Essay about The Pros and Cons of Outsourcing

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Introduction

This paper is a general overview of outsourcing. It explores when to outsource and what advantages and disadvantages a public manager may face when deciding whether to outsource.

I have chosen references to support this text that are both academic and colloquial. Indeed it was a discovery to learn that "Outsourcing" had become a well-developed academic area of study. My prior study of the subject revolved around personal conversations and non-academic magazine articles.

It may be interesting to note that an internet search using key words, "privatization + government" in both Yahoo and Dogpile failed to bring up a specific government agency devoted to outsourcing or privatization. In the private sector there were
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Examples: everything from construction of aircraft carriers and management of nuclear weapons facilities to provision of landscaping services."

Thus "outsourcing/privatization" may be considered broad encompassing terms while, "contracting out" may be a variant and subcategory in the sense that the goods and services may still be owned by the parent organization. For example, The Navy may have contracted out XYZ Iron Works to build an aircraft carrier, but the Navy still owns it. The Post Office on the other hand is a quasi-independent organization, formerly run by the government but is now privatized.

At other times the "privatization/contracting out" distinction is more apparent. "The researchers found that successful state and local government reform plans seek to eliminate or privatize functions that are not essential. Where privatization is not practical, they introduce competition by contracting out the service."3 In other words, a task is either wholly turned over to a private organization to run or is given partly to a private agency to run for a set period of time. I will explore both of these issues, i.e. "contracting out" and "privatization/outsourcing" as many of the features of both overlap in terms of the decision making of public managers.

Pros and Cons Depend on Organizational Focus

Perhaps the most commonly asked question in reference to outsourcing, particularly from a management perspective, is, "What are the pros and

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