This website uses cookies to ensure you have the best experience. Learn more

Review The Pros And Cons Of Outsourcing

3274 words - 14 pages

Using the example of one or more types of outsourcing (IT, HR, etc) review the pros and cons of outsourcing and examine its implications for future firm strategic direction.

Outsourcing has become an increasingly popular strategic tool for worldwide organizations. Due to two key phenomena such as technological advances and globalisation, most organizations have be forced to continuously produce goods and services in higher qualities and lower prices. Since the benefits of outsourcing were revealed, it has become an increasingly widespread strategic tool among organizations. A survey reports that up to 90 percent of Australian employers had out sourcing at least one activity ...view middle of the document...

Motivations for Outsourcing
Based on a literatures review, there are several reasons for organizations to pursue outsourcing services; they can be classified into at least five primary reasons:

Access to specialized expertise
When the organization decides that an vendor can perform the assignment better than the internal department, the motivation to outsource the activity is high (Davidson, 2005). For example, small-sized firms, in particular, might not have sufficient resources and time to develop specialists who are fully informed about the legal requirements of HR programs; they may outsource all of their retirement-related programs. At the same time, they can also reduce their legal liability or level of risk (Charles, Stuart & David, 1999). Organizations may outsource in some unusual circumstances, such as during a strike or a natural tragedy or to coordinate a major task, the demands of which exceed the capacity of in-house HR departments (Conklin, 2005).

Access to technology
Advanced technology has been another motive for outsourcing. Due to organizations want to improve technical service in lower cost, yet not find technical talent in-house, external provider may provide an access to handle or answer employee inquiries in shorter transaction time (Belcourt, 2006).
Cost reduction
Despite the fact that some vendors may not provide the specialised knowledge or technology that the business may desire, they may provide their services at lower costs than in-house operations. That may be an effective selling point. Nowadays, most organizations are eager to cut costs; this serves as the most an eye-catching point for them (Davidson, 2005).

Market discipline
When the organization determines that the service provided by the internal or external supplier has failed to maintain its commitment or is inefficient, then the organization may invite a new supplier to compete with the existing supplier to provide the service for the same operation; or the organization may refuse to renew the contract. This institutes a process, market discipline, that guarantees that the supplier is providing the price and quality that aligns with what the current market demands (Hill, et al., 2007:205).

Organizational development and strategic focus
Other proponents point out that outsourcing could help to alter the traditional way in which business owners think so as to enhance the ability of the organization to learn the latest operation method in order to produce new capabilities or more resources to pull into the core-area or at least to maintain its competitiveness. Besides, outsourcing some HR functions, for example, non-strategic routine administrative tasks, can save time for in-house HR expertises, and allow that department to move toward a strategic role (Stone, 2005: 61).

Advantages of Outsourcing
Human resources outsourcing (HRO) is one of the fastest-growing industries, and it keeps expanding, globally. To...

Other Papers Like Review The Pros And Cons Of Outsourcing

Prons And Cons Of Interactive Teaching

2092 words - 9 pages Expenses Budget 5.4) Control MARKETING PLAN FOR THE TRANSFORMATION OF MAIZE BY MARIA Co Ltd 1.0) GENERALITIES: Definition of Terms MARKETING PLAN Marketing Planning is a structure way of looking at the relationship between what an organisation has to" offer" and what the market need. It is therefore necessary to follow-up marketing options of an entire organisation(strategic planning) with many products or business units or it can be used to

The Review Of The Goal

1230 words - 5 pages The Goal was the first manufacturing management book I read in English. There is no theoretical framework in the book, so it is both interesting and easy to understand. This book was written by Eliyahu M. Goldratt and Jeff Cox, tells a fictional story about Alex Rogo, a manufacturing plant manager who struggled with situation that his plant faced with losses and shut, with the help of Jonah and through the efforts of the team, Rogo finally found

Cpa Review School Of The Philippines

349 words - 2 pages CPA REVIEW SCHOOL OF THE PHILIPPINESManilaMANAGEMENT ADVISORY SERVICESACTIVITY-BASED COSTINGTHEORY 1.An accounting system that collects financial and operating data on the basis of the underlyingnature and extent of the cost drivers isa.Direct costing.c.Cycle-time costing. b.Activity-based costing.d.Variable costing.2.The resource utilized by a given product divided by the total amount of the resource availableis called thea.Activity

The Story Of Stuff: A Review

854 words - 4 pages The Story of Stuff: A Review The Story of Stuff is a 20-minute film aimed at raising awareness on the dangers of excessive human consumption. Presented by Annie Leonard – an activist for consumerism and environmental sustainability (Story Of Stuff Project, 2013) – this video provides a simple yet well researched explanation on the ‘behind-the-scenes’ management of the life-cycle of common items consumed daily in the United States. From mining

