Preview

The Advantages and Disadvantages of Outsourcing

Better Essays
Open Document
Open Document
1433 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Advantages and Disadvantages of Outsourcing
What are the advantages and disadvantages to outsourcing in the global marketplace?

In these times of great globalization where many countries have erased their borders when it comes to trade outsourcing has become an option for many companies. Whether or not to outsource is a key question that companies must consider. According to the Pros and Cons of Outsourcing, “The decision to outsource or not is a matter of finding the right balance-the balance between managing labor costs, workflow, employee capabilities, customer commitments, core competencies, and even short- and long-term risks.” (Motley-Saunders, p.1) There are many advantages and disadvantages to outsourcing. These advantages and disadvantages will be discussed in this paper. There are many advantages of outsourcing. Many companies like to outsource because they cannot afford to hire people with the expertise to do it internally. Therefore outsourcing can help reduce cost because the company doesn’t have to increase their payroll because they can spend less by outsourcing certain contracts. Looking from a business standpoint, all companies want what is the best for the company and therefore expertise is needed and sometimes a company may have to get expert help by outsourcing. With increased competition in our global economy, outsourcing will help companies by giving them a chance to focus on other driving factors that will increase the company’s performance. Outsourcing offers a different perspective other than that of the company’s. This will help the company by ensuring that there will not be any bias or favoritism because the company that handles the outsourcing is an external company and therefore hold no bias. This will ensure more effective decision making since the outsourcing company can perform its duties without any personal preference or bias. Another perspective can also open the door to many new ideas. Outsourcing will enable the company to save money because with



References: Saunders-Motley, Christina. (July, 2006). The pros and cons of outsourcing. Office Solutions, (Vol 23, Issue 4), p. 36, 2 pgs. Retrieved March 20, 2008 from Business Source Premier (http://ezproxy.umuc.edu/login?url=http://proquest.umi.com.ezproxy.umuc.edu/pqdweb?did=1088128581&Fmt=7&clientId=8724&RQT=309&VName=PQD). Bugh, John. (July,2006). Outsourcing risks and rewards. Customer Inter@ction Solutions, (Vol 25, Issue 2), p. 40-42. Retrieved March 20, 2008 from Business Source Premier (http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=21815907&site=ehost-live&scope=site). Masi, Charlie. (December, 2006). Pros and cons of global outsourcing. Control Engineering (Vol. 53 Issue 12), p14-16, 2p. Retrieved March 20, 2008 from Business Source Premier (http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=23796721&site=ehost-live&scope=site).

You May Also Find These Documents Helpful

  • Powerful Essays

    Tegan Hrad Write Up

    • 3041 Words
    • 13 Pages

    Outsourcing has seemed to acquire a rise in popularity and usage in our modern times. Outsourcing involves entering into a contract in which an in-house company process, or processes, is ultimately handed over and dealt with from a third party’s perspective. I would have to say that there are three primary, helpful factors to outsourcing, especially when it comes to the world of business. To start off, the cost of operations can be trimmed down through outsourcing. This, in turn, would assist a corporation or business in accumulating more lucrativeness. Secondly, every organization out there has the intention of delivering top-of-the-line services and goods. Outsourcing can contribute to more efficient deliveries. Specifically concerning information technology or something that would be considered to be a bit more technical, outsourcing can bolster efficiency within that particular field of a technical nature. Thus, productivity would be improved through outsourcing. Thirdly and lastly, within a set interval of time, an establishment has the ability through outsourcing to complete projects promptly. This is due to the fact that while a third party is handling a certain progression of a certain company, that individual company can now use its human capital and employees – that may originally were going to have to deal with a peculiar development stage of a certain project which has now been outsourced – in other, more beneficial ways. More labor can be put into other areas.…

    • 3041 Words
    • 13 Pages
    Powerful Essays
  • Better Essays

    The pros and cons of outsourcing varies by industry, size of organization, organizational structure, and many other components. The pros and cons are highlighted and the fall of Satyam to encompass a full range of accounting aspects. All size organizations outsource a portion of his or her business. Therefore, taking time to reflect on the points identified in this paper may enlighten or create ideas for consideration regarding outsourcing.…

    • 2422 Words
    • 10 Pages
    Better Essays
  • Satisfactory Essays

    As it is stated in our book, outsourcing contributes to enhancing competitive business advantage as it allows organizations to remain focused on their core strategic activities. Instead of spending a lot of company’s money on learning, developing and producing some of the parts or whole products in the United States, organizations have a great opportunity to outsource it and concentrate on something what they are good at. They would not have to devote their time to all these elements of production, and instead they could work on their other important issues.…

