International Business Perspective Essay

The source of the article is EBSCOhost. The issue at hand is about the increased role of global outsourcing in the development of a new product that has a great impact on both innovation and commercialization (Marion & Friar, 2012). Due to an increase in competition, firms are required to be innovative through research and development. However, the risks associated with research and developments are high. Further, the rates of product and service failure are high. To ensure innovative efforts are leaner and more effective, most of the companies have embarked on outsourcing. Outsourcing helps the firms to gain both short-term and long-term welfares.

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The article focuses on the importance of outsourcing to ensure lean innovation is enhanced. The article explores the commercialization of resources and outside innovation from hiring employees by contract to engaging manufacturers in the short-run (Marion & Friar, 2012). The research focuses on four areas that include developing a robust strategic partnership with outside partners, utilizing prototyping resources in supporting agile development and use of manufacturers in testing products and markets in the short run before increasing the volume. Lastly is the use of expert contractors to reduce human resource cost. From the study, outsourcing helps firms to reduce costs of research and development, enhance innovation and build strategic networks critical to sustained growth. For a majority of successful companies, outsourcing was a core strategy that steered the firms to innovation. Rapid prototyping allows teams for product development to have access to the latest technologies to develop iterative prototypes faster and cheaply (Marion & Friar, 2012). Outsourcing innovation lies in its ability to increase research and development team network at low cost and produce results quickly compared to traditional methods.

Conclusion

With the advancement of technology and emergent of new ones, outsourcing has become a viable option for firms to increase their competitions. The companies reduce the cost of producing goods and services by use of cheap labor overseas (Roy & Sivakumar, 2012). Personnel may be hired in contracts, and this reduces the cost of paying employees for a long term. Outsourcing enhances innovation and this result in improving the quality of products. Firms focus on product development at a low price that promotes greater productivity. Companies increase strategic networks vital to sustainable growth (Roy & Sivakumar, 2012). They can engage manufacturers or suppliers to provide them with the necessary materials required by an organization. Outsourcing enables firms to respond faster. If the volume increases, it is possible to hire personnel in short-term contracts, and this improves the outcome and reducing the cost.

References

Marion, T. J., & Friar, J. H. (2012). Managing Global Outsourcing to Enhance Lean Innovation. Research Technology Management, 55(5), 44-50. https://doi.org/10.5437/08956308X5505053

Roy, S., & Sivakumar, K. (2012). Global Outsourcing Relationships and Innovation: A Conceptual Framework and Research Propositions. Journal of Product Innovation Management, 29(4), 513-530. https://doi.org/10.1111/j.1540-5885.2012.00922.x