...as they respond to challenges in their environment. These resources can be developed in-house or developed among strategic partners or purchased. Outsourcing entails the delegation of tasks or jobs from internal production to an external entity such as sub-contractor. It is the process of placing the development of system components in another development organization with the aim of achieving cost reduction and a gain in terms of production capacity and development. The main striking features of the Nigerian economy today is that available infrastructures of all types fall far below the quantities and qualities required. This naturally results in overstretching of most facilities. Despite huge potentials in almost every sector, poor overall economic performances have made it inevitable to tap unduly and at high cost and less profit than they should be. According to Alaofin (2003), “operating costs are high in Nigeria inspite of relatively cheap labour hence, running any business according to international standards is therefore costly”. He further stated that facilities management as an area is just evolving in Nigeria through janitorial services which is the best development component, has been around for nearly (5) five decades. Security services are in the stage of development. He stated that there are various merits of outsourcing which include better focus, economics of scale in purchasing and specialization. Dalhat(2009) in analyzing the development of a service industry...
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...PAGE DECLARATION ABSTRACT This paper examines how outsourcing affects a business positively and/or negatively. During this paper I will discuss the advantages and disadvantages of outsourcing. There are many reasons why a company may choose to outsource a particular function of their business. The end result in mind is saving time and/or money. Before a company considers outsourcing it should first do a competitive analysis of its company before initiating an outsourcing analysis. The company should also consider the advantages and disadvantages of outsourcing. The advantages are the following: reduction in critical resources, provides ability to focus on core business, yields cost savings, provides flexibility, reduction overhead costs, etc. The disadvantages are as follows: loss of managerial control, hidden costs, threat to security and confidentiality, quality problems, tied to financial well-being of another company and bad publicity and ill-will. Outsourcing is the strategic use of outside resources to perform activities that are usually handled by internal staff and resources. By using a well-managed outsourcing agreement, companies can gain in markets that would otherwise be uneconomical. This study was designed to explore why companies are undertaking outsourcing projects and identifies factors that may facilitate or impede outsourcing projects. In addition, this article examines the relationships between outsourcing strategies and organizational performance. The results...
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...PRACTICES AND PROCEDURAL DIFFERENCES BETWEEN PRIVATE AND PUBLIC SECTOR PROCUREMENT 1. Regulation by law in public sector while in private practices and procedures are governed by internal policies of the entity 2. Procedures are bureaucratic and lengthy in public sector while in private sector lead times are short 3. Competitive bidding distinctively practiced in public sector, in private sector any other sourcing method other than competitive bidding can be applied 4. Public funds are used to meet public sector activities in private sector funds from shareholders are used 5. In public sector unfairly treated bidders are assisted by an appeals board, in private sector aggrieved bidders have no recourse 6. Public procurement is geared towards provision of quality and efficient services, in private sector procurement is geared towards increasing rate of return 7. In public sector supply chain management is more theoretical than practical, in private sector it is practiced 8. In public sector the procurement systems are more manual, unlike in private sector where in most case systems are automated 9.In public sector there are various committees created for the purpose of ensuring transparency and accountability in the process, while in private sector one or very few committees exist. 10. Professional qualifications and membership is highly emphasized while in private less emphasized 11. Negotiation in public sector is limited to 2 committees; in private sector negotiation...
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...Wal-Mart vs Whole Foods: The Battle Over Organic Pricing By Daniel Kline | April 12, 2014 | Wal-Mart (NYSE: WMT ) has announced plans to carry the Wild Oats brand of organic groceries and promises to reduce customer cost by at least 25%. That move directly targets Whole Foods (NASDAQ: WFM ) and The Fresh Market (NASDAQ: TFM ) , which have built their businesses around selling higher-priced organic groceries. The Wild Oats line, which dates back to 1987, relaunches at Wal-Mart later this month with what a press release describes as "a new, more affordable price point on quality products covering a broad variety of categories – from salsa and pasta sauce to quinoa and chicken broth." The company promised that its prices will be 25% or more lower in comparison to national brand organic products, a claim the company bases on item price comparisons (per ounce) of 26 nationally branded organic products available at Wal-Mart stores that was conducted earlier this month. "We know our customers are interested in purchasing organic products and, traditionally, those customers have had to pay more," said Jack Sinclair, executive vice president of grocery at Wal-Mart U.S. "We are changing that and creating a new price position for organic groceries that increases access. This is part of our ongoing effort to use our scale to deliver quality, affordable groceries to our customers." If Wal-Mart has anything, it's the scale required to force down prices. With over 4,000 stores...
