Busn4100 Business Research Methods And Assessment Answers

Answer:

Introduction

Outsourcing in simple terms is a transfer of some managerial functions to a third party.  If a business gives another third party some of its functions, it is simply said they have outsourced.  In this globalized world businesses have realized the importance of outsourcing.  As a business grows by leads and bounds it becomes a bit impossible to manage some of its functions and in this scenario it is important to outsource some functions.   To off-load some of the functions that are becoming complex to the business, it has become necessary to outsource some of the business functions (Bucki, 2017, P.5).    Further, most businesses today want to reach out to various markets across the world, but again starting a business in a foreign country is an expensive affair.  Therefore, for a business to operate in many countries they have to outsource or franchise some of its units.  All in all, outsourcing has become the in-thing in the business circles.

• Project Objective

The main objective of this research is to discuss some of the advantages and disadvantages of outsourcing.  Indeed, outsourcing has been able to work to some businesses but some businesses have not been able to realize some of the benefits that come from outsourcing.   However, there are reasons that make business to opt to outsource.  One of the reasons is reducing the operating costs that come with the complexity of the business.  

Yes, some businesses think that the only way they can prevent the skyrocketing operating costs is by outsourcing.  However, this decision sometimes may result to reduced operating costs to the business, but on the flipside it may not.  That is why this research seeks to know both outcomes of outsourcing.  When businesspersons understand the outcomes of outsourcing they would definitely be prepared to develop measures that would prevent the negative outcomes of outsourcing (Cui, 2016, P.9).

Another reason for outsourcing is to better the focus of the company.  Sometimes a business a company may start making losses and in all honesty there is no business that is prepared to make losses. In this situation where a business is making losses it confirms that the business has lost focus and to return it to focus some a company is obliged to outsource some of its functions so that the new management can streamline and improve the profitability of the business (Kremic, Tukel & Rom, 2016.P.8).  The point in this case is that companies would always outsource objectively to get the right focus that can deliver them to profitability.

Businesses would also outsource so that they can fully utilize their resources.  There are businesses that have had a huge potential to make numerous profits but that has not been possible to some large extent.  The reason that has not been possible is because businesses have not outsourced to those businesses that have the ability to give them an opportunity to make massive profits.

In a nutshell, the point that is being driven here is that the paper wants to look at the advantages and disadvantage of outsourcing. Because, there is has been a wide perception that outsourcing has positive outcomes only, but this paper would objectively put it clear that it has demerits as well.

• Project Scope

Outsourcing is a multifaceted topic and that is why this report seeks to exclusively discuss it.    The report in all ways first defines outsourcing.  In the introductory part, the report has simply mentioned what outsourcing is all about.  After discussing the advantages of outsourcing the report also seeks to explain some of the disadvantages of outsourcing.  As indicated in other sections of the report anything that has advantages would equally have some disadvantages.  

Besides, the report also seeks to give reasons why businesses opt to outsource some of its functions.   Indeed, outsourcing is happening in various companies for some reasons.  However, many companies have different reasons for outsourcing.  For instance there are some companies that would outsource with an aim of reducing some of its brands.  A company like P &G, previously had more than 150 brands, but after realizing that there are too many and impairing their operations they decided to reduce to 60 brands.  That is to suggest that there are some companies that opt to outsource objectively to reduce itself to a level where they can operate effectively.

Further, globalization has greatly impacted the decisions on outsourcing.  Today, businesses are on pressure to expand their operations beyond their borders.  But it is not  an easy task to expand a business’ operations to foreign capital.  Investing in a foreign country comes with various challenges.  Nevertheless, businesses that are today lucky because they can use outsourcing to penetrate into markets they have always wanted to access.  That is to say that globalization is greatly impacting the decision making on outsourcing.

 Most importantly, there are some requirements that must be met for a company that seeks to succeed its outsourcing efforts (Pope, Key, & Saigal, 2015, P.5).  In this area, the objective is to succeed the outsourcing efforts that is to say that those businesses that need to enjoy the benefits of outsourcing should consider these requirements.  The first requirement is that the company outsourcing should be very clear on the goals and objectives it has as far as outsourcing is concerned.   Remember that outsourcing is entirely relies on honesty and sometimes the people that would be allowed to manage some functions can fail to execute their mandate.

