Business HL IA print.docx

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Business HL Internal Assessment Tuo Li | 002159-001

Candidate Name: Tuo Li

Candidate Number: 002159-001

Date: 14th of February, 2013

Business and Management HL:

Should “PetroKazakhstan” recruit a new in-house translator or outsource this service, to solve its

regional director’s increasing workload?

Research Proposal: 337 words

Abstract: 281 words

Written Report: 1997 words

Number of Pages: 23

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Table of Contents

Research proposal………………………………………………………………………………………………………………………………3

Acknowledgements…………………………………………………………………………………………………………………………….4

Abstract……………………………………………………………………………………………………………………………...................5

Introduction……………………………………………………………………………………………………………………………………….6

Determining problem……………………………………………………………………………………………………………..7

Analysis of options………………………………………………………………………………………………………………………………8

Data forecasting using Time Series Analysis and Jump Method……………………………………………….8

Data forecasting using Estimate Percentage Increase……………………………………………………………11

Financial calculations of the two options:……………………………………………………………………………..12

Outsourcing the translations service…………………………………………………………………………12

Recruiting a full time in-house translator………………………………………………………………….12

Evaluation…………………………………………………………………………………………………………………………………………13

Conclusion and recommendations……………………………………………………………………………………………………14

Bibliography……………………………………………………………………………………………………………………………………15

Appendices………………………………………………………………………………………………………………………………………16

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Research Proposal:

The aim of this investigation will be to evaluate the two possible solutions to the problem of PetroKazkhstan’s regional director’s secretary’s increasing workload in translation of the company’s documents, answering the following research question:

“Should PetroKazakhstan recruit a new in-house translator or outsource this service, to solve its regional director’s secretary’s workload?”

This topic primarily interests me as it deals with issues in the management of working conditions and the motivation of workers. In rapidly developing world today, a stressful working condition is a global problem that affects many company’s employers and employees. This research will require an extensive knowledge on both business theories such as Fredrick Herzberg’s theory of motivation factors and hygiene needs. In addition, various analytical tools will be needed to forecast the change in the amount of documents required for translation, such as the Time Series Analysis and Jump Method.

In order to calculate the financial costs of the two options, I will also need to carry out primary and secondary researches to gather data and background knowledge from a variety of sources including, but not limited to interview, company records, textbook and internet.

After the comparing both financial and non-financial advantages and disadvantages of the two possible solutions, I will be able to make a final recommendation to PetroKazakhstan about which one of the option should they adopt.

Action PlanTask Expect due time Source(s) of

informationDelayed or not If yes, to what date

and for what reason

Gathering background information, such as motivation theories and exchange rate of USD to KZT

2nd of September, 2012

Textbook, internet (secondary researches)

No

Interview with the secretary, AsselTaripova

6th of September, 2012

Interview (primary research)

Yes To 11th of September, 2012 due to the secretary went on a business trip

Gathering information from PetroKazkhstan’s database

13th of September, 2012

PetroKazakhstan’s database (primary research)

No

First Draft 29th of October, 2012

No

Final Draft 7th of December, 2012

No

Final IA 14th of February, 2013

Yes To 18th of February, 2013 for final modifications

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Special thanks to:

Assel Taripova

Yonghong Li

Elinor Kurton

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Abstract:

This investigation focuses on finding a solution to the problem of PetroKazkhstan’s regional director’s secretary’s increasing workload in translation of the company’s documents. The investigation evaluated two possible solutions to the problem, by answering the following research question:


The investigation collected information from a variety of sources including the interview with the secretary, PetroKazakhstan’s records and the exchange rate on currency exchange websites. Thus, with the aid of Fredrick Herzberg’s theory of motivation factors and hygiene needs, it was able to determine the impact of the increasing workload on the secretary’s efficiency at work.

The increase of the secretary’s translation workload was calculated by using Time Series Analysis, Jump Method and estimated percentage increase in documents. The results revealed that the company should expect a 15~20 documents requiring for translation increase in the year 2012. To determine which one of the two is a more effective solution to the problem, the financial costs of both options were found through calculation. The price for translation paid per document for outsourcing the translation service is around 13410 ~ 26820 Kazakh Tenge, whereas for recruiting a full time in-house translator the price was 13301 Kazakh Tenge.