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...Effects of Outsourcing Name Institution Effects of Outsourcing Abstract Outsourcing is the practice of assigning a firm's business progressions to an outside agency for the purpose of improving service quality, driving innovation, or developing benefits of lower labour costs (Burkholder. 2006). Intercontinental outsourcing occasionally known as offshoring is a significant facet of economic globalization. Since outsourcing hints to more specialization, it is anticipated to reduce production expenses and to raise productivity. This study uses micro data on American firms to investigate the effects of international and domestic outsourcing on the economy at large, jobs, the production quality and the its ethnic view in the United States. It is based on a unique survey on outsourcing covering the period 2001 to 2013 over a decade of study. The survey allows one to distinguish between domestic and international outsourcing and between outsourcing of core and support activities. This article will highlight the changes that have been observed since the initiation of the outsourcing practise to its impact on the areas of study in sub-topics. Introduction The conflict has been going on from at least the 1880s, when the first New England textile mills initiated moving its manufacturing process to the Carolinas. Whatever name it goes by be it runaway plants, outsourcing, global sourcing, offshoring workers and the public tends to have mixed fillings towards it, executives view it as...
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...outsource their manufacturing needs. Great motivation towards outsourcing is directly linked to the cost advantages that such a factor will provide. The cost advantages, as well as quality measures of continued in-house production or outsourcing is determined by the best interest of the company. This paper examines causes and after effects of outsourcing manufacturing activities. Firms that have made a reputation of producing products in-house often consider cost reducing manufacturing firms in terms of outsourcing projects. Often when companies choose to move forward in outsourcing a manufacturing need, they too have to consider how this will affect the quantity and wellbeing of its employees. Closing a plant and/or deciding whether to offer any severance packages or job placement aid for the soon to be displaced employees need be of high priority. Background Why Companies are Outsourcing their Production Needs Outsourcing has become an increasing trend amongst many manufacturing companies searching for advantages over their competition. Steadily looking for ways to offer the lowest possible prices to the price demands of their customers, is the motivation behind the search. The American company population found outsourcing was a viable option twenty years ago and to this date it still reigns. Outsourcing however to other countries has since had a bandwagon effect, where not every company model requires to outsourcing but simply because their competitors are doing so. Companies...
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...September 2, 2012 Part One (Theoretical Framework) What are the effects of human resources outsourcing on leadership performance and employee commitment? This is a question facing every business. Although this is not a new topic of discussion there are still questions about its true effect on leadership performance and employee commitment. Outsourcing different jobs throughout a business’s many departments has been a common practice since the 1970’s. (Pence, 2010). At first the most common job/task that was outsourced was the company’s payroll but over the last decade more and more businesses are finding it more economical to outsource the majority of the jobs/tasks performed in a human resource department. (Nash, n.d.). In the following report we will discuss the variables and identify if they are dependent, independent, mediating, or moderating. The first variables needing to be discussed are the dependent or criterion variables. In this study they would be leadership performance and employee commitment. Leadership performance is always going to be present whether it is good or bad. The same can be said about employee commitment. These two variables may be influenced by other factors as to which end of the scale they will be located, but they will always be present. The second variable that needs to be discussed is the independent or predictor variable. (Bazerman, 2009). In this situation the outsourcing of human resources jobs/tasks would be considered this type...
