Outsourcing Advantages And Disadvantages

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Outsourcing is a plan in which one company gives administrations responsibility to another company to solve their problem. According to Power et al (2006, P1) “Outsourcing is made of two words-‘out’ and ‘sourcing’.” Outsourcing means involvement of distribution of work to host-country. It is short term project which involves delegation of works and responsibility to third party to attain organizational goal. It is the easiest medium to manage the administrative work like resource management, planning and decision making. The organization outsourcing is referred as the client, the organization handling in planning and decision making is refer as the vendor and aim of the work is project. According to Bersin & Associates (2005) research, …show more content…

It benefits the organization to save their time as expertise technical staffs are hired. It helps the regular staff to have job security. It also helps to save the cost such as manufacturing and training cost of an organization. Thus, the organization can gain productivity though saving cost and time. Outsourcing helps to compete among other manufacturing companies to produce innovative products to their customers. Outsourcing also helps in-house staff to utilize their time for planning and decision making for marketing their products and providing customers services …show more content…

Evaluation of overall budget should be consider by the organization while outsourcing. Bersin clearly states benefit of outsourcing in his study that renowned organization like apple use international contractors to designed internal system of the iPod, selling 100 million iPods worldwide. It helps the staff to focus on core area development and many projects. Organization can save time in decision making and gain productivity outputs from the outsources workers. The economy of the county is boost as international companies are willing to provide employment opportunity to the host countries. Whereas, side by side its limitation include maintaining budget, as challenging task as it requires huge budget to hire professionals and most organization doesn’t know how to maintain their budget for outsourcing. Difficulties in decision making and planning between leader parties is another its drawback. Also, decentralized decision making among leaders create dispute among the staff which is not beneficial for organization in long

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