The two options were compared in both financial and non-financial perspectives, considering the price for translation paid per document, flexibility of the translation services and possible threats caused by vicious competition between employees. Based on the financial advantage shown by the calculations made in this investigation and the efficacy of an in-house translator’s flexibility, it can hence be recommended that PetroKazakhstan choose the option of recruiting a full time translator.

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Introduction

The branch of the company PetroKazakhstan, Astana, Kazakhstan, opened in 2008 and is under the control of China National Petroleum Corporation, owned by the Chinese government. It consists of a regional director and five employees. The parent company deals with oil and natural gas extraction, whereas PetroKazakhstan focuses on public relations with the government and the company’s suppliers. During the past years, as PetroKazakhstan expanded in Kazakhstan, the subsection started to face an increasing number of documents required for translation for successful communication with both internal employees and external partners, who had a Chinese-Russian language barrier.

The secretary of the director is currently responsible for the translation task in the subsection. According to her, she is able to “deal with ordinary documents, but the technical and legislative documents are too time-consuming combined with other tasks [as a secretary]”. To solve this problem, two possible solutions in the following research question should be considered:


This investigation’s objectives are:

To discuss the difficulties the secretary is facing and their impacts

To predict how the problem may evolve in the year of 2012

To calculate the financial costs of the two possible solutions

To evaluate the two possible solutions’ financial and non-financial advantages and disadvantages

To identify and justify the most beneficial option for the PetroKazakhstan carry out in the final recommendation

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Determining problem:

From the interview with the secretary1, one of the major difficulties she is facing is the increasing amount of documents that require translation. The data of the number of documents translated in year 2010 and 2011, collected from PetroKazakhstan’s records, supports her view. As the bar graph above demonstrates, the total number of documents the secretary translated in 2011 is 15 (about 28.3%) more than those she translated in the previous year. Since the secretary already finds this workload quite difficult to cope with, if the number of documents continues to grow in the same rate, she will most probably be unable to complete not only the translation works, but also her other tasks as a secretary.

In addition to the workload, the secretary also finds the translation of technical or legislative documents especially difficult. Since the secretary’s qualifications are not in these areas, her translations of these documents were probably not adequate enough for both time and quality. A two document increase in technical or legislative per year may not seem a lot, but the extra workload can possibly lead to a stressful working condition. According to Fredrick Herzberg’s theory of motivation, this situation may evolve into a de-motivational factorthat may also decrease the secretary’s efficiency in other tasks, as one of the secretary’s primary “hygiene needs2” of pleasant working condition is not satisfied.

The investigation will evaluate the following two possible solutions to the problem:

1. Recruiting of a new full time in-house translator

or

2. Outsourcing this service to an external business.

Analysis of options

1 Interview with MsAssel, 4th of September, 2012, Appendix IV

2 “aspects of a worker’s job that have the potential to cause dissatisfaction if absent” - Stimpson, Peter, and Alex Smith. Business and Management for the IB Diploma. P. 145. Cambridge University Press, 2011. Print.

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Data Forecasting using Time Series Analysis and Jump Method

In order to compare and contrast the two solutions to the problem, the amount of documents required for translation in 2012 must be predicted to calculate the financial cost of each one. The prediction is made by first employing the Times Series Analysis, a method originally used to forecast a product’s quantitative sales volume based on past sales data. The advantage of this tool is that it can provide the trend of the change in number of documents, which will be used together with the Jump Methodto estimate the documents required for translation in 2012. The disadvantage of this tool lies in the fact the further it is used to forecast the data in the future, the less accurate the results will be,due to the method is completely based on past data.