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...Advantages and Disadvantages of Outsourcing for Outsourced Employee Iman Nuraprianto GLS 470 – 12TW1 Jennifer Zoller Southern New Hampshire University December 8, 2012 Abstract Outsourcing is contracting with an outside party (vendor) to do a particular function. Basically, the function being outsourced is considered non-core to the business. This paper explores the advantages and disadvantages of outsourcing for outsourced employee. The advantages of outsourcing are more experiences, opportunity to get expertise in particular job, and manageable time & planning to the next job. In contrast, disadvantages of outsourcing are low salaries, poor employee benefits and uncertainty for continuing job. This paper describes, even though outsourcing discriminates outsourced employee, there are some benefits for outsourced employee. Advantages and Disadvantages of Outsourcing for Outsourced Employee What is the definition of outsourcing? According to Caruth, L. & Caruth, D., “Outsourcing is the process of contracting with an outside party (vendor) to perform company functions that were previously perform in-house” (2010). Outsourcing has been used by company in difference sector businesses, such as retail, manufacturing, information technology, banking & finance. Medforth argued that “outsourcing support a company to change magnitude in almost every aspects: increase in profits, productivity, business value, business performance...
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...Management Outsourcing [pic] I. Introduction Outsourcing is used extensively by both the manufacturing and service industries, and there are plenty of reasons to utilize outsourcing. Organizations make use of outsourcing usually in the interest of lowering cost and to make better use of time and energy costs, hence redirecting their energy to something more important or just to conserve energy. Outsourcing is essentially a division of labour. One simple example involves companies outsourcing their financial statements to accountancy firms to consolidate their expenditures, hence eliminating the need to hire an accountant. Another relevant example would be to hire the services of another company to manage all or parts of the services that otherwise would be otherwise rendered by an IT unit of the organization. Some reasons for outsourcing include organizations being able to focus purely on their core business, for example an automobile factory. The raw materials required to manufacture an automobile are outsourced to other companies and hence the company itself can focus on just creating quality automobiles. By outsourcing the raw materials to companies who specialize in providing them, they can also ensure that the raw materials are of reasonably better quality and this can be done by contracting with a new service level agreement. Another reason being companies are able to access the wide pool of talent available through hiring agencies. In layman terms, outsourcing involves...
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...Proposals and Research Nashira Wiggins American Intercontinental University Abstract What are the differences between formal research and a business proposal? What are the similarities? This paper will compare and contrast the theoretical and practical differences between formal research and a business proposal. The second part of this paper will explore the effects of human resources outsourcing on leadership performance and employee commitment. This paper will show that human resources outsourcing has a negative effect on employees and their morale. Part 1 Formal research provides basic information and statistics in a given field or industry depending on the focus of the research. Formal research may be used to research the demand for a specific product or service by researching similar products or services that are already on the market. Included in this research would be the general sales rate, the companies that market these products or services, and the current sale price. Research will reveal whether the market for the product is flooded or if it is indeed a good business opportunity. A business proposal is a document that proposes a method for completing a task. A business proposal can be used for launching a new product or for something like implementing a new strategy for a marketing campaign. “A proposal includes a brief description for the task at hand, a section describing the general approach to the task, a schedule for the task in question and a budget...
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...“Outsourcing-Offshore” Outsourcing is said to have emerged a few thousand years ago with the production and sales of food, tools, and other household appliances. As soon as small communities and societies began to form, people with specialized professions began to trade with each other for goods and services. It can be said that each worker was outsourcing some activities to others. Research shows that even in the industrial age, a few thousand years later, very few companies outsourced any of their operations. Companies in the 1800s and 1900s were vertically integrated organizations, taking care of their own production, mining, and manufacturing from raw materials to finished goods as well as then shipping the goods to company owned retail outlets. These companies often handled their own taxes, employed their own lawyers, as well as designed and built their own buildings without outside assistance. This model does not apply to all companies during that time period, but it gives a general idea of the time. The history of outsourcing portrays that as onshore outsourcing continued manufacturing outsourcing of low-tech items such as toys, shoes and apparel goods began to take place. After this manufacturing higher value items like high-tech components and consumer electronics began to appear. In fact outsourcing history demonstrates that manufacturing was the first activity that began to move to offshore destinations in a quest for lower costs. Globalization began during...
