Sul also subcontracted workmanship to give support to activities that were considered operational (direct activities), given the existing new contracts difficulties and the demand for new personnel. This situation generated, however, conflicts and changes on the organizational culture, as will be described in the case study.

Regarding the Labor Union movement, alterations were verified only at the beginning of the outsourcing process. But, along the time, the Labor Union has been incorporating the employees of the supplier firm as affiliated of its organization.

2 Culture and Power

To understand the organization culture it is very important to study its power structure. And to analyze power it becomes necessary to understand the social structures, which justify authority. The French philosopher Michel Foucault was one of the main writers about the theme since the 70’s to his death in 1988. Publications like “Watching and Punishing” and “The Desire to Know’, and his lectures at College de France, are in the roots of the contemporary knowledge about the subject. Foucault (In: Maia, 1995) tried to analyze the power from the optic of the disciplinary power, the bio-power and the governance optic. Generically, in face of the difficulties to characterize a power theory, the philosopher understand that power is an open relation cluster, more or less coordinated (Maia, 1995).

One of the first questionings of the author is the negative vision of power, defined as a way to obligate, restrain and impose based on the domain of the social class and economic superiority. He emphasizes that, to be accepted, the power can not be a weight and must be a part of pleasant situations, the construction and production of things. On this particular, he emphasizes that power is exerted and the power relationships demand continuous confrontation and require strategies and techniques to be applied. He calls the attention to the fact that there is no power without freedom; in other words, the leader that doesn’t admit the followers disagreements will not have effective power, despite what he thinks about it.

About this point, it is possible to establish a correlation with the problems to manage culture. Pettigrew (In: Fleury and Fischer, 1996) declares that the problem of the implicit, that is, that there are also aspects that are not revealed by the people or work groups which are part of the organizational culture and affect directly the power relations.

In “Watching and Punishing” (In: Maia, 1995) Focault writes: We have to admit that this power is more exerted than possessed, that it is not an acquired or conserved privilege of the dominant class, but the mutual effect of its strategic positions – manifested effects and some time conducted by the position of the dominated ones.

As a matter of fact, Foucault reinforces the affirmation that there is no society without power relations and the power relations can affect any group. It’s a compulsory condition of the social life.

To Foucault, power, disciplinary power, bio-power and governance represent different power technologies, which coexist simultaneously.

The different processes that organize the social life and have the body as object were denominated by the author as bio-power. In Watching and Punishing the author emphasizes that: the body is also directed immersed in a political field; the power relations can reach him diectly; they invest on him, mark him, drive him, torture him, subject him to works, obligate him to ceremonies, demand him signals (Maia, 1995). The author understands the body on the individual dimension subject to training, discipline and on the other dimension, as collective population collective, with its Laws and regulations.

Disciplinary process is typical of the normative organizations as headquarters, monasteries, hospitals, and prisons; structuring the power relations with the bodies, as the author names it. The objective of this process is to make the body obedient and, with that the people can maximize their abilities, becoming more useful to their purpose. Accordingly to Foucault, there are no intentions to restrict their freedom, because as mentioned by the author, the power exists when there is a liberty condition.

The disciplinary power represents the model of social relations by excellence, present on those organizations, denominated by him as panoptic. It is a power technology and instrument that exerts surveillance and constant control over people.

What distinguishes the bio-power from the disciplinary power is the focus enlargement toward the population, the management of the relations among many people in an open environment. The new vision doesn’t despise the disciplinary power, on the opposite; they interact in a way that the bodies can be controlled more effectively.

Describing the government, the author puts it not just as a political structure or Estate administration, instead Focault reports that its primordial objective is to design the way the individuals or group should be conducted.

The author understands that the governance is to govern yourself and to govern others – which obviously presuppose and it’s part of the power relations. This last phase of Foucault studies, found in works like “The Use of Pleasure and Care Yourself”, shows an important transition of his interpretations, translating from the practice of governing others to governing your own self.

