Free Essay

Outsourcing

In: Business and Management

Submitted By Throntveit10
Words 2329
Pages 10
Timmy Throntveit
Organizational Theory
September 21, 2014
Research Paper: Outsourcing

Outsourcing is the practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally (Investopedia). Why do many organizations outsource their business overseas to countries like China or India? Outsourcing is an effective cost-saving technique when used properly. Outsourcing is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce their products internally. China and India are the fastest growing economies around. The most obvious reason is the reduced costs. Wages for skilled workers are lower in developing countries such as China or India.
The outsourcing of American jobs has become one of the biggest topics in the United States. The country's working class faces pressures which they have not experienced since the Great Depression of the 1930s (Magdoff, Foster). Outsourcing continues to have several different opinions from many individuals. On one side of the topic, many are in support due to the low cost for companies. The main reason is outsourcing boosts the United States economy. On the opposing side, many are opposed to outsourcing because of the reduction of jobs in the United States and a variety of other factors. The focus on outsourcing has led to many companies being shipped to foreign countries like China and India.
With the rise of technologies that make life much simpler for all of us, the human race has developed along with it a growing list of demands. As a result, organizations are addressed to solve these demands. This frame of thought is also applicable to outsourcing organizations as well. We need to realize that most of us do not have the time to do everything ourselves, and some may seek help even if help may be offshore. In order to meet the demand for quality work, outsourcing organizations are formed. What kind of organizational structure is most effective for outsourcing companies? In order to answer this question, we need to look at the three basic organizational systems: The rational, natural, and the open organizational system (Chopra, 2010).
The Rational System: A rational organization system is oriented to the pursuit of relatively specific goals and exhibiting high formalized social structures. Although there is no organization that is completely rational in the real world, business owners can effectively apply rational in some situations. If the business owner can clearly identify what they hope to accomplish with a certain course of action, what alternative choices there are, and what the outcomes are, they can rely on the formal structure of the company to carry out the order/s. Within the context of outsourcing companies, it is effective to some extent, as this fosters a sense of responsibility and discipline within the organization. This means stricter deadlines, more emphasized standard of work, and a more systemized operation of tasks. While this may be the ideal structure for outsourcing, factors such as job satisfaction starts to happen, and using the rational system becomes an obstacle (Chopra, 2010).
The Natural System: Organizations are collectivities whose participants are pursuing multiple interests, but also recognize the value of the organization as an important resource. In natural systems, employees understand the formal rules, roles, and goals of the organization. The natural system is in many ways opposite of the rational system in that it focuses on the activities that may affect the organization negatively. Sometimes under this system, there is no clear hierarchy of authority, but the tasks are still divided and distributed among people who specialize in other fields. For outsourcing, this means that workers are satisfied with their jobs. While being highly rational in outsourcing may be ideal for some, the natural system may be more viable for those who want to work on a more personal basis (Chopra, 2010).
The Open System: Organizations are recognized as having elements of the natural and rational approach, but also as being only semi-contained. In an open system, companies depend on the employees, supplies, consumers and even the competition for research and development. Because the business does not have control of all environmental forces, it relies on predictions to cope with the unexpected input (Chopra, 2010). This organizational structure is best suited to utilize outsourced companies. The operations in an open system are project-based. This means that there is an increased flexibility in assigning work to the employees best suited to the particular task. Each task has different demands in itself, and the quality of work and output rate can differ from each other, which entails a lot more flexibility from workers.
Today, many companies have turned to outsourcing in order to improve their current situation. Outsourcing is to be considered the latest trend in the modern economy all over the world. Outsourcing has both positive and negative sides to the organization. However, many say that the reasons to outsource outweigh the negative things it may bring. Many entrepreneurs often wonder what the reasons for outsourcing are and why they should risk their success of their organization over this method. The next couple paragraphs will be discussing the reasons why organizations outsource their companies.
Outsourcing is a business strategy that moves some of an organization’s functions, processes, activities and decision responsibility from within the organization to outside providers. This is done through negotiating contract agreements with a vendor who takes on the responsibility for the production process, people management, quality, customer service, etc. Why do organizations outsource? Outsourcing makes it possible for organizations to focus on their core business in order to create a competitive competition by decreasing their operational costs.
Outsourcing can be either a permanent or temporary arrangement to bridge the gap in staffing, learning better quality techniques or improvement of faulty product design. When looking for outsourcing opportunities, the organization should be aware of the potential areas in order to determine if part or all of that function should be outsourced (Advantages and Disadvantages). Outsourcing is a somewhat controversial topic, with strong supporters on one side of the argument and opponents on the other. The main concern is that many jobs that could be kept in the United States are given to other people in other countries instead. So, in order to determine whether outsourcing is a good step for your organization, make sure the organization is familiar with the pros and cons associated with outsourcing the work to other individuals in other countries (Outsourcing Statistics).
Despite the fact that outsourcing production offers cost advantages to a multinational company in the form of availability of potential low costs, it is still being criticized in the United States. The controversy is that many people see outsourcing as dangerous to the American economy and have expressed concern about the number of jobs being occupied by non-American workers on other countries. However, on the other side of outsourcing, others view outsourcing as a form of trade and strongly believe that trade benefits society. Both sides of the debate have valid point, but approach the topic from different perspectives.