Further relationship management is key to succeeding outsourcing.  That is to suggest that businesses that want to succeed in outsourcing should be in an excellent position to build a cordial relationship with the managers that would be allowed to manage some aspects of their business (Glaister, 2013, P.7).   The point is that a company needs to ensure that the relationship management is wonderful so that outsourcing can succeed.  Anyway, outsourcing needs a successful relationship management in order to succeed.

• Literature Review

In the literature review, onshore outsourcing and offshore outsourcing.  Onshore outsourcing is also known as domestic outsourcing.   Onshore outsourcing is where a business hires services from some people or business to manage its operations within the country.  That is to suggest that a business will go beyond its internal stakeholders to seek the services from other sources.  In essence, the point is that onshore outsourcing does not go beyond the boundaries of the country, but again the company would go beyond its employees and key stakeholders to seek proper management from other people.  For sure, there are so many factors that would influence the decision of a company to consider hiring the services outside the company just within its country.   If it is evident that there are people who can offer the best services that would turn around the operations of the company for the better then it is important to consider hiring someone within the country to manage it.

Contrastingly, offshore is where the business goes beyond its borders to seek the services of a company or manager to run and succeed its operations.   As indicated earlier, globalization impacts outsourcing and that is why it has been possible to achieve this kind of outsourcing.   For instance, if a company in the United States of America has been unable to manage its operations and it believes that its success can be achieved if they outside some of their functions to a certain person or business in a country like the United Kingdom, them that is offshore outsourcing.

Some of the key reasons why businesses do offshore outsourcing is the belief that it would open their access to foreign markets (Alexander, 2012, p.3).  Indeed, today most businesses want to go beyond their borders to make a killing.  In such a situation, it is ridiculous not to consider hiring the services of a company that is multinational and has succeeded in foreign markets.  Nonetheless, offshore outsourcing may have its own challenges, and that is why it is vital to build a formidable and cordial relationship management.  When the relationship with the foreign managers fails then outsourcing would be detrimental to a business.   The point is that business wanting to outsource should in a perfect position to establish the right managers that would propel them to some significant success.

Reasons companies outsource

As indicated earlier every company has a reason why it outsources. First reason is to seek a talent and skills that would make some of their outsourced functions successful.   In general terms, most businesses outsource to increase their efficiency and reduce the labor costs.  It is not easy to manage a business with various functions, and sometimes a business can failure due to its failure to manage its functions properly.   Most importantly, businesses outsources when they seek efficiency that would in all probability propel them to profitability that any business seeks.

Reasons why businesses do not outsource

Outsourcing is a practice that many businesses would want to implement, but again there are also businesses that would not want it (Bucki, 2017, P.5).  Fear of failure is a reason why some business does not want to outsource. Also, there is a likelihood of mismanagement which in all senses discourages some businesses from outsourcing.

In addition, businesses that do not want to lose control over its operations would always find not necessary to outsource their services.  In all honesty, if a business can internally manage itself, why should it consider outsourcing?  It is not important to consider outsourcing services if the company has a firm belief that it can manage its operations and control every aspect of its business.

This very section would also mention some advantages and disadvantages of outsourcing.  Outsourcing would result to creation of employment, increased efficiency, improved profitability, and cost saving (Patricia, 2017.P.45).  In terms of disadvantages, it is subject to mismanagement, loss of labor to other countries and generally a country that is developing would not be willing to outsource its services to foreign country.

• Research Questions/Hypothesis

Primary question: Are the benefits of outsourcing attracting businesses to consider it?   This is a fundamental question and throughout the research, answers shall be provided.

Secondary questions- Is outsourcing the solution to challenges businesses are facing?  Is globalization the reason why businesses are considering outsourcing?  What are the impacts of outsourcing on an economy?

• Research Design and Methodology

In this research qualitative research shall be used.  To understandably speak about outsourcing qualitative research should be used.  All the advantages of outsourcing can be established through secondary sources.  Through reviewing the literature available on outsourcing, it is possible to understand the theory aspect of outsourcing.   In essence, qualitative research gives information about the definition of outsourcing, and other concepts surrounding it.

