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Disadvantages Of Outsourcing

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Disadvantages of Outsourcing Just like any other controversial topic, there are a lot of heated debates over the impact of outsourcing on a company, its employees and the environment it operates in. There are just as many disadvantages to outsourcing as there are advantages, so I decided to focus again on what I believe to be the three key disadvantages of outsourcing: loss of domestic jobs, decentralization of business processes, and ethical challenges.

Loss of Domestic Jobs As in the case of Lufthansa Group, outsourcing can sometimes imply the transfer of jobs between firms and/or nations (Sallaz, 2004). “Media analyses claim that anywhere from 250,000 to 500,000 business service jobs moved abroad between 2001 and 2003” (Little, 2004, …show more content…

Ethical matters are issued in all kinds of activities – whether it is in science or empirical research, in politics or in corporate undertakings – the basic human rights are a controversial subject which more or less everybody is involved in. For companies engaging in outsourcing, this implies that they are under the microscope when it comes to corporate responsibility and the smallest incident can decide over a company’s reputation and whether or not it will be successful in the …show more content…

The prevalence of outsourcing has become “an essential part of business activities in the era of globalization” (Thangavelu & Chongvilaivan, 2013, p. 27). While on the one hand, outsourcing not only saves time and money but also creates opportunities of accessing new resources and exchange technological innovation, on the other hand, it decentralizes more and more business processes and disbands domestic jobs. The heated debate over ethical challenges, particularly over labor legislations, pulls public focus away from the extensive opportunities outsourcing provides. Nonetheless, when weighing the key advantages against the disadvantages (excluding the extent and impact of the ethical debates) it is evident that companies gain from outsourcing in the short-term as well as in the long-term. The planning process of outsourcing itself should involve project risk management (Deering, 2014, p. 17), which would overall allow a company for receiving the highest possible profit of

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