3 Methodology

The present study aims a better understanding of the “Regional São Paulo/Sul” organizational culture, based on the intensification of the outsourcing practice. The methodological approach selected was the qualitative research methodology based on the Andrew Pettigrew (1985) Context Approaching Model.

The used model assumes that the researcher findings must be interpreted with relativity, considering his proximity and involvement with the researched subject. This conceptual clarity is necessary to perform cultural analysis, because there is no way of maintaining an absolute neutrality, acknowledging that the researcher is also a person with values and culture of his own. Considering that, the Context Approaching Model stresses three main aspects: context, content and processes involved. These aspects answer three inter-related questions: Why? What? How?

Accordingly to Pettigrew (2000:53) the procedures to perform cover these three points can be done through six steps:

• To describe the process or processes under investigation, defining when and why the process begin and finish and when the investigation begins and finishes;

• To describe any variability or constancy between processes;

• To start the processes analysis using the existent process theories or developing new ones;

• To define the context analyses level (intern or extern) and some categories or variables on the analysis levels;

• To describe and analyze any variability through the contexts where the processes are passing through, and also the developing tendency of the different contexts of the study process.

This study was conducted following the analysis categories above described:

|Internal Context: |

|The Brazilian outsourcing process, focusing mainly after 1990. |

|External Context: |

|Regional São Paulo/Sul historical retrospective |

|Regional São Paulo/Sul cultural traces description |

|Content: |

|Description of the main strategies used for the Regional expansion |

|The process analysis of the Regional São Paulo/Sul Outsourcing |

|Involved Processes: |

|Adopted strategies and Outsourcing relation analysis |

|Identification of how the Outsourcing affected the organizational culture |

The data collection occurred in two interviews cycles and a focus group aiming the main outsourcing processes aspects, with the career employees and newly-hired enterprise employees. A semi-structured interview was realized with five career employees and seven newly-hired enterprise employees that participated of a focus group. The instrument used contemplated the analysis categories proposed by Andrew Pettigrew (1997).

The data was analyzed in a contextual approach and the results shown in a descriptive form. They are stratified accordingly to the involved groups perceptions and accordingly to the analysis categories: external and internal contexts, content and process. This type of analysis allowed a better perception of the positives aspects, as well as the facts that deserve a more careful attention of the company, aiming the outsourcing process impact in the organizational culture.

4 Results

4.1 External Context

The last 10 years, mainly during the Collor and FHC government, were characterized by a reduction of public jobs, indicating the privatization policies. It was a consequence of the new liberal politic adopted by the Brazilian government, where the privatized organizations had to deal with the hard times of administrative change and the organizations that weren’t privatized had to deal with its deteriorated situation. This fact impeded the public organizations to start new jobs selections processes and also new contracts, and stimulated retirement and voluntary demission. In the beginning of the 90’s, PETROBRAS had about 60 thousands employees and finished the decade with about 30 thousands employees. This situation forced the company to appeal to outsourcing.

4.2 Internal Context

The Regional São Paulo/Sul started to function even before the PETROBRAS company. It was created in 1952 by the National Oil Counsel and, during all its existence, worked as a representative office in the city of São Paulo and not in Rio de Janeiro where the PETROBRAS central office is located, showing the economic and financial importance of São Paulo.

Most of the oil suppliers industry and also four refineries and a large transport system, including a port and an extensive pipeline net are located in the Southeast region of Brazil, which includes São Paulo. Because of its strategic location, the Regional São Paulo/Sul worked as purchase department office.

Despite its importance, the office almost closed many times, with the risk of having its attributions transferred to other offices. This tendency declined in the 90’s, when the refineries engineers started to visit many international companies’ plants, mainly the French ones. The model adopted in these plants indicated that the modern tendency was to concentrate effort on the essential competencies and to transfer the support activities to a third part, or to create a centralization mechanism. Adding to this fact, the organization’s outsourcing tendency consolidated the project, so after 1996 the São Paulo State refineries begun to transfer their administrative activities to the São Paulo Office (ESPAL), which change its denomination to São Paulo Administrative Management – GEASP.

