What are the advantages and disadvantages to outsourcing in the global marketplace?
In these times of great globalization where many countries have erased their borders when
it comes to trade outsourcing has become an option for many companies. Whether or not
to outsource is a key question that companies must consider. According to the Pros and
Cons of Outsourcing, The decision to outsource or not is a matter of finding the right
balance-the balance between managing labor costs, workflow, employee capabilities,
customer commitments, core competencies, and even short- and long-term risks.
(Motley-Saunders, p.1) There are many advantages and disadvantages to outsourcing.
These advantages and disadvantages will be discussed in this paper.
There are many advantages of outsourcing. Many companies like to outsource because
they cannot afford to hire people with the expertise to do it internally. Therefore
outsourcing can help reduce cost because the company doesnt have to increase their
payroll because they can spend less by outsourcing certain contracts. Looking from a
business standpoint, all companies want what is the best for the company and therefore
expertise is needed and sometimes a company may have to get expert help by outsourcing.
With increased competition in our global economy, outsourcing will help companies by
giving them a chance to focus on other driving factors that will increase the companys
performance.
Outsourcing offers a different perspective other than that of the companys. This will help
the company by ensuring that there will not be any bias or favoritism because the company
that handles the outsourcing is an external company and therefore hold no bias. This will
ensure more effective decision making since the outsourcing company can perform its
duties without any personal preference or bias. Another perspective can also open the door
to many new ideas.
Outsourcing will enable the company to save money because with outsourcing the
company only seeks external help when they need it so unlike internal workers who are
always being paid whether or not the workload is heavy or not outsourcing is only sought
when help is needed. Companies who outsource are able to more efficiently use their
resources and take on bigger tasks because they are able to lean on external assistance and
expertise.
With different markets in the global market, a lot of money can be saved by outsourcing to
countries where it may cost less to get assistance and expertise. Companies can save a lot
of money if they outsource by lowering their cost of labor by giving out contracts to
