Question

Is outsourcing a valid business strategy?

Why? In what situations have you seen outsourcing used?

When would there be a moral or ethical issue with outsourcing?

What are the risks of outsourcing?

Answer 1

Yes, I believe that outsourcing is a valid business strategy because there have been situations in business where one organization does not possess the required resources to setup a particular operating unit for which they can actually outsource the same to an organization who is a professional in the field. for example an organization may outsource their IT solutions to an organization who are professional in the field. In such situations outsourcing is used for mutual benefits of both the organization.

Moral and ethical issues regarding outsourcing may occur if the organization possess the resources and is working on it but feels that it is costing more to the organization and they will save more if they outsource. In such cases if they are outsourcing the same to a different organization then the employees in the organization may lose their job which is totally unethical.

There are various risks of outsourcing and the primary risk is export of control and data of the organization to a different organization that may lead to the possibility of a weak management. Along with that there are other risks are Uncertainty of business, hidden costs, etc.