Advantages of Outsourcing
Foremost, outsourcing jobs has several advantages such as cost, quality, efficiency, improved economy, and the access to specialized skills. The biggest reason companies outsource is the advantage of saving money. Many companies that outsource are able to cut considerable costs and expenses by allowing other countries to perform work for significantly less money. India has become one of the most prominent countries for outsourcing American companies. The same work done in the United States can be accomplished in another country for a much lower cost. Organizations that have reduced their cost are ultimately benefitted, which in return makes them more competitive in today’s marketplace.
When it comes to conducting ad running a business smoothly, efficiency is key. This means that your company is able to produce many products in the shortest amount of time while being able to maintain the highest quality for the consumer. Outsourcing enables organizations to become more efficient by giving work that cannot be accomplished within in a reasonable amount of time to those who are specialized in that particular field (Outsourcing Statistics).
Supporters of outsourcing also claim that it benefits and improves the economy, both in the United States as well as abroad. Countries whose economies were struggling previously are now able to succeed in the marketplace because companies who outsourced their needs to them. Businesses are able to decrease their costs through outsourcing, they are then able to transfer those savings to the consumer, who enjoy paying less for the product, which leads to a higher standard of living (Outsourcing Statistics).
Outsourcing jobs also increases the speed and quality of delivery for outsourced activities. Outsourcing focuses on creating a balance between cost savings and proving customer satisfaction with quality products and services. A company has a better chance of being established in the market for a longer time (Gibson). Another reason companies outsource jobs is because of the expertise and skilled services a business may reap. In the world of globalization, American companies are pursuing strategies to become more competitive. The key objectives of these strategies are reducing costs by becoming more cost efficient, maintaining a competitive edge, and enhancing profit.

Disadvantages of Outsourcing
Even though businesses that outsource work will defend their choice, there are strong opponents to it who would prefer that American companies would stay here, and hire more employees to help create more jobs. The debate over outsourcing has been morphing, and today there are growing numbers of people who think that what started as a sensible, globalized extension of sending some work outside a firm to specialized companies may in fact be creating long-term structural unemployment in the United States.
Companies that use outsourcing claim that the advantages outweigh the disadvantages. They insist that the benefits that make outsourcing preferable to the centralization of business within the United States. By outsourcing, it allows a company to lower their overhead costs due to the overhead costs being cheaper. This allows that this is then passed on to the consumer, who enjoys lower prices. The United States national economy benefits as consumers are stimulated to participate in the economy by increasing their purchases; however, this benefit is offset by negative economic variables. Outsourcing benefits other countries’ as well, and it is not uncommon to see proponents of outsourcing lauding the fact that this practice results in productive employment for people living in economically and professionally depressed areas (Outsourcing American Jobs).
One of the biggest oppositions of outsourcing is the fact that it removes jobs from the American people, which increase the unemployment rate here in the United States. The biggest negative of outsourcing is the loss of American jobs. Every year, the United States loses 230,000 jobs due to outsourcing. Many argue we are losing too many jobs at such an astonishing rate, and not creating enough.
Outsourcing is viewed as unpatriotic by many Americans. Jobs are being taken away and practically handed them over to the less fortunate countries, and contributing to other countries’ economies while ruining our economy. Outsourcing weakens the American economy as it contributes to trade deficit and the loss of American consumers who buys these products and services. This is because employees displaced by foreigners and left unemployed or in lower paid jobs have a reduced presence in the consumer market.
Within the last couple decades, the American labor market has been altered due to an increase in outsourcing. Although, offshoring has become the latest phenomenon there are many advantages and disadvantages to offshoring. The advantages are cost, quality and the access to specialized skills. However, on the opposing side offshoring is taking the American jobs and causing our economy to suffer. Overall the United States needs to stop outsourcing to provide more jobs to Americans in order to keep a healthy economy.