Data Forecasting: Number of documents in 2012

Year Month Actual documents

12 month moving total

24 month moving total

Trend Seasonal variation

2010 Jan 4

Feb 6

Mar 3

Apr 5

May 3

Jun 4

Jul 4 ≈4.58 -0.58

Aug 10 ≈4.58 5.42

Sep 5 ≈4.42 0.58

Oct 1 ≈4.58 -3.58

Nov 4 ≈4.92 -0.92

Dec 4 53 ≈5.13 -1.13

2011 Jan 7 57 110 5.25 1.75

Feb 3 53 110 ≈5.49 -2.49

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Mar 3 53 106 5.50 -2.50

Apr 9 57 110 ≈5.54 3.46

May 7 61 118 ≈5.63 1.37

Jun 5 62 123 ≈5.63 -0.63

Jul 6 64 126

Aug 13 67 131

Sep 3 65 132

Oct 4 68 133

Nov 3 67 135

Dec 5 68 135

By using Jump Method3, which requires the trend (the “underlying movement of the data in a time series”4) produced by the time series analysis, the predicted number of documents in 2012 from January to Decemberis found5. However, the results do not show the patterns6 of reoccurring “hot months” (when relatively more documents are required for translation, such as August) and “cool months” (when relatively fewer documents are required for translation, such as November). Thus, the data can only be used to calculate the total amount of documents required for translation in 2012 (≈83).

Predicteddocuments for translation

Year Month Number of documents

2011 Jul 5.73

Aug 5.83

Sep 5.96

Oct 6.09

Nov 6.20

Dec 6.30

3Barratt, Michael, and Mottershead, Andy. AS and A Level Business Studies. Pearson Education Ltd, 2000. Print.

4Stimpson, Peter, and Alex Smith. Business and Management for the IB Diploma. Cambridge University Press, 2011. Print.

5See Appendix V for actual calculations

6See Appendix I

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2012 Jan 6.40

Feb 6.48

Mar 6.57

Apr 6.67

May 6.77

Jun 6.87

Jul 6.97

Aug 7.07

Sep 7.17

Oct 7.27

Nov 7.37

Dec 7.47

Total number of documents in 2012 ≈83

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Data Forecasting using Estimated Percentage Increase

Re-calculation of the predicted total numbers of documents in 2012 was made by using estimated percentage increase to verify the accuracy of the results produced by Time Series Analysis and Jump Method. As the parent company continues to shift the responsibility of public relations to PetroKazakhstan, one can expect the growth in documents in 2012 will maintain its rate similar to that of 2011. In the following table, the estimated percentage increases in documents were calculated by using the following formula:

y ≈ x=100 (b−a)

a

After the estimated percentage increase was found, the estimated number of documents required for translation in 2012 can be calculated using the following formula:

z=b (1+ y )

Keys:

a – number of documents required for translation in 2010 b – number of documents required for translation in 2011 x – approximate percentage increase in documents in 2011 y – estimated percentage increase in documents in 2012 z – estimated number of documents required for translation in 2012

Year 2011 Percentage increase (est.)7

2012 (est.)

Overall

Total number of non-technical or legislative documents translated

49 ≈36.1% ≈67

Total number of technical or legislative documents translated

19 ≈11.8% ≈21

Total number of documents translated

68 ≈28.3% ≈88*

7For detailed calculation see Appendix II

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*The estimated total number of documents required for translation in 2012 using estimated percentage increase is 5 (≈6.02%) more than the amount found by using Time Series Analysis and Jump Method.

Financial calculations of the two options:

The financial comparison of the two options (whether to outsource the translation service or recruit a new in-house translator) can be done by calculating the price PetroKazakhstan will pay for the translation of each document. The amount of translation tasks was based on the predicted number of documents required for translation in 2012 found using estimated percentage increase rather than the number found using Time Series Analysis and Jump Method. This is because the company can be more readily prepared for a high rise in the amount of documents required for translation. Currency in the calculations was converted to Kazakh Tenge by using the exchange rate given by exchangerates.org.uk.