The initial negotiation planned to transfer all activities and personnel to São Paulo. But at the time, the transfer of the totality of the employees was considered unnecessary, satisfying a lot of workers that refused to move to a new city, but it didn’t satisfy the Refineries superintendents, which wished to reduced the number of employees.

The work demand was enormous. The number of employees grew from 250 to 300 and when the refineries of the South of Brazil adhered to the project in 1999, the number grew even more, achieving the total of 400 employees in the year 2000. Many workers had also to do extra time activities and even then it was unexpressive, the demand was too high.

New employees hiring were forbidden. Since the 80’s the company could not start any selection process of medium level administrative career workers, evidencing the aging of the work force and obviously the departure for retirement.

The only solution found to complement the work force, was to contract outsourced workmanship. In the last three years, the number of contracted personnel grew so much that presently it’s possible to find one outsourced administrative service employee to each PETROBRAS formal employee. In some departments of the Regional is possible to find a relation of three to one.

This relation shows how important the outsourced force is for the company, assuming jobs that were occupied before by career employees. It clearly shows the value of a deeper research on the consequences of this change on the organizational culture.

Organizational Structure

The Regional São Paulo/Sul is one of the three regional offices responsible for the PETROBRAS administrative activities (the other two are located at the cities of Rio de Janeiro and Salvador). In the year 2002 another regional office was created in Macaé. On the company hierarchy, these offices are bonded to an Executive Manager of the Shared Services unit. This unit is linked directly to the Service Director.

Managing the Regional there is a General Manager and under him 15 Area Managers. Three of them are Staff Managers (Administration, Corporate Communication and Clients Relation) and twelve Service Managers (Juristic, Personnel Services, Tributary, Accountability, Finance, Supplies, Infra-structure, Customs Dispatch, Multi-disciplinary Health Assistance, Contracts a Associated Services. There are also two more other Managerial Offices one of them in São Paulo and the other one in the south of the country that are responsible for the assistance to the clients.

The building located in São Paulo has 18 floors, 14 used by the Regional. The company is trying to find alternatives to the overcrowded use, looking for a bigger office.

Cultural Traces

The main Regional outsourced workers profiles are presented on the following table:

|Female |62% |

|Between 21 and 25 years old |34% |

|Single |61% |

|Working between 1 to 6 months in the company |30% |

|Background: basic middle level education |46% |

|Don’t study |68% |

|Position: Administrative clerk |27% |

|Had worked at the company before with other outsourcing firm |31% |

The majority of the Regional oil workers are females, between 40 and 50 years old, married and university graduated. Their profile consists of 20 to 25 years of dedication to PETROBRAS, in medium level functions, working as administrative assistants (higher level in the career). The Management, been a pro-bonus function, is not a permanent attribution. For this reason is occupied only by oil workers, though some of them have medium level functions and others superior level functions.

The difference between these profiles indicates different actions and behavior tendencies, caused by values, habits and different behaviors. It is possible to affirm that it exists a detachment between them. While the outsourced have 20 to 25 years of age, the oil workers have the same amount of work history in the company.

4.3 Content

Objectives, Values and Strategies

The main objective of the Regional São Paulo/ Sul is to provide administrative services to the PETROBRAS business strategic unities.

The research, accordingly to the interviews, suggests that some career employees think that the organization values are more economical than social and are facing a change. The company is searching for an organizational culture much more focused on services, given the peculiarities of the developed activity.

When many employees left the organization due to retirement and other reasons, the automation wasn’t enough to substitute the work force, leading to the outsourcing process in the year 2000. Accordingly to the interviewed personnel, this was not a good policy for the organization, because a lot of memory and information were lost in the process, due to the contracts dead lines. The example given was that in one sector, the number of new outsourced employees was 52 workers to 18 career employees that left the company. The lack of personnel deeply involved and the difficulties to perform training programs were also putted as negative aspects of the outsourcing.

Following the strategic planning guidelines for the period of 2003 through 2004, the new company board of directors sees as a priority the work force reconstruction. With the government of the new Brazilian President, Luis Inácio Lula da Silva, the outsourcing process will be reviewed. The idea is to reduce the outsourcing process, improve the work qualifications and conditions and open new technical and academic jobs to be filled by open concourse.