In conclusion, the impact of outsourcing in many different parts of the world today is huge. In this case, the effect of outsourcing to the American economy and the World’s economy are both negative and positive depending on people’s views. There is truth that outsourcing American jobs to third world countries is a big concern for Americans and the U.S. government. Globalization affects every business, whether small or big around the world. Therefore, outsourcing can be either positive or negative for every large or small business around the world (The Impact). Outsourcing is a serious threat to the American worker, and action is needed to prevent the United States from outsourcing jobs overseas.

* (2010, November 20). The Impact of Outsourcing Jobs to Foreign countries on the US Economy. Retrieved September 30, 2014, from http://www.articlesbase.com/outsourcing-articles/the-impact-of-outsourcing-jobs-to-foreign-countries-on-the-us-economy-37003074.html. * Advantages and Disadvantages of Outsourcing. (n.d.). Smart Church Management. Retrieved October 6, 2014, from http://smartchurchmanagement.com/advantages-and-disadvantages-of-outsourcing/. * Chopra, Renu. (2010). The Outsource Blog. The Outsource Blog RSS. Retrieved October 4, 2014, from http://www.theoutsourceblog.com/2010/07/choosing-the-best-organizational-structure-for-outsourcing-companies/. * Gibson, Eva. (2006). Outsourcing: The Pros and Cons. Retrieved September 30, 2014, from http://ezinearticles.com/?Outsourcing:-The-Pros-and-Cons&id=316075. * Magdoff, Fred, & Foster, J.B. (2014, January). The Plight of the U.S. Working Class. Retrieved September 24, 2014, from http://web.a.ebscohost.com.lib2.bvu.edu/ehost/detail?vid=3&sid=dacf1cf1-b85a-41ce-aa76-fbc5089ad7b0%40sessionmgr4003&hid=4206&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=a9h&AN=92897732. * Outsourcing – two sides of the coin. (n.d.). Outsourcing – two sides of the coin. Retrieved October 12, 2014, from http://www.moneyallocator.com/articles/outsourcing.asp. * Outsourcing Definition – Investopedia. (n.d.). Investopedia. Retrieved September 21, 2014, from http://www.investopedia.com/terms/o/outsourcing.asp. * Outsourcing Statistics: The Pros and Cons. (n.d.). Udemy Blog. Retrieved October 6, 2014, from https://www.udemy.com/blog/outsourcing-statistics/.

Similar Documents

Premium Essay

Outsourcing

...Outsourcing is an important part of Globalization. The choice to outsource U.S. jobs should be taken into great consideration as there are many segments into which it effects greatly. Also, outsourcing is a great option for a company who needs a certain project completed who do not have the man power or the money to hire a new employee, companies can outsource based on projects in the U.S.A. or abroad. Often outsourcing is a way to save money, but there can be unexpected costs as well. While it can be both a benefit to a customer it can also be a reason to avoid doing business with a company due to it. The decision to outsource is certainly not one that any organization should enter into lightly. There are many reasons to consider outsourcing to foreign countries. A few of the most significant advantages of outsourcing include the most well-known reason to consider outsourcing is to access cheaper labor. Workers in developing countries are paid far less than workers in developed countries due to the lower cost of living. Often these workers are not unionized as well, which further helps with cost cutting. At the same time outsourcing U.S. jobs to a foreign country can create a detrimental blow to the reputation of a company. In 2002 when T-Mobile was established the television spokesperson was Catherine Zeta Jones, a very classy and beautiful actress. Customer service call centers were based in the United States and there was never an issue that could not......