Outsourcing translation service Recruiting a full time in-house translator

Formula used: P=k ×t=d ×e× t Formula used: P=w×12z

Keys: P – price for translation paid per document in KZT d – price of translation service per hour in USD (120

USD/hr)8

e – exchange rate (1 USD ≈ 149 KZT)9

k – price of translation service per hour in KZT t – time in hour

Keys: P – price for translation paid per document in KZT w – wage of translator per month10

z – estimated number of documents required for translation in 2012

Calculations: For minimum time (hr.) used per document11

Calculations: P=92000×1288

¿ 110400088

≈13301KZT

P=120×149×0.75¿17880×0.75¿13410KZT

For maximum time (hr.) used per document12

P=120×149×1.50¿17880×1.50¿26820KZT

Price for translation paid per document13410 ~ 26820 KZT 13301 KZT

8Advantour. Translation service in Kazakhstan. Web. 12 September, 2012 <http://www.advantour.com/kazakhstan/translation.htm>

9Exchange Rates. USD to KZT exchange history. Web. 3 September, 2012 <http://www.exchangerates.org.uk/USD-KZT-exchange-rate-history.html>

10the wage of translator per month (92000 KZT) was given by PetroKazakhstan’s Almaty Division

11 predicted using the secretary’s experience (see Appendix IV)

12 predicted using the secretary’s experience (see Appendix IV)

http://www.exchangerates.org.uk/USD-KZT-exchange-rate-history.html


http://www.advantour.com/kazakhstan/translation.htm

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Evaluation

Both options to the problem of secretary’s workload, outsourcing the translation service and recruiting a new full time in-house translator, have got benefits and drawbacks. On the first glance, the latter option is clearly more advantageous for PetroKazakhstan financially, as the price for translation paid per document is less than both prices the company has to pay if it outsources the translation service, no matter the documents will require short or long time for translation. The financial advantage of recruiting a full time in-house translator will be even more clearly shown if PetroKazkhstan receives more than 88 documents for translation in 2012, because the price per document will continue to fall as the amount of document increases. On the other hand, the price for outsourcing the translation service will maintain the same.

However, there is a weakness in this financial comparison. Because the calculation for the option of outsourcing the translation service is based on the secretary’s experiences in translation the documents, the final results may not be very accurate. The professional translators in the potential translation company for the outsourcing option may translate the documents with a faster speed than the secretary. Therefore, the price for translation paid per document in real life can be much less than in this investigation’s calculations, possibly even be similar to the price for the option of recruiting a full time in-house translator. Thus under these circumstances, it became more important to compare the non-financial advantages and disadvantages of the two options.

An advantage of outsourcing the translation service is that PetroKazakhstan will have more freedom in selecting who will be translating the documents. If PetroKazakhstan is not satisfied with the quality of translated documents of one company, it can easily switch to another translation service agency, whereas it will be much harder and take longer time for PetroKazakhstan to find a new in-house translator to replace old one. Nevertheless, this advantage is not equivalent to an in-house translator’s flexibility in daily business activities. The full time in-house translator not only can translate documents, but he/she can also serve as an oral translator during conferences, meetings and daily communications between the employer and employees of PetroKazakhstan. This advantage is very useful, as the company won’t be need pay for the cost of another oral translator, which it might be necessary if the company chooses to outsource the translation serve. However, there may be a disadvantage of this option: although the secretary acknowledges the fact she cannot deal with the increasing workload, she might still see the new translator as a rival who took the responsibility away from her. The jealousy can lead to vicious competition between the two employees and cause frictions inside the company. This is a potential threat that PetroKazakhstan’s interpersonal roles should be prepared to solve.

Based on the financial advantage shown by the calculations made in this investigation and the efficacy of an in-house translator’sflexibility, it will be more favorable for PetroKazakhstan to choose the option of recruiting a full time translator.

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Conclusion and recommendations

In conclusion, this investigation had fully addressed to the objectives made in the introduction. The impact of the stressful working condition had been identified as a lack of basic “hygiene need” using Fredrick Herzberg’s theory. By using Time Series Analysis and Jump Method and calculation of estimated percentage increase, a 15~20 documents requiring for translation increase in the year 2012 should be expected. The financial cost of the two options, measured in price for translation paid per document, had been calculated. For the outsourcing option the price is around 13410 ~ 26820 KZTper document, whereas for the recruiting option the price is 13301 KZT per document. Judging from the advantages and disadvantages of the two options, the final recommendation to PetroKazakhstan will be recruiting a full time in-house translator to alleviate the secretary’s overload of tasks. By undertaking this solution, PetroKazakhstan will most likely to gain the following benefits:

1. An increase of productivity in the secretary’s workBecause the translation tasks will be given to the new translator, the secretary can focus solely on her responsibilities, such as “organizing documents and memorandum of business conferences, arranging the timetable for the director’s meetings, ordering plane tickets for the employees’ business trip”13. The reduced stress levels can motivate the secretary to complete her tasks with higher quality and faster speed.