The new PETROBRAS long-term strategy is to reverse the outsourcing process started in the last government. But the question has been treated as corporative action, where the process is being reviewed and analyzed.

The Outsourced Actions

The primordial objective of the outsourcing process was to replace the part time workers in seasonal periods when additional work force was needed, like equipments maintenance breaks. The outsourcing helped the company to concentrate on its core business, executing other activities like security and green areas maintenance.

The problems started when outsourcing was used to perform permanent activities, replacing career employees. Despite the satisfactory results in short terms, the problems started after a while. It was impossible to train all the outsourced employees or permit the access to specific computerized systems, which needed the employees’ passwords.

Presently, the outsourced employees work in all administrative and support areas. The only exclusive employee activity is data processing, which demand the use of passwords.

Outsource Contract

The outsource contract is done through an invitation letter to PETROBRAS contracted companies. There is a defined profile to each function, but the main criterion used to the outsourcing is the price. The cost counts more than the service quality. The hired companies do the outsourced management.

Relations

Accordingly to the employees the relationship with the outsourced workers is not considered a good one, due to the arrogance of the career employees. But there is a reversion movement on the relationship antagonism, as we could see in the evidences of the outsource ambience investigation. In the Services Offices, outside the São Paulo head office, the relationship is considered much better. In some departments of the São Paulo head office the relationship is also better in detriment of others departments, but there is always a great detachment.

In some cases the outsourcing process affected the power relations. Some people prefer to deal with outsourced workers because they feel they have authority over them. To those individuals is a type of social ascension.

Discrimination

During the interviews the employee related that discrimination, explicit or not, exists toward the outsourced workers. Birthday parties for example, are an exclusivity of the oil workers.

Organizacional Clime

The difficulties of relationship, which includes different culture and habits, affect directly the organizational clime and the company performance. The career employees have a better performance, due to their education and training in the company. For some career employees the outsourced workers represent a threat to their job. To them, the uncomfortable clime can be noticed in the elevator line, due for example, to the age differences between oil workers and outsourced workers.

Cultural Diversity

As was discussed before, the outsourced workers have a different culture when compared to the oil workers. With that, it’s possible to find many different cultures inside the organization. To the oil workers, the outsourced workers don’t feel as a part of the PETROBRAS team, because they don’t have a common history inside the organization and don’t share the company values and references. To the oil workers the outsource culture is the lack of cultural attachment with PETROBRAS.

Symbols

The outsourcing clearly affected the power relations in the Regional São Paulo/ Sul. The symbols of these power relations conflict are very clear inside the organization. For exemple:

• The oil worker time recording machine is located in the first floor and the outsourced equipment in the underground;

• The outsourced worker uses old fashion time recording card, while the oil worker uses electronic tag;

• The color of the cards are different: the career employees have a green card and the outsourced employees have a Brown card;

• Although all the employees are subjected to the same legal regime the bonuses and benefits are different for the regular oil worker and for the employees of the outsourced supplier.

Performance Evaluation

The PETROBRAS career employees have a performance management process, where goals and responsibilities are negotiated and evaluated yearly.

To the outsourced workers this process doesn’t exist. They have their duties, execute them, and when the contract ends, they are sent away. The outsourced companies are permanently evaluated trough computerized system called BAD – Performance Evaluation Bulletin. The number of outsourced workers is regularly controlled and monthly actualized.

It’s very common to find outsourced employees expecting to be hired by PETROBRAS, what is impossible to happen. After some time the performance is affected and when they have the chance, the outsourced workers leave their jobs for better opportunities.

4.4 Processes

For the analysis of the adopted strategies and the outsourcing process this research found five important aspects: Management Profile, the Advantage of Outsourcing Workmanship, Training and Developing, Personnel Rotation and Quality.

Management Profile

In the survey, one of the employees said that the change process didn’t provoke a significant alteration on the Regional São Paulo/Sul management profile. Today, with the outsourcing reality, they have to deal with new problems. Many managers are reviewing their attitudes, which was completely favorable to the outsourcing maximization before.