    • 365 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Lego Final

    • 1719 Words
    • 5 Pages

    Outsourcing is not a good strategy in the following situations: The risk to expose confidential data is high such as outsourcing HR, payroll and recruitment services. Risk of exposing intellectual property increases which…

    • 1719 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Paul Keating

    • 487 Words
    • 2 Pages

    Paul Keating’s commemoration speech at the funeral of the Unknown Soldier carefully utilises rhetoric technique to persuade the greater part of Australia to reflect on the great sacrifice made by those who served our nation. The epideictic format and inclusive language engages the audience, whilst anonymity of the unknown solider establishes curiosity, capturing pathos both within the speaker and the audience.…

    • 487 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Outsourcing has many benefits, but just as many downfalls too. One the available benefits is the fact that could be many comparable systems on the market that meets the needs of the company. Another positive would be that others have are to use the system and that the issues which could arise already have a solution. Though if an issue would arise, the third-party company would have support or maintenance team available.…

    • 694 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Outsourcing is the contracting out of an internal business process to a third party organization. The term "outsourcing" became popular in the United States near the turn of the 21st century.(6) Outsourcing is big business today even for small businesses. Like every business decision we are faced with the advantages as well as the disadvantages of relocating part or all of a business. Outsourcing is one of the fastest growing trends in business as large-scale organizations have latched onto outsourcing due to the almost immediate savings and quality improvement. (1)…

    • 1004 Words
    • 5 Pages
    Better Essays
  • Good Essays

    With outsourcing comes many pros, or advantages. Outsourcing is very popular in our country and internationally. It helps businesses focus on their priorities or their main functions instead of secondary tasks. For example, if a company was good in handling finances, it would be hired to handle only the finances. Outsourcing also reduces expenses by finding certain industries purposes in areas where important costs are cheaper. If you noticed, many of our clothes or shoes are made in China. This is an example of outsourcing but it is a certain type…

    • 625 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Ups Business Plan

    • 6591 Words
    • 27 Pages

    In today globalise fast paced economy; many companies do not have the internal resources necessary to hire the top talents needed to succeed in the marketplace. With the constant pressure to reduce costs and focus on core competencies, many companies are replying on outsource providers.…

    • 6591 Words
    • 27 Pages
    Good Essays
  • Good Essays

    Is Outsourcing Good

    • 693 Words
    • 3 Pages

    Outsourcing is an attractive mechanism that has been practice for long time and some companies have had positive results. However outsourcing is not a magical path that leads to a profitable and successful business all the time. There are a lot of risks inherent to this practice and any company willing to outsource should evaluate these risks responsibly.…

    • 693 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Most people believe that outsourcing is a good idea but you must be aware of the negatives of outsourcing. Most people haven't realized that outsourcing has forced jobs out of the country because it may be cheaper to get the job done elsewhere. This has caused the availability of local jobs to decline. Globalization has also brought over many large businesses that are able to sell…

    • 368 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Many corporations are experiencing significant cost savings by outsourcing work to developing countries across the globe. Some advantages of global outsourcing are: technically skilled, inexpensive labor;…

    • 3249 Words
    • 13 Pages
    Powerful Essays
  • Good Essays

    The outsourcing trend has become a concerning, and debated topic in American politics and economics. The main outsourcing purpose is cutting production cost by transferring U.S jobs to lower paid foreign workers. Some views outsourcing as the way company‘s completeness, others see this as negative effect due to losing jobs. As a student of College Management who major in Business and also minor in Economic, I strongly believe that outsourcing is damaging America‘s economy.…

    • 445 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Outsourcing

    • 476 Words
    • 2 Pages

    Now more companies are seeking strategic advantages based on outsource alliances. While the relentless push to operate more efficiently remains the driving force behind outsourcing, it has also become a competitive, strategic marketplace tool, allowing companies to improve response times and develop new products faster than ever. Once focused just on reducing expenses, today’s outsourcing initiatives are likely to help companies do things they previously could not do.…

    • 476 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Climate of Trust

    • 547 Words
    • 3 Pages

    Kouzes, J., & Posner, B. (1999). Innovative leader. 8, 385. Retrieved from Innovative Leader Volume 8, Number 2…

    • 547 Words
    • 3 Pages
    Satisfactory Essays