The Advantages and Disadvantages of Outsourcing

Topics: Outsourcing, Business process outsourcing, Globalization Pages: 4 (1433 words) Published: April 25, 2008
What are the advantages and disadvantages to outsourcing in the global marketplace?

In these times of great globalization where many countries have erased their borders when it comes to trade outsourcing has become an option for many companies. Whether or not to outsource is a key question that companies must consider. According to the Pros and Cons of Outsourcing, “The decision to outsource or not is a matter of finding the right balance-the balance between managing labor costs, workflow, employee capabilities, customer commitments, core competencies, and even short- and long-term risks.” (Motley-Saunders, p.1) There are many advantages and disadvantages to outsourcing. These advantages and disadvantages will be discussed in this paper.

There are many advantages of outsourcing. Many companies like to outsource because they cannot afford to hire people with the expertise to do it internally. Therefore outsourcing can help reduce cost because the company doesn’t have to increase their payroll because they can spend less by outsourcing certain contracts. Looking from a business standpoint, all companies want what is the best for the company and therefore expertise is needed and sometimes a company may have to get expert help by outsourcing. With increased competition in our global economy, outsourcing will help companies by giving them a chance to focus on other driving factors that will increase the company’s performance.

Outsourcing offers a different perspective other than that of the company’s. This will help the company by ensuring that there will not be any bias or favoritism because the company that handles the outsourcing is an external company and therefore hold no bias. This will ensure more effective decision making since the outsourcing company can perform its duties without any personal preference or bias. Another perspective can also open the door to many new ideas.

Outsourcing will enable the company to save money because with...

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