2. A higher quality of translated documentsBy recruiting a professional who was trained to translate technical and legislative documents, the message of such documents can be more accurately conveyed and easier to understand.

3. A better understanding between the employers and employeesThere is a chance of the new translator may have a relatively large amount of spare time due to his/her ability may exceed the amount of documents required for translation (the average speed of a professional translator is around 2000 wards per day, whereas the non-legislative or technical documents are usually around 500 to 800 words)14. However, this disadvantage can be counterweighed by the flexibility of an in-house translator.This benefitgives the possibility of not only translating documents, but also oral translation during conferences and meetings as well as daily communications between the employer and employees of PetroKazakhstan.

Next time, when investigating a similar case, some additional factors should be considered in order to improve the quality and reliability of the analysis:

1. During the research process only one outsourcing of translation service was considered. This neglects the possibility of other existing translation services that might have a cheaper price of a higher translation quality. It will be beneficial to consider more than one choice next time.

2. In Appendix I a trend of documents required translation can be noticed. There are months that constantly have a higher amount of documents than others. Next time, the possibility of

13See Appendix IV

14PROZ. What is the realistic translation speed. Web. 8 February, 2013 <http://www.proz.com/forum/getting_established/40966-what_is_the_realistic_translation_speed.html>

http://www.proz.com/forum/getting_established/40966-what_is_the_realistic_translation_speed.html

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outsourcing the translation during such months and keep the secretary to translate the documents in less busy months should be considered and analyzed.

Bibliography:

Barratt, Michael, and Mottershead, Andy. AS and A Level Business Studies. Pearson Education Ltd, 2000. Print.

Stimpson, Peter, and Alex Smith. Business and Management for the IB Diploma. Cambridge University Press, 2011. Print.

Advantour. Translation service in Kazakhstan. Web. 12 September, 2012 <http://www.advantour.com/kazakhstan/translation.htm>

Exchange Rates. USD to KZT exchange history. Web. 3 September, 2012 <http://www.exchangerates.org.uk/USD-KZT-exchange-rate-history.html>

PROZ. What is the realistic translation speed. Web. 8 February, 2013 <http://www.proz.com/forum/getting_established/40966-what_is_the_realistic_translation_speed.html>

http://www.proz.com/forum/getting_established/40966-what_is_the_realistic_translation_speed.html


http://www.advantour.com/kazakhstan/translation.htm

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Appendices

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Appendix I:

Month Jan

Feb Mar

Apr May Jun Jul Aug

Sept Oct

Nov Dec Total

Number of documents translated in 2010

Chinese to Russian

Non-technical or legislative

1 3 0 2 1 1 3 3 1 0 1 1 17

Technical or legislative 0 1 1 1 0 2 0 1 2 0 0 1 9

Total 1 4 1 3 1 3 3 4 3 0 1 2 26

Russian to Chinese

Non-technical or legistlative

3 2 1 2 1 1 0 3 2 0 2 2 19


Total 3 2 2 2 2 1 1 6 2 1 3 2 27

Number of documents translated in 2011

Chinese to Russian

Non-technical or legislative

2 2 1 3 3 2 4 4 2 1 0 2 26


Total 3 2 2 5 3 3 4 6 2 2 1 3 36

Russian to Chinese

Non-technical or legistlative

2 1 1 4 3 2 1 4 1 1 2 1 23


Total 4 1 1 4 4 2 2 7 1 2 2 2 32

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Appendix II:

Year 2010 2011 Percentage increase

Chinese to Russian


17 26 ≈52.9%


9 10 ≈11.1%


26 36 ≈38.5%

Russian to Chinese


19 23 ≈21.1%


8 9 12.5%


27 32 ≈18.5%

Overall


36 49 ≈36.1%


17 19 ≈11.8%


53 68 ≈28.3%

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Appendix III:

Graph 1: Number of Documents Translated from Chinese to Russian

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Graph 2: Number of Documents Translated from Russian to Chinese

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Graph 3: Total Number of Documents Translated

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Appendix IV:

Interview with Ms. Assel, the secretary of PetroKazakhstan, Astana subsection on 11th of September, 2012:

I – interviewer, S – secretary:

I: Hello, would you please briefly describe your job?