Words: 1277 - Pages: 6

Free Essay

Outsourcing

...Outsourcing – A Global Challenge MBA-700 International Economics Abstract The choice to outsource is a major strategic decision not made lightly by companies in today’s global marketplace. Though it brings probable results of cost reduction, loss of control in your product or the quality of service rendered makes this a decision that should not be taken lightly. Though a concept decades old, outsourcing is a topic that brings out fervor in individuals fighting for or against it. It’s a debate centered on moral, economical, and political aspects, with feelings that intensify during economic downturns because of the This paper will discuss theories of outsourcing, while comparing and contrasting the disadvantages and advantages (SWOT Analysis – see Appendix 1) of a concept that is growing in global business. The paper will conclude, most importantly, with discussions on three outsourcing alternatives and their potential to re-invent the status quo. Introduction The advent of globalization has proven that outsourcing is not a hypothetical situation; it is a major strategic business decision growing in popularity that our American workforce must now face in the decline of our U.S. economy. Some believe that outsourcing has become a serious issue not only for our workforce, but also in our major corporations, and the political arena. Issues such as the security of our nation have become debate topics, with critics arguing that outsourcing has weakened national......

Words: 4072 - Pages: 17

Free Essay

Outsourcing

...Outsourcing Running a business requires many decisions to be made, one decision is whether a company should perform work internally or outsource job duties. Outsourcing is the technique used by companies to reduce cost by transferring portions of work to third party suppliers as opposed to performing the job internally. Outsourcing can be very beneficial in reducing cost, but there are also issues that surround outsourcing in general. In order to understand the benefits of outsourcing, one needs to fully comprehend the issues involved with outsourcing, the benefits that a company may experience from outsourcing, how to truly determine whether outsourcing a specific job is necessary or beneficial, and how outsourcing is relevant in today’s workplace. First, it is important to understand what outsourcing is. According to Robert Handfield (2006), outsourcing, which became a formally indentified business strategy in 1989, can be defined as “the strategic use of outside resources to perform activities traditionally handled by internal staff and resources” (para. 5). Outsourcing, sometimes referred to as facilities management, is the strategy that involves an organization to contract out certain aspects of a business to both specialized and efficient service providers. Handfield (2006 points out that subcontracting and outsourcing, although similar in nature, are different because outsourcing “involves substantial restructuring of particular business activities including, often,...

Words: 1711 - Pages: 7

Free Essay

Outsourcing It

...Outsourcing Yet Another Service: IT Ryan S. Pavlak BRIT (R)(MR) Independence University Outsourcing Yet Another Service: IT In the world today saving the ever so precious dollar bill is the most important thing to almost every business. The outsourcing if information technology services is just another way for a company to potentially save money. Information technology services is not the first service to be outsourced and it is surely not the last. The reason it seems so beneficial is typically because of how mismanaged the internal information technology services, like what was taught earlier in this course. But is it really beneficial to outsource information technology services and who are really outsourcing their information technology services? The cons along with other pertinent information about information technology outsourcing will be discussed further. Who is outsourcing As technology has advanced over the past few decades the age of the internet and information has blossomed. With this developing industry came the need for a service to keep it up and running smoothly, that’s where an information technologist specialist comes into play. This can include any organization from a hospital to a flower shop, if the organization uses technology the need to service those serves will be there. So who is actually outsourcing this service? An article written in the Journal of Accountancy explains that large companies are outsourcing their information technology......

