Factors Associated With Corporate Outsourcing

There are many layers in between the large and small company; and it is never clear who is working for the outsourced company and their situation. Law enforcement has been known to miss these small companies doing illegal activity because they are so small. There is not enough man power to research and catch all the small tech companies in the act of visa violation (Hamm, and Herbst). The government needs to be more aware of this problem and make a greater effort to investigate any tip about an illegal operation.

Those who oppose the idea of international outsourcing often point to the fact that the low pay for labor in other countries is resulting in a bigger economic gap between America and other countries. However, as Bob Davis and David Wessel point out in their book titled, Prosperity, that the opposite is actually happening. As time goes on other nations increase their pay to workers, as is the case here in America (Davis and Wessel 220). It is important for the world to come together and diminish the current large gap between America and other nations. This will prove to be not only beneficial for Americans, but it will also benefit other countries as well.

Organizations may also want outsourcing providers to require background checks for their employees. Just because the country has IP laws does not mean they will be enforced so it may also be wise to put the responsibility of security on the outsourcing provider by requiring monetary compensation if a security breach occurs.

The size of a company matters when trying to save money and what tasks you decide to outsource (different jobs cost different wages), but generally speaking, a company saves big dollars for sending jobs overseas. And sometimes companies turn to outsourcing as a way to solve the wrong kinds of problems. If the problems are from bad management, outsourcing won’t help. This is something that needs to be resolved inside the company itself, and hiring other types of labor won’t help. A company sometimes sends jobs to other countries that they are not capable of within their budget or when it’s outside your particular area of expertise. Another advantage is that you don't have to become an expert in a particular area--you can depend on the outsourced company to be the expert. You can hire them to deal with 1 branch of your company, and you don’t have to worry about that area of your company (unless they turn out to be incompetent).

Outsourcing can be expensive and have multiple risks; however, in this paper I will identify the possible risks to an organization in each of the following outsourcing situations:

Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with than it is to produce the good internally.

The main reason companies outsource is because it saves them money. Many different types of jobs are outsourced, IT, telecommunications, auto manufacturers, physicians and so on. Outsourcing by General Motors to

Domestic/international sourcing. Several motivations (e.g. cost reduction, flexibility, access to new technologies and skills, focus on core activities) are encouraging them to outsource and/or localize their (IT or business) processes in foreign countries .These choices determine also relevant risks, such as loss of control, poor service quality, vendor dependency, cost escalation, and security criticalities .

There are many pros and cons to outsourcing. Having certain aspects of the supply chain done in another country can greatly reduce costs to the company. While it can increase international productivity at a lower cost, security as well as quality control can be an issue. We will have to take the necessary measures to ensure that database security both in the US and the outsourcing country is in place in order to protect our confidential information. We will also have to ensure that a good quality control program is in place to make sure that our product continues to remain a top product in the industry. Proper training, as well as audits, will need to take place. Ethically, it is important to have someone overseeing employees hired to confirm that proper treatment of employees is taking place. One disadvantage of outsourcing can be reducing of work and environmental standards, and we as a company want to continue to uphold our ethical responsibilities.

Another major issue could be the lack of experience on behalf of the organization hired. The vendor may have never been involved in the industry their hiring business is in. Therefore, a lack of quality of the products/services the business provides will undoubtedly be present. (The Risks and Benefits of Outsourcing Supply Chain Management)When the quality of any business is bad, that means a loss of customers, clients, potential investors, and altogether, the business.

In the current business world, cutting costs and allocating resources with the best quality is one of the most widespread and familiar concepts to many business owners. To achieve proper efficiency and effectiveness, outsourcing seems to be common among different types of businesses, not just ones with larger amounts of profit or total assets. Seeking outside help through various countries is one of the key factors that can assist with the potential reputation of a business because cheap labor and satisfactory quality push for better organizational structures. Benefits such as these have evolved into becoming the norm for companies to follow; in Chapter 6 of Contemporary Management, global outsourcing demonstrates a positive effect on businesses and ties into the notion of globalization, which can connect individuals through overseas market strategies.

When a business makes the decision to outsource there are numerous factions affected. First and foremost is the person or team from within the company who are charged with the task of deciding who they will choose to outsource them. They are termed the “buyers”. Being a buyer is perhaps one of the

Many people imagine only enormous Fortune 500 companies as moving production and jobs overseas. However, in today's weakened economy, even smaller businesses are now opting for outsourcing more and more to keep costs low. Even smaller companies have to deal with complex issues that are normally thought to be dealt with by larger Fortune 500 companies. Yet, despite benefits, there are also high risks involved in outsourcing, risks that go far beyond the boundary of the single organization in questions.

The above are some benefits cited by firms regarding outsourcing, but as it is common with all activities there are negative side effects. The increase in investment risks, including operating and more importantly reputational risk. Poor selection of vendors, lower quality standards and security gaps for confidentiality

Trends in the marketplace can help determine areas a firm can explore to be successful. Use of carefully considered outsourcing can be a critical component of corporate strategy for any multinational corporation. With outsourcing opportunities in front of them, these corporations should first work to understand the demographics and capabilities of the workforce before making any moves. Companies shouldn 't simply resort to outsourcing and assume it would automatically translate to lower costs. It is important to study labor supply and demand, in order to