S: My main tasks are organizing documents and memorandum of business conferences, arranging the timetable for the director’s meetings, ordering plane tickets for the employees’ business trip and translation of documents. The latter I find quite difficult for completion.

I: Why do you find translation of documents is difficult for you?

S: The problem is the increasing amount of documents. Since PetroKazakhstan is developing rapidly, our subsection in Astana, which focuses on public relations, has to solve a lot more issues between our company and government and other companies. Because the majority of the leadership team is consisted of Chinese people who only speak Chinese and some English, many more contracts and change in laws need to be translated from Russian to Chinese so they can understand. At the same time, their replies and decisions must be translated back into Russian so our partners can understand. Therefore, the workload grows significantly.

I: So is it only the amount of work hard to deal with?

S: Well, not exactly. Even though the number of documents I need to translate is increasing, the main difficulty I am facing is the technical and legislative documents such as reports on gas and petroleum extraction. I did not major oil industry during my higher education, so I had to find the meanings of many technical words. This takes relatively a long time, which began to affect other tasks I am responsible for.

I: How much time for translation do you spent on each document on average?

S: It depends. For non-technical or legislative documents like letters and memorandum of meetings it usually takes only about 45 minutes to 1 hour 30 minutes. However, the technical and legislative papers require much longer time, about 5 to 6 hours each. Once I remember it took me nearly two full working days to translate a report about the purpose and use of buying a special drilling instrument.

Appendix V:

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Calculation of number of total documents in 2012 using jump method

Jul 2011

Gap = (5.63 – 4.58)/11 ≈ 0.10

5.63 + 0.10 = 5.73

Aug 2011

Gap = (5.73 – 4.58)/11 ≈ 0.10

5.73 + 0.10 = 5.83

Sep 2011

Gap = (5.83 – 4.42)/11 ≈ 0.13

5.83 + 0.13 = 5.96

Oct 2011

Gap = (5.96 – 4.58)/11 ≈ 0.13

5.96 + 0.13 = 6.09

Nov 2011

Gap = (6.09 – 4.92)/11 ≈ 0.11

6.09 + 0.11 = 6.20

Dec 2011

Gap = (6.20 – 5.13)/11 ≈ 0.10

6.20 + 0.10 = 6.30

Jan 2012

Gap = (6.30 – 5.25)/11 ≈ 0.10

6.30 + 0.10 = 6. 40

Feb 2012

Gap = (6.40 – 5.49)/11 ≈ 0.08

6.40 + 0.08 = 6.48

Mar 2012

Gap = (6.48 – 5.50)/11 ≈ 0.09

6.48 + 0.09 = 6.57

Apr 2012

Gap = (6.57 – 5.54)/11 ≈ 0.10

6.57 + 0.10 = 6.67

May 2012

Gap = (6.67 – 5.63)/11 ≈ 0.10

6.67 + 0.10 = 6.77

Jun 2012

Gap = (6.77 – 5.63)/11 ≈ 0.10

6.77 + 0.10 = 6.87

Jul 2012

Gap = (6.87 – 5.73)/11 ≈ 0.10

6.87 + 0.10 = 6.97

Aug 2012

Gap = (6.97 – 5.83)/11 ≈ 0.10

6.97 + 0.10 = 7.07

Sep 2012

Gap = (7.07 – 5.96)/11 ≈ 0.10

7.07 + 0.10 = 7.17

Oct 2012

Gap = (7.17 – 6.09)/11 ≈ 0.10

7.17 + 0.10 = 7.27

Nov 2012

Gap = (7.27 – 6.20)/11 ≈ 0.10

7.27 + 0.10 = 7.37

Dec 2012

Gap = (7.37– 6.30)/11 ≈ 0.10

7.37 + 0.10 = 7.47