Words: 1003 - Pages: 5

Free Essay

Outsourcing

...The Trend of Outsourcing Jobs Did the major companies in America not think of global competition as they started to expand their operations and increase the salaries of the workers? Why is it such a hot topic now, why didn't this act of outsourcing start long ago? What effect does outsourcing have on the American economy, will we be able to stop this trend, and if so what will be the effect. In this paper I will be looking at and discussing why companies are outsourcing the jobs overseas. What benefits that companies are getting out of it, and the problems that face management, as outsourcing seems to be the trend of big business. INTRODUCTION Outsourcing is the delegation of tasks or jobs from internal production to an external entity (such as a subcontractor). Most recently, it has come to mean the elimination of native staff to staff overseas, where salaries are markedly lower. There has to be a reason that companies are going to outsourcing rather than hiring people within their own country. The bottom line, the single thing that drives every company in the world. What ever can increase the bottom line you can expect that companies will do everything possible to reach higher profits. Living in Michigan almost my whole life, and being feed from the hand of General Motors outsourcing hits close to home. I feel that the one thing that has increased outsourcing is the results of the union. Back in the time when the union started I believe what they were doing was......

Words: 3275 - Pages: 14

Premium Essay

Outsourcing

...Introduction Before any company starts outsourcing any part of a company it should be investigated and analyzed thoroughly in order to achieve maximum success. The decision to outsource a part of a company should not be taken lightly but rather seriously. There are many advantages to outsourcing, however, with that some disadvantages come in as well. The following information in regards to advantages and disadvantages was taken out of articles about IT offshore outsourcing. Advantages There are many good reasons to consider outsourcing. Some are listed below. Cheaper Labor – workers in developing countries are paid less Cut Operating Costs – the outsourced work has to be paid for, but this payment is also cheaper than having your company performed the operation itself. Lower Labor Training Costs – training new employees is expensive. Each employee might need one to three weeks of training and that is expensive. When the customer service or IT department is outsourced the training is cheaper. Increase Productivity – Your Company can have employees working on site 24 hours a day. It becomes harder to attract talented employees to work less desirable shifts, however with outsourcing your company can provide service 24 hours a day, with workers around the globe operating in the best shifts available. Focus on Core Business – the outsourcing of the IT department can leave some space for other important departments within the organization. Disadvantages As discussed above...

Words: 635 - Pages: 3

Free Essay

Outsourcing

...Outsourcing Information Technology services is when a company hires the services of another company and/or individual to perform the work that would have been performed by that company’s employee or employees. The usual information technology services companies outsource are website design and maintenance, help desk services, and application development and software maintenance. Outsourcing is done to save the company money, improve quality, share knowledge, and the flexibility of utilizing the company’s resources for other activities. With how much technology and software has improved throughout the years with the help of information technology, things that were once done manually are now done by operating systems. With these information technology systems companies are able to receive up to date information constantly throughout the day, in turn this keeps the companies running more efficient. Outsourcing information technology services allows companies to customize products and services based on the company’s requirement, access to the latest technology and updates, less risk of errors and higher quality services. Outsourcing information technology services has a few advantages such as: 1) Cost effective - Information technology outsourcing can cost the companies less than what it would cost them if they were to do all the work on their own time and effort. Information technology systems help a company be aware of everything going on minute by minute, which in......

Words: 623 - Pages: 3

Free Essay

Outsourcing

...Kristen Ramer This day in age October 2012, there are many opportunities that present themselves to save companies money to be able to expand or grow. Outsourcing has become a hot topic with Americans and the majority of Americans are not thrilled with the idea. Americans that are not supportive of the idea may or may not have done their research to give them the facts to support their claims. What I am going to do is discuss the pros and cons of outsourcing and provide examples that can actually make or break companies who decide to outsource. Outsourcing is a strategic decision and the company ultimately has the final say, but the important decision may affect their reputation is that a chance they are willing to take? Airlines are extremely important in America, we are a country that travels nonstop and Airlines have become a necessity. I believe that some positions in the Aeronautical field could most definitely be outsourced, but the important question is what positions and at what cost? I think the best positions to outsource are the labor-intensive positions. For example the interior of the plane, putting fabric on the seats, assembling the seatbelts and all the other tedious work involved with setting up the airline inside the plane. I think outsourcing projects like this will ensure the customers are getting the best service and people that are able to communicate back and forth. I have been in a situation where I called for help with a technical......