However, in this kind of research some interview should be conducted with an individual who understands outsourcing in practice.  There are many businesses people who have an in-depth understanding of outsourcing and how it is defining the business operations.   

Nevertheless, quantitative research should also be used.  In this research, some of organizations that have outsourced shall be sampled and from the report regarding its achievement should be analyzed in terms of figures.   Profitability can be a dependent variable in this research.  In this case, the earnings of a business can be represented on a graph to establish how it has been able to increase its earnings since outsourcing.

Sampling is one method of data collection that can be used.  In sampling, companies can be picked randomly to analyze how they have performed since outsourcing.

• Research Limitations

The first limitation is reading all the secondary data on outsourcing.  It is not an easy task to research and it is indeed difficult to read and analyze all the information accessed.  It is also time consuming to draw graphs and analyze them.

• Time Schedule/Research Plan

This research requires one week.  Gleaning information from internet is time consuming and that is why a whole week is required to develop an excellent write up for the topic.

Conclusion

In conclusion, outsourcing is a business practice that most businesses are adopting today.  Businesses believe that outsourcing would help it grow by bounds and leaps and ultimately the business would be able to make some significant profits.  However, proper decision making should be considered before outsourcing some of the functions of a business.

References

Alexander, K. (2012). Why auditors and public companies need international regulation. Amicus Curiae, 2002(42).

Ashby, S., Chuah, S., and Hoffmann, R., 2004, “Industry self-regulation: a game-theoretic typology of strategic voluntary compliance”, International Journal of the Economics of Business, 11(1), 91–106.

Bucki, j. (2017). Compelling Reasons Outsourcing Is Wrong for Your Company. [online] The Balance. Available at: https://www.thebalance.com/top-6-outsourcing-disadvantages-2533780 [Accessed 27 Apr. 2017].

Cui, Z. (2016). The Impact of Switching Costs on the Outsourcing of Knowledge-Intensive Business Processes. Decision Sciences, 48(1), pp.71-107.

Duck, T. (2006). Why outsource the compliance function?. Journal of Investment Compliance, 7(3), pp.67-69.

Fariborzi, E. (2012). E-mail Marketing: Advantages, Disadvantages andImproving Techniques. International Journal of e-Education, e-Business, e-Management and e-Learning.

Glaister, A. (2013). HR outsourcing: the impact on HR role, competency development and relationships. Human Resource Management Journal, 24(2), pp.211-226.

Globaloutsourcingagency.com. (2017). Advantages and Disadvantages of Outsourcing. [online] Available at: https://www.globaloutsourcingagency.com/adv.html [Accessed 27 Apr. 2017].

Gnuschke, J.E., Wallace, J., Wilson, D.R. and Smith, S.C., 2004, “Outsourcing production and jobs: costs and benefits”, South Dakota Business Review, 62(4), 1-7.

Khan, A. (2012). Offshore Software Development Outsourcing Contract from Vendors’ Perspective: A Systematic Literature Review Protocol. IOSR Journal of Computer Engineering, 2(4), pp.26-37.

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Kermani, F., 2004, “The future looks outsourced”, Pharmaceutical Technology Europe, November, 19-24.

Kremic, T., Tukel, O.I. and Rom, W.O., 2016, “Outsourcing decision support: a survey of benefits, risks,and decision factors”, Supply Chain Management, 11(6), 467-482.

Lacity, M. and Rottman, J. (2013). The Impact of Outsourcing on Client Project Managers. Computer, 41(1), pp.100-102.

Lisle, C. (2013). Outsource a Core Competency?. The Journal of Private Equity, 7(1), pp.72-75.

Phelps, T. and Fleischer, M., 2012, Strategic outsourcing decision guidebook, Altarum Institute, Michigan.

Patricia, P. (2017). Advantages and Disadvantages of Outsourcing. [online] Smart Church Management. Available at: https://smartchurchmanagement.com/advantages-and-disadvantages-of-outsourcing/ [Accessed 27 Apr. 2017].

Pope, J., Key, K. and Saigal, A. (2015). Nonprofit Outsourcing Patterns: Why Don’t Small NPOs Outsource More?. Journal of Nonprofit & Public Sector Marketing, 27(1), pp.99-116.