A Review Of “The Financial Crisis...” By John B. Taylor

454 words - 2 pages GF500: A Review of “The Financial Crisis...” by John B. Taylor Perry Shipp Kaplan University GF500: A Review of “The Financial Crisis...” by John B. Taylor John B. Taylor is a long-time economist and professor of economics at Stanford University. In his article, “The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong,” he explains what caused, prolonged, and worsened the 2008-09 U.S. financial crisis

1. Perform A Quantitative Insourcing/Outsourcing Analysis Using The Data Provided. What Qualitative Issues Might Affect Your Final Decision? Identify Any Costs Or Issues That Are Not Part Of Your...

4548 words - 19 pages process. A single functional group usually does not have the data, insight, or knowledge required to make effective strategic insourcing/outsourcing decisions. FLEX-CON'S INSOURCING/OUTSOURCING OF PISTONS FlexCon, a $3 billion maker of small industrial engines, is undergoing a major internal review to decide where the company should focus its product development efforts and strategic investment. Executive management is arguing that too

The Alien And Sedition Acts Of 1978

316 words - 2 pages Name Tutor Course Date The Alien and Sedition Acts of 1978 Q.1 The alien and sedition acts of 1978 outlawed any person from writing or assisting other persons in writing false or malicious information about the government of the United States. There were three justifications for this law. First, it was passed because writing, assisting persons to write and publish malicious information could defame the government and thereby harm its

The Role And Functions Of Law

911 words - 4 pages The Role and Functions of Law Since the beginning of recorded history, laws have played a significant role in the way society has chosen to govern itself. From Jewish and Roman law in biblical days to the constitution-bound laws of modern democracies, law has established rights and responsibilities for individual citizens and businesses that reflect the accepted ethics of society. Law is a “body of rules of actions or conducts prescribed by a

The Role And Function Of Law

734 words - 3 pages Role and Function of Law Understanding the role and function that law plays in business and society is a large undertaking. There are many facets that help define, shape and regulate the current commercial and social environment. Focusing on key objectives and a general intent, the landscape can be less daunting. Fundamentally, law establishes a common protection of interest and uniformity in which individuals, society and businesses can

Cheaters And The Hall Of Fame

1295 words - 6 pages Cheaters and the Hall of Fame Geoffrey Barndt COM/170 April 7, 2014 Dr. Hancock Cheaters and the Hall of Fame Should there be a difference in punishment between the use of performance enhancing drugs and gambling in the sport of baseball. In baseballs long and great history there has been two scandals that have given baseball a black eye. One being the story of Pete Rose, and the other being the story of Barry Bonds.” After a Hall

Tracking The Intersection Of Culture And Media

264 words - 2 pages Tracking the Intersection of Culture and Media – by Drake Johnson Music is a very popular form of media that is used on a very large scale and surrounds us consistently in our daily lives. It is such a popular form of media and will more than likely be around for a very long time. Music is used for many things such as television programs, movies, radio, events, and even played in elevators and offices. It provokes and manipulates

Related Essays

What Are The Pros And Cons Of Raising A Child Bilingually?

294 words - 2 pages What are the pros and cons of raising a child bilingually? The Advantages: Children raised in more than one language are able to master both languages just as well as a child raised in one language. Children in multilingual environments are possessed with a greater feel for languages and at the same time, understand that language is a tool for the purpose of communication. Children raised bilingually have greater facility in

Gun Control: Pros And Cons Essay

1986 words - 8 pages Firearms and Federal Law: The Gun Control Act Of 1968, the Gun Control Act is designed to "provide support to Federal, State, and local law enforcement officials in their fight against crime and violence." (Journal of Legal Studies). Firearm is an epochal invention. But unfortunately, no matter in the past or now, guns and firearms are often misused. Therefore, gun control policy exists. In fact, the gun control policy leads both pros and cons

Reality Tv Pros And Cons Essay

4013 words - 17 pages positive effects these programs have on society as a whole. We will also examine the steps marketers can do to take advantage of the high ratings of these reality shows to reach a larger audience of consumers. It is safe to assume that there are both negative and positive aspects of reality television. Do the cons outweigh the pros or vice versa? In our opinion there is much more negativity in reality shows in modern day entertainment than there are

The Pros And Cons In Chilean Pension System

361 words - 2 pages % of their salary for their retirement payment and 3% for the disabilities. So the balance of their salary is much higher. The cons 1 funds must be highly regulated 2 more types of funds to invest give them more risk It is easy to know that if they invest in higher rate of return, and the degree/level of risk is much higher, some low wages workers would choose high return funds to generate more money back but they don’t take into