In many cases outsourcing has proven to be beneficial for businesses. It can help a business’s management by allowing executives to focus on the core structure of the firm rather than every specific element. Production, manufacturing, or additional servic...
Outsourcing is when a company or business decides to contract part of their services that they do not do well to an outside company. There is two types of outsourcing offshoring and nearshoring. Offshoring is where a company outsources abroad and, nearshoring is outsourcing within the home country. The reasons that a company decides to outsource varies from company to company but, the most common ones are cost reduction, increasing globalization, growth , tax incentives, government support and access to new markets. However there are some key challenges that come with offshoring and those key challenges are quality and labor retention. ( Bacon, 2007 p 38-39). Asian outsourcing began as early as the 1960’s (Espana 2013 p 3). Some people argue that offshoring is good for the economy even though it’s a well know fact that offshoring has a negative effect on the economy, there is wage differences and the unemployment rate increase.
Outsourcing is a business strategy that moves through a number of functions, processes, activities and decision responsibility from within an organization to outside providers, in order to reduce the costs of an organization. This is done through negotiating contract agreements with a vendor who takes on the responsibility for managing it. The decision to outsource is a major strategic most company, since it involves weighing the potential cost savings against the consequences of a loss in control over the products or services.
As more companies expand their business globally, they are seeing more opportunities and an increased set of threats to the market. Threats like war, political revolutions, new currencies, and natural disasters can affect growth and political stability throughout the world, so in order to successfully compete in the international market more companies are faced with the decision of relocating part of their operation offshore. This paper will address what key elements companies in this situation need to address, such as, quality of customer service provided, security of confidential information, and the possibilities of cost savings, in order to be sure that outsourcing is the best solution for their company.
Every firm has to make important decisions regarding the production process of a product. Different firms have distinctive production strategies and the main goal is to maximize efficiency as well as financial growth. One important decision that every firm needs to make is to either outsource or insource the production of a product, or parts of a product. Outsourcing and insourcing are techniques of dispersing work among alternative departments or companies for strategic reasons.
Strategy Development and Initiatives 1) The history, development, and growth of the company over time = == == ==
Strategic planning is a process wherein the company will allocate its resources and focus its priority in creating a strategy that will meet the company’s set goals according to its mission and vision or its future plans of evolving or expanding. This might involve change in processes or plans to make the operations of the company more efficient or improve the overall status of the company. The main focus is to make sure that everyone in the company and its stakeholders are focused towards common goals and there are a set of realistic and feasible results or expectations that could lead the company to being a better one. That way, once the strategic plan has been set and implemented, the success of it can be easily evaluated.
As stated above, supported by Mathis R.L and Jackson, J.H (2012), the strategic plan of an organization emanates from its vision and mission. Such plans are reached after due consideration of the factors which affect the success or otherwise of the processes and outcomes of such plans. These factors are both internal (the strengths and weaknesses available in the resources; both human and material within the organization) and external (the threats and opportunities available outside the organization; dynamism of the business world, globalization trend, the impact of information and communication technologies on world business). As mentioned by Whittington (2001) cited by Pilbeam & Corbridge (2010), senior managers who come up with strategies for their organization should do so considering two dimension; the processes of such strategies and the outcomes. According to him, the processes are either deliberate or emergent while the outcomes are either profit maximization or pluralist in nature (including other goals and interests of the organization). In my under...
Outsourcing is a term defined as the movement of jobs elsewhere to another company that can perform the same tasks, even though there is the potential of doing the jobs inside the company itself. An example of outsourcing is currently being done at your company, where contractors, usually part of their own contracting company, are performing the duties the old employees used to do. Another example of outsourcing can be moving jobs overseas, such as to developing nations, where cheap labour is readily available and the laws are much less restrictive. In both of these circumstances, the aim of outsourcing is to provide a cheaper alternative for the company, while improving its efficiency. Though there is usually deep public backlash from workers right over Australia, when jobs are being sent overseas.
Gone are the days when merchant ships would take months and planes would take days and weeks to sail or float around the world from one seaport or airport to another or travel from one part of the country to the other. Science and technology have shrunk distances. Outsourcing is the transfer of production of goods and services by one company to another independent company usually for cost benefits (Keat & Young, 2009). The practice has been around for years and is also known as offshoring when it involves a company in another country. Many large explore the financial advantage of outsourcing as far as to other countries where separate specialized companies located overseas handle different tasks and services. Outsourcing has revolutionized business in all areas, from manufacturing to human relations and promoting rapid business growth. I have personally experienced the benefits of outsourcing where housekeeping and security were always a problem at my former school but when the university authorities contracted those activities to an outside company there was immediate and lasting improvement probably due to their expertise in handling such business.
Organizations today are continuously evolving and employing new strategic management techniques to meet their potential. It is common for companies to regularly evaluate their performance through a gap analysis of where they are now and where they wish to be. This instructs their change in strategies and guides them to their goals. Organizations employ strategic management concepts to fill the gap between their actual performance and their potential.
To help an organization make outsourcing decision, it should ask the following questions; after outsourcing, will the company be free to concentrate on its core activity? Will the company’s efficiency be achieved when the organization outsources? Will outsourcing help the company gain a competitive position? Among other strategic concerns (Crown 2011).
As everyone knows, that Outsourcing is an arrangement in which one company provide services for another company that missing or don’t have a specialty on certain area of expertise. Outsourcing is a trend that is becoming more common on information technology and other industries for services that have usually been regarded as intrinsic to managing a business.
Strategic management is the ongoing process of ensuring a competitively superior fit between the organization and its ever-changing environment (Kreitner, G13). Strategic management serves as the competitive edge for the entire management process. It effectively blends strategic planning, implementation, and control. Organizations that are guided by a coherent strategic framework tend to execute even the smallest details of their mission in a coordinated fashion. The strategic management process includes the formulation of a strategy/strategic plans, implementation of the strategy, and strategic control. A clear statement of the organizational mission serves as the focal point for the entire planning process. People inside and outside the organization are given a general idea of why the organization exists and where it is headed. Working from the mission statement, management formulates the organization's strategy, a general explanation of how the organization's mission is to be accomplished. Then general intentions are translated into more concrete and measurable plans, policies, and budget allocations. Implementation is the most important part of the strategy. Strategic plans must be filtered down to lower levels to be success. Strategic plans can go astray, but a formal control system helps keep strategic plans on track. In the strategic management process general managers who adopt a strategic management perspective appreciate that strategic plans require updating and fine-tuning as conditions change. Given today's competitive pressures, management cannot afford to let strategic plans sit as is. A strategic orientation encourages farsightedness. Sun Microsystems Inc. is one company that developed a strategy to become the competitive leader and become the most reliable in the net business. I will explain how Sun's strategy integrates their marketing, management, technology, and service functions into one effective strategy. First I'll discuss who Sun is and what encouraged them to develop their strategy.