Essay on Outsourcing: Companies Should Provide Employment, But Is It Right?

Introduction

Outsourcing relates to the process of shifting work, obligations, and decision rights to another person. Companies should provide employment, as others can do it less expensively, efficiently, and better. Outsourcing has gained growing acceptance among the public since the middle of the twentieth century and has been increasingly contentious over the preceding decade. In the background of different economies, offshore outsourcing is the most significant kind of outsourcing. Outsourcing is one of the most essential practices in the modern industry since many industries are seeking to leverage both sciences, technical, and industrial advances to deliver quality and valuable goods that please customers. Outsourcing in companies contributes to a substantial reduction in costs for producing the final product because each part functions best to achieve this without making extra effort often without investing in new kinds of production (Tuyauova, 2012). This paper seeks to provide a detailed discussion of outsourcing in Company A that is a manufacturing company for technological equipment.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Pros of Outsourcing

The main advantages of outsourcing are; cost savings, exposure to events, improved performance, and versatility are the key benefits of outsourcing. First, all analysts believe that an organization will focus on the tasks which are fundamental to its value proposition and improve its strategic competitiveness by turning over non-core operations to a trusted third party. Second, externalization is typically geared towards one of the key priorities as cost reduction. The unique requirement exists when there is no full-time need for some assets, whether human or equipment capital or if attempts cannot be made to acquire the services. For instance, technological know-how and maintenance are sometimes required for a medium-sized company. If the expense of recruiting and educating an employee with computer technology skills is so high, the organization's investment makes a profit (Tuyauova, 2012).

Thirdly, outsourcing companies are able to gain access to highly qualified personnel not accessible to the company entity to leverage the assets, inventions, and professional skills of the suppliers. Fourthly, the accomplishment of an increased result that the outsourcing company will deliver attributable to economies of scale is a significant factor for international consideration. Large-scale facilities provide a wide variety of tasks and incentives to help support the most excellent workers who do not survive in an atmosphere that is less relaxing. In fact, service providers tend to have a higher degree of operating expertise because personnel turnover becomes greater in comparison to internal operations. Fifthly, versatility is the primary source behind other businesses' outsourcing. Contracts between external suppliers and their staff rely on the degree of versatility to match that market conditions (Smith, 2012).

Cons of Outsourcing

The main failures of outsourced activities are; risks to health and security, production issues, hidden expenses, and the redeployment of internal employees are the main drawbacks of outsourcing. The first is that management of the external assets needs a mix of knowledge in personnel and project management, contract administration, and power bargaining, as the downside of the lack of leverage of the external activities is related to outsourcing. Second, almost any deal has protection and secrecy, but it is still challenging to carry out an audit. In financial markets, information from dealers, investors, and other individuals who may try to use these details illegally are held by investment bankers aware. Third, the presumption of superior support from the external contractor than local workers is a justification for outsourcing. In fact, outsourcers ought to be selected to ensure that the standard of products and services provided will not have a detrimental impact (Smith, 2012).

Fourth, the organization enters an outsourcing deal that includes the specifics of the service it provides. The underpinning for the client to pay additional payments shall be anything not contained in the agreement. An analyst may, for example, intentionally remove costs to benefit one option, including choosing one supplier from another or choosing in-sourcing rather than outsourcing. Fifth, externalization is also attributed to the dismissal in the eyes of workers. It is also a challenge for the top management team of the company to determine whether existing employees can be transferred. During several occasions, a member of the original team has been outsourced (Patel, 2017).

From the above analysis, there are many advantages and disadvantages that a company should consider before considering outsourcing as an option in resolving various issues. There should be critical scrutiny depending on the particular dealings of the company.

References

Patel D (2017). The Pros and Cons Of Outsourcing. Retrieved from https://www.forbes.com/sites/deeppatel/2017/07/17/the-pros-and-cons-of-outsourcing-and-the-effect-on-company-culture/#3297801f562d

Smith, A. (2012) "The Pros and Cons of Outsourcing." UNLV Theses, Dissertations, Professional Papers, and Capstones. Retrieved from https://digitalscholarship.unlv.edu/cgi/viewcontent.cgi?article=2479&context=thesesdissertations

Tayauova G (2012). Advantages and Disadvantages of Outsourcing: Analysis of Outsourcing Practices of Kazakhstan Banks. Social and Behavioral Sciences 41 ( 2012 ) 188-195. Retrieved from https://www.researchgate.net/publication/257715748_Advantages_and_disadvantages_of_outsourcing_Analysis_of_outsourcing_practices_of_Kazakhstan_banks