Words: 1051 - Pages: 5

Free Essay

Outsourcing

...Hire A Literature Review The study investigates the evolution, pros and cons of outsourcing as business function. Many researchers have identified various reasons to outsource an activity following a set process. The review proposed a well defined integrated outsourcing process model for effective outsourcing. Using an example of a global company this study detailed the benefits of externalization process and concluded that outsourcing is successful if activity selected is correct. Hire OUT-Sourcing 2 Global Procurement (BMO 5307) Assignment 1 Hire OUT -Sourcing A Literature Review Hire OUT-Sourcing 3 Contents Introduction ............................................................................................................................ 4 United Technology Corp. (UTC) ................................................................................................... 5 Rise of an Era - History & Evolution ......................................................................................... 5 Why Outsourcing? ................................................................................................................... 5 Procurement Outsourcing & UTC................................................................................................ 6 Where To Begin? ..................................................................................................................... 7 What UTC Was Willing To Achieve? .................

Words: 5031 - Pages: 21

Premium Essay

Outsourcing

...DECLARATION I Musubika Narigisi, declare that this Research report is my original work and has never been submitted to any university for examination, where other people’s work has been used, due acknowledgement has been made. Candidate signature............................................. Date................................................. Musubika Narigisi i APPROVAL This Research report complied by Musubika Narigisi has been under my supervision and guidance her work is now ready for submission. Signature................................................ Date.............................................................. MR SSAJJABBI VINCENT ii DEDICATION I dedicate this piece of work to my parents Mr. and Mrs. Kampere Ramadhan and the entire family not forgetting my friends who have helped me during this study I also dedicate it to my dear sister Mrs Lugoloobi Zahirah and her entire family for the great assistance they have given me during my stay at campus and through this study as well. I cannot forget to dedicate it to my sisters, Kampere Fahima, Kampere Madiha, Kampere Afraa and my brothers Kampere Hamuzah and Kampere Adiham. iii ACKNOWLEDGEMENT I wish to extend my sincere appreciation to my supervisor Mr. SSajjabbi Vincent for his guidance and technical advice during the study without him this study would not be a success. I must acknowledge the contribution of all my brothers and sisters plus my friends throughout my stay at the......

Words: 5146 - Pages: 21

Free Essay

Outsourcing

...Outsourcing: The Government, the People and the Companies Jeffrey W. Coleman Webster University Abstract Making a decision about whether or not to move these activities offshore is a decision of far-reaching consequences. Developing countries have been unable to radically alter their industrial structure due to numerous internal institutional and external technological barriers. Consequently, they have sought global participation through outsourcing activities. This is indeed a break from the traditional self-reliant way of doing business. Outsourcing arrangements are technologically and organizationally complex, and present a variety of challenges to manage effectively. Outsourcing benefits include cost savings, quality improvement, and the ability of the organization to concentrate time and resources on its core business. Outsourcing trends change from year to year, and usually involve changes such as progressive outsourcing, cloud sourcing, mergers between organizations from different parts of the world and protectionism. In this paper we will look at a few of these areas such as the how in recent years the business practice of outsourcing jobs has been considered both a blessing for American business and a concern for the American worker, the amount of outsourcing being done and why, the affect on the economy in the United States, and the role government plays in outsourcing. The paper concludes, however, that the trend is just beginning and how our country...

Words: 4404 - Pages: 18

Premium Essay

Outsourcing

...Does Outsourcing Save Money COM/156 October 7, 2006 Jacqueline Lance In this day and age, we wonder why major companies outsource and whether they are really saving money. A website named investors.com said, “More than 1.3 million additional Western jobs will vanish by 2014 due to outsourcing”. Outsourcing to foreign countries can help save larger companies money, by reducing cost and increasing revenue. Companies are finding more ways to save money and increase productivity. Outsourcing might not look like the best decision to consumers in reality it is the best choice for a business. Even though a lot of American workers are out of work, there are still several benefits to outsourcing. The main benefit to outsourcing for most companies is saving money. In this current economy it is hard to save money in America with the cost of just about everything increasing daily. Companies have no other choice but to outsource, or they might have to close down. In order to keep up with consumer demands, major companies are outsourcing to foreign countries, were they are able to get tax breaks and cost reduction on materials. With the cost savings that the companies receive they are able to produce a better product. There are several things that must be completed prior to determining if out sourcing is the best option for your business. Outsourcing in foreign countries is becoming the new way for companies to save money. Before a...

