Question

In: Operations Management

1. One of the measures used to reduce the costs of expatriation was to outsource elements...

1. One of the measures used to reduce the costs of expatriation was to outsource elements of the administration function to external service providers. Please discuss the advantages and disadvantages of such policy?

Solutions

Expert Solution

Outsourcing elements to the external service provider is a situation in which company try to move out some of the function such as human resource etc to the external vendor or service providers.

Advantages of outsourcing elements of the administrative functions to external service providers are :

a. Expertise : Due to outsourcing, the company can hire the expert to do the work and focus only on the core business activities so that they can achieve the competitive advantage in the marketplace.

b. Cost saving : As outsourcing reduces the cost associated with the hiring, retaining the employees, office space expenses etc as the elements are outsourced to the external service provider and free up the resources of the company for other purposes.

Disadvantages of outsourcing elements of the administrative functions to external service providers are :

a. Security and legal compliance : Due to outsourcing the activities issues regarding protecting the important and confidential documents can be complicated while the issues regarding legal compliance can arise.

b. Quality control : As outsourcing provides less control over the process where external service provider takes care of the administrative function, due to which the quality control over the process can be difficult for company leading to disssatisfaction of employees and customers.


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