Outsourcing and Global Sourcing
According to Entrepreneur.com, the term "outsourcing" refers to "the practice of having certain job functions done outside a company instead of having an in-house department or employee handle them," (2011). While in the past, these job functions have been limited to menial or highly technical tasks, the consensus among outsourcing researchers is that commercial corporations are beginning to outsource large portions of corporate functions, which in turn allows them to cut costs and provide a wider, truly global range of resources for their clients and developers, hence the term "global sourcing" (Kumar & Sarangan, 2011). Nonetheless, there are those who caution against outsourcing too many functions, as the key to successful outsourcing is the effective management of outsourcing suppliers (Chung, Yam & Chan, 2004). This topic is of particular interest to me as a business student likely to work in for a corporate entity in the future. Contingent on the nature of my position in a corporation, knowledge of the benefits and risks of global sourcing could be valuable.
My research of the subject of global sourcing consisted of reading and evaluating the following five articles: "Outsourcing to an Unknown Workforce," by Par J. Agerfalk of Uppsala University, and Brian Fitzgerald of the University of Limerick (2008); "Networked enterprise: A new business model for global sourcing," by Walter W.C. Chung, Anthony W.K. Yam, and Michael F.S. Chan (2004); "The impact of corporate outsourcing on company value," by David J. Bryce and Michael Useem of the University of Pennsylvania (1998); "Antecedents and performance consequences of international outsourcing," by Michael J. Mol, Rob J.M. van Tulder, and Paul R. Beije (2005); and "Leveraging Outsourcing during Economic Uncertainty," by R. Arun Kumar and Sunder Sarangan of Infosys Technologies Limited (2011). While Agerfalk and Fitzgerald assert that global sourcing -- i.e. "opensourcing" -- is becoming a popular method of decreasing spending and enhancing competitive abilities among major corporations (Agerfalk & Fitzgeral, 2008), Chung et al. stress that effective management of outsourcing suppliers and outsourced products/services is the key to profitable outsourcing (Chung et al., 2004). Similarly, Bryce and Useem discuss the potential risks of excessive outsourcing, but still assert that properly managed outsourcing "reduces operating cost, enhances competitive strategy,...
Conclusion It seems that global sourcing is best way to go when expanding the business even though, domestic sourcing will provide familiar suppliers. "For example, Wal-Mart identifies common products used throughout the world and "determines whether there is an opportunity to improve quality, reduce costs and, by working with a best-in-class supplier, achieve better replenishment and new item introductions (1)." For instance, Wal-Mart has worked with its copy-paper sales supplier to
Global Sourcing DecisionsGlobal sourcing opens up a wide array of opportunities for businesses, although it comes with significant challenges. Issues range from cultural differences, which may include language barriers and varying business practices, to quality control, where ensuring consistent quality becomes difficult due to geographical dispersion. Political and economic stability of the sourcing country can also be a concern, as instability can lead to supply disruption or cost increases. Managing
Outsourcing The Impact of Outsourcing on Information Technology in the U.S. The greatest impact of outsourcing has been the decrease in the number of jobs in U.S. And this is only a continuation of the process that had begun earlier with the contracting of jobs by the large companies to small suppliers. Only now the jobs are going overseas and this is hurting the chances of certain categories of Americans from getting
Outsourcing in a Global Community "Even though 'Outsourcing' has its demerits and has been criticized the benefits which it brings is advantageous to the U.S. both now and in the long run." This statement identifies a claim of fact showing that even though outsourcing has its demerits as any other condition would entail, the benefits which the U.S. economy would achieve by way of outsourcing is much more than its disadvantages and
Outsourcing: "The Effects on Pratt & Whitney vs. Other Global Airline Vendors" Aviation maintenance is the basic issue. Therefore the process of aviation maintenance and its issues have to be seen in the light of outsourcing. There are many systems in the regular maintenance of aircrafts other than mere issue of parts and replacements. It is in this light that the problems and position of the airline vendors ought to be
To be sure, serious obstacles still remain in Europe -- most notably, the rigid labor laws that make relocating jobs a long and costly process. For example, while it's relatively easy for companies in the U.S. To fire employees whose jobs they want to outsource, to lay off an employee in Germany, a company first has to justify its decision to the union and then give its worker a
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