Advantage of Outsourcing Workmanship

In the survey the interviewed managers didn’t believe there are advantages in outsourcing workmanship resources in a government company even if the objective is to find an ideal profile to the function. Not just in government companies, but also in all companies the outsourcing is not considered a good option, and should be used just in cases of seasonality. When there are perspectives of turning it to a permanent activity, the outsourcing should be arranged with a clear partnership situation between the employer company and the hired company. By this arrangement the outsourced worker will not feel diminished compared to other workers.

In the PETROBRAS case, the bidding criteria should be reviewed, including the training and benefits aspects as requirement for contracting and not just the lowest cost.

Training and Development

It’s impossible to have a training and development policy in the firm, because the outsourced workers can’t go through these processes without characterizing a permanent employment fit. The outsourced workers have to be trained by the firm he was hired, but this kind of training is very dubious on quality terms. On the other hand, the PETROBRAS employees pass through a high level of training process constantly. PETROBRAS is one of the most training investor companies of the country. These differences lead to strong difficulties in organizing a formal process that can appreciate and assimilate the knowledge brought by the outsourced workers.

Quality

Accordingly to the survey, the problem in terms of quality is not in the process, but in the way the outsourced workers are hired. For one of the interviewed respondents of the survey, the core activities should be prioritized and the others non-relevant activities for the business should be negotiated with the government in order to introduce changes in the bidding processes, trying to reduce the importance of the lowest cost criterion and introducing a better balance between cost and quality.

Regarding the discussion about the way outsourcing affected the organizational culture, one of the relevant aspects refers to the oil workers and outsourced workers conflicts. In some departments these conflicts are explicit. In other departments they exist, accordingly to the employees, but are not shown.

The critical conflicts points between regular workers and employees of the outsourced firm are centered on the age differences, the education background (in general the regular workers have a higher technical level) and the salary and economic conditions. The existing conflicts are punctual and were brought by the survey done in the year 2002. The work relations and the benefits are very different. This contributes significantly to the conflict generation.

.5 The conflicts reasons accordingly to the outsourced workers perceptions

To compose the focus group, seven outsourced employees from seven different departments were interviewed. In that occasion some aspects related to the outsourcing process were surveyed and discussed.

Related to the contracts aspects, firing of outsourcing workers were the most common fear of the workers. Some PETROBRAS outsourced workers that are there for a long time have already worked in other firms. They don’t leave for vacations for a long time, they are not allowed to get flexibility in their work schedule and they have to work in the weekends without extra payment.

They feel strongly discriminated and emphasize that this situation was created by the oil workers. For them, the majority of the oil workers have a lack of human conscience. But, on the other hand, there are some oil workers that feel bad about the inequality situation.

To the interviewed outsourced workers, there is a great cultural difference. Some time ago people, at the age of 50 and 60, circulated in all floors. In the last years, due to transference, new jobs creations in the refineries and the stimulated retirement, the oil workers left the company.

The salary, for them, is the principal conflict generator. Accordingly to them, the oil worker gets a ten times higher salary then the outsourced. And it doesn’t matter how many years the worker is in the company; the payment is the same. The salary diverges even between the outsourced workers, depending in which company he works for. Because PETROBRAS chooses the outsourced worker by the lowest salary, the qualification is not important. In this situation there is a feeling that the work done is not adequately paid, causing an extreme unpleasant feeling, discouraging a positive attitude toward the work.

Another conflict point is related with the work merits and recognition. The merits and recognitions for a well done job is reserved to the oil worker names. This fact leads the outsourced worked to conclude that is better to remain in the same lever of performance as everybody than to be excellent, due to the existing unfair competition. For them, some oil workers think that if they were permanently hired, the career employees could loose their job.

The outsourced workers think that the relations between them and the oil workers are bad. The situation goes even to the extreme points where the outsourced worker doesn’t talk to the oil worker. They feel they are completely rejected, don’t get any recognition for his work and have to listen to jokes and bad commentaries.