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...Pros and Cons of Outsourcing Outsourcing is the practice of having certain job functions done outside a company instead of having an in-house department or employee handle them. Functions can be outsourced to either a company or an individual. In other words it is the process of assigning a company’s business processes to an external agency in lieu of enhancing service quality, driving innovation or deriving benefits of lower labor costs. Outsourcing has become a major trend in human resources over the past decade.More and more companies, large or small are turning to outsourcing as a way to grow while restraining payroll and overhead costs. The effects of outsourcing are subjective to the industry and the purpose for which the same was undertaken. However across industries outsourcing is primarily undertaken to enable companies to generate better revenue recognition and to provide them an added competitive differentiation. While done with the best of intentions, outsourcing has a telling effect on quality of products and services delivered as a consequence of this, either enhancing or lowering quality. While there could either be an increase or decrease in the turnaround time while outsourcing, it could also result in improved or decried customer service. Outsourcing, primarily undertaken to provide companies the competitive edge, can also result in easier management and better productivity based on how effectively the process in managed. Outsourcing is often undertaken...
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...Outsourcing refers to a company which contracts with another company in order to provide services that might otherwise be performed by its own employees. These jobs are handled by separate companies that specialize in each service. Often, these outsourced employees may be located overseas. To know whether outsourcing is appropriate in a given circumstance, it is important to understand several key concepts. Many professors and experts in the business world have conducted case studies and general research to understand the implications of outsourcing, both positive and negative, and the environment which provides the greatest chances for a successful outsourcing venture. The framework within which a firm must decide whether to outsource or not will often involve a two-stage decision process. First, the business must make its decision and secondly, it must take managerial action to implement the decision. To begin with, a company must identify why outsourcing can be useful in an ideal situation and then evaluate whether their circumstances fit these conditions. Essentially, outsourcing can ideally benefit a company from a financial perspective since the outsourced work can be cheaper in and of itself and secondly because it allows the company to focus on other, perhaps more pressing issues. As important as it is that the company can identify appropriate conditions it is equally necessary to be aware of circumstances which will not provide an appropriate environment to outsource...
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...Abstract Being able to remain or become globally competitive while facing challenges within today's economy is a challenge for all types of companies and organizations. When faced with struggling budgets outsourcing and or downsizing are often seen as the only possible solutions for businesses to stay afloat. Trying to maintain competitiveness while downsizing and or outsourcing brings about additional challenges for human resource management organizations. Containing Human Resource Costs During Economic Challenges The current economy brings challenges to every level of a corporation, including human resource management. Maintaining an effective budget is not always easy and becomes even more difficult with the strains of an economic crisis. While the elimination of unnecessary materials and or processes may help in curtailing costs and spending, it is not always an easy task; and an even more difficult task involves the elimination of actual jobs. As companies are faced with having to cut costs, eliminating jobs is sometimes an unfortunate solution. Human resources management is defined as the process of managing human talent to achieve an organization's objectives (Bohlander & Snell, 2010). Being able to effectively execute the process of human resources management relies on several factors. Being able to compete, recruit and staff globally; embrace new technology; manage change; manage talent; respond to the market and contain costs are imperative to...
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...Adversity of Outsourcing: Outsourcing from the Employee’s Perspective Schillen & Steinke Mitigating the Adversity of Outsourcing: Outsourcing from the Employee’s Perspective Sarah J. Schillen Seattle Pacific University USA sschillen@gmail.com Gerhard Steinke Seattle Pacific University USA gsteinke@spu.edu ABSTRACT This paper explores how outsourcing activities and decisions put the well-being of the remaining employees at risk, ultimately affecting productivity and creating further costs to the employer. It highlights four potential threats to remaining employees: trust, job satisfaction, motivation, and stress. The paper provides several suggestions for mitigating these impacts, including communication to retain trust, acting ethically to ensure satisfied employees, seeking an understanding of employee perspectives to build employee motivation, and providing good planning along with training and development to reduce employee stress. INTRODUCTION Globalization provides organizations with more options than ever before. Business leaders are continuously encouraged to adapt, reevaluate, and strategically improve processes and approaches. Best practices are reinvented rapidly in attempt to keep up with market trends. The quest to recognize new methods for increasing revenue has become the inspiration for exploring new management techniques and strategies. One such rising trend in the advent of global markets is that of outsourcing. Common purposes for outsourcing include improvements...
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