The Pros And Cons Of Global Outsourcing
Nowadays, international competition is growing rapidly, and companies must always remain ahead of the competition to ensure its survival. Therefore, companies must keep pace with the rapid changes and dynamic conditions, to innovate, and adapt to new systems, techniques and technologies. In a competitive market environment, customers are increasingly aware and tend to require a number of custom products at a certain speed. In addition, fluctuations of national economies into the global economy and create significant risks. Because of all these factors in today's competitive environment, companies have begun to make radical changes in management structures and production. They should also reduce the costs of maintaining its current market position. …show more content…
Global outsourcing enhances the competencies of firms while also making firm structures more flexible.
In today's global marketplace, companies must use new methods to maintain their strength and compete. In recent years, under the influence of this intense competition, global outsourcing has become popular for businesses. Companies are widely using outsourcing to adapt to rapid changes, to reduce the effect of fluctuations and take advantage of know-how and current technologies. Global Outsourcing allows companies to develop their core competencies and expand their flexibility. Outsourcing is one of the responsibilities of procurement departments and plays a critical role in the survival and growth of the organization. Global outsourcing is the situation where companies outsource a process or function to another company. Any business process that can be done from an offshore location can be outsourced. This includes features such as transaction processing, payroll and order and inventory management, to name a few. There is a lot of call center services
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First, firms have replaced vertical integration with increased outsourcing based on the conviction that lean, flexible enterprises that focus on their core competencies perform better (Quinn & Hilmer, 1994). Second, in the era of globalization of the 1990s, enterprises were advised to use the principles of “global outsourcing” to pick the best global suppliers and thereby to improve their competitiveness (Monczka & Trent, 1991; Quinn & Hilmer, 1994). Implementing both or either of these strategies has important consequences for the structure and performance of multinational
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