Words: 1563 - Pages: 7

Premium Essay

Outsourcing

...Emerging Trends: Outsourcing Outsourcing or subcontracting is a process where employers handover routine or peripheral work to outside organizations that specialize and execute functions more efficiently. Outsourcing has advantages and disadvantages. Outsourcing nonessential functions can be cost effective and improve the quality of services. Outsourcing agreements create long-term relationships through contracts between employers and subcontractors by flexible renewable contracts. When companies outsource, they send a small number of permanent employees to oversee a shifting workforce of possible employees. The trend of outsourcing human resources functions such as payroll, training, and recruiting are more common. Human resource outsourcing is an $80 billion industry with a projected growth rate of 33percent. Although outsourcing payroll activities is efficient, there are some downsides to outsourcing human resource functions of training and performance evaluations. Outsourcing Advantages Outsourcing companies provide a better-quality of people who are on the up and up with current human resource practices that pertain to specific human resource tasks and activities. The core mission of outsourcing firms is to specialize in a particular function while providing exceptional services and increasing efficiency. For example, a firm specializing in training employees to use work processing software is likely to train employees when new software upgrades are launched......

Words: 462 - Pages: 2

Premium Essay

Outsourcing

...historical development of outsourcing: the latest fad? Chris Lonsdale University of Birmingham, Birmingham, UK Andrew Cox University of Birmingham, Birmingham, UK Few management practices have attracted as much attention as outsourcing is enjoying at the present time. That firms should aggressively adopt the practice is almost becoming a given, and consultants' Abstract presentations talk of a ``revolution in Notes that outsourcing is just one outsourcing''. The academic literature on the of the means by which the subject has grown in kind. boundary of the firm can be What is often lost in the hype surrounding adjusted. Considers various other means such as conglomeration the concept, however, is that outsourcing is and horizontal and vertical just one way in which the boundary of the integration. Focuses on firm can be adjusted in response to changing outsourcing and its place in this economic pressures. Indeed, any history of bigger picture and discusses the history of outsourcing. Outlines the concept should recognise this, as the concerns for managers and gives recent trends in its favour have very much case examples from Rank Zerox been set in the context of a general movement and BP. towards more ``focused'' business strategies. This article investigating the development of outsourcing is in three main sections. First, it sets outsourcing in the wider context of the boundary of the firm issue. Second, it then proceeds to discuss the history of outsourcing, and its......

Words: 5110 - Pages: 21

Free Essay

Outsourcing

...Abstract The report is an analysis of the various benefits of outsourcing against the disadvantages associated with it. It highlights the benefits and clears the misconceptions that are associated with it. Outsourcing According to C.W. Axelrod, Outsourcing is, “the provision of certain goods or services by third party specialists in direct/ indirect exchange for money” (Axelrod 2004, pg 1). It means hiring specialist organizations which may be located overseas to carry out some of the activities of the business in return for money. The outsourcing industry started in the 1980’s in India when few airlines began their back-office operations; and since then, there’s been no looking back. Today this industry is synonymous with ‘sunshine industry’ or ‘youth oriented industry’. Its constantly increasing importance can be gauged from the fact that the government is planning a separate ministry to look into the affairs of this sector. Outsourcing: The Need of today The government’s decision to have a separate ministry for this industry, itself speaks volume about the vitality of this sector. This industry has truly proved to be a beacon of hope for professionals who are unable to find a full time job and at the same time it has also helped the young graduates gain experience and business skills before embarking on a full- fledged career. A major reason supporting outsourcing is the significant savings of costs, specifically on labor which on usual basis represent 60-100......

Words: 881 - Pages: 4