Question

As we learned in Chapter 7, management’s decision-making process includes determining the most cost-effective and efficient way to run an organization. In recent years, we have seen outsourcing by manufacturers and service providers is becoming increasingly common.

• Use the Internet and/or Strayer Library to research a firm that specializes in outsourcing consulting.
• Answer the two following questions:
  • What are some of the ways that outsourcing can “strengthen the overall performance of the company”?
  • What are some of the potential problems that arise when companies outsource?

Answer 1

Potential problems that may arise when company outsource

1) Our reputation depends on the quality of others works

2) language barriers

3) Sluggish Response time with slow issue resolutions

4) clients may not be supportive

5) Saturated market

6) disclosure of confidential information to the outsourcing provider leading to a possible security threat

7) Providers may not understand business environment

8) provider slow to react to changes in strategy

9) loss of direct control over company management

10) Reduced sales owing to unsatisfied customers

11) increased cash outflow

How outsourcing can strengthen over all performance of the organisation

1) Helps company to focus on business critical tasks and improve employee output

2) streamlines business operations

3) operating cost reduction

4) you have access to better technology

5) you can focus on core areas

6) provide fexiable staffing arrangements

7) cooperation with specialists from narrow area