One of the critics presented was about the fact that some retired oil workers keep working at PETROBRAS, accumulating salaries and retirement payments. For the outsourced workers they should leave and open space for new outsourced hiring. They don’t believe in the manager’s power, because, for them, if the manager assumed an anti-discrimination attitude, things would be different.

6 Final Considerations

This present study tried to identify the outsourcing process impacts in the organizational culture, from the perspectives of permanent regular employees and that of the outsourced employees. Based on the findings of the research there was an attempt to consolidate the data collected accordingly to the following categories of analysis: external context, internal context, content and process.

The research was conducted at the “Unit of Shared Services of PETROBRAS of the Regional São Paulo/Sul” based on interviews of permanent regular workers of the enterprise and workers belonging the supplier firm responsible to provide services that were the object of outsourcing by PETROBRAS.

In the external context it is important to emphasize the politic influence of the new liberal approach adopted by the Brazilian government, privileging the economic aspects, that was imposed to the government owned companies with some negative effects in the social field.

In the internal context, the privatization perspective created work force and costs reduction necessities. This generated inadequate outsourcing processes, without evaluations procedures of the outsourcing impacts on the organizational culture and on the work social relations in the companies.

From the content point of view, the relationship between the government owned company workers and the outsourced ones it was found a lot of discrimination, influencing the organization performance and affecting the organizational climate. The oil workers do not consider that the cultural diversity that was established was a positive accomplishment. New power relations are appeared where the oil workers are the dominants what did not existed before, because everybody worked as equals.

From the process point of view, it’s important to observe the juridical impossibility of a outsourced workers training program and development policy. The different salaries for the same functions are additional sources of lack of satisfaction and conflict sources. It’s also important to report the subculture formation inside the organization.

The increase of outsourced workers numbers and their lack of integration with the oil workers culture are creating an outsourced employees subculture in the Regional São Paulo/Sul. The subculture is clearly defined through the creations of symbols, like the colors of the nametags, the time record procedure and the different way the oil workers are treated.

Some oil workers started to see and to sstudy the conflict environment created between the outsourced workers subculture and the oil workers dominant culture, creating a contra-culture movement. The objective of this movement is to end the outsourced discrimination and to reduce their exploitation through open hiring concourses, eliminating then the outsourced sub-culture and incorporating them to the oil workers dominant culture.

Going back to the Salerno analysis (quoted by Silvia and Almeida 1977), we can see that the outsourcing in the PETROBRAS Regional São Paulo/Sul has its emphasis in the workmanship sub-location. This aspect reinforces the difficulties between internal personnel and and third parts relationship, as said Leite (1997). The research indicates a tendency toward a rupture due to the close relationship incompatibility, as puts Leiria and Saratt (1995), if the PETROBRAS Regional São Paulo/Sul don’t review its present hiring practices.

Maia (1995), interpreting Foucault, assumes that there is no power without freedom, in a negative vision of power. But to be accepted, the power cannot be a weight to dominated people, it must produce the pleasure and the construction of things. At PETROBRAS, the research diagnosis showed the negative aspect of the power relation between career employees and outsourced ones. Maia (1995) reinforces that the society cannot exist without the power relations, but they have to be conducted to help the organization growth.

The evidences collected in the research, mainly those ones related to the subjection of the outsourced workers to the oil workers, are assured by the Foucault apud Maia (1995) sentence: the body is also directed deepen in a political field; the power relations have immediate effects on him; they invest him, mark him, drive him, mistreat him, subject him to works, obligate him to ceremonies. This situation can be related with the implicit Pettigrew (1985) concept, where the leader must have in mind that people accept behaviors and, some times, don’t even discuss them.

The PETROBRAS outsourcing process had as main objective supply the workmanship reposition emergency necessities, but its consequences were more negative than positive for a so much complex organization. It is clear that the company need to start to hire again new career employees, a fundamental process to rescue the organization own identity. Otherwise, it will be necessary a hiring criteria redefinition, privileging the humanization of this process and the relations between outsourced and career employees.

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