Pros And Cons Of International Outsourcing

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PRATIVA GNYAWALI DAHAL p15121180 By outsourcing facilities to other countries many companies have been able provide services at much lower costs. What are the most common services to be outsourced (examples) and discuss the advantages and risks of outsourcing?

Oxford dictionary explains outsourcing as an act of letting an outside supplier produce goods or service by contract (Oxford Dictionary). Further Banerjee & Williams (2009) defines outsourcing is to buy services from those who is out of your managerial boundaries for unlimited period of times which results in production by different entity for principal company for fixed transaction fee. By these definition it’s clear that outsourcing is something that today’s
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International outsourcing is a most common activity in today’s global world because of uneven geographical structures and availability of resources such as raw materials, human resource and financial resource (Hamed, Kara, & Ibbotson. 2014). “International outsourcing is one of the key activities in global manufacturing, where manufacturers or organizations transfer the products and services previously conducted internally, to an external party in another country” (Horgos, Hätönen and Eriksson, Ellram and Billington. Cited in Hamed, Kara, & Ibbotson 2014 pp. 463.). It’s clear that companies outsource their facilities in other countries to reduce cost in order to increase profitability of the…show more content…
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