Outsourcing is a widespread phenomenon in the modern world, and various businesses deal with it. According to Jacobs and Chase (2014), this term refers to conveying the company’s internal activities and responsibilities to outside agents, usually from developing countries. Also known as offshoring, outsourcing is requested now because it provides firms with essential advantages. Thus, the primary purpose of this paper is to comment on the strenghts and challenges that outsourcing can present.
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Somjai (2017) states that the benefits of this strategy include “the ability and time to concentrate on core process, risk-sharing, and cost reduction” (p. 157). At the same time, Jacobs and Chase (2014) present a more detailed insight into the positive effects of outsourcing. On the one hand, offshoring makes it possible to reduce costs with the help of low-cost labor. On the other hand, this phenomenon allows companies to improve their quality and productivity (Jacobs & Chase, 2014). At the same time, it is impossible to mention that outsourcing only offers positive consequences. According to Yeo and Saboori-Deilami (2017), the most significant challenge occurs because of “heterogeneity between the home and host country” (p. 5). In addition to that, it is also necessary to remember the risk of exposing confidential data (Somjai, 2017).
In conclusion, it is possible to mention that outsourcing is a significant element of the modern business world. It is so because this strategy provides firms with essential benefits that contribute to their overall growth. However, it is necessary to remember that offshoring also implies some challenges. That is why if a company wants to deal with outsourcing, it should conduct a careful analysis to predict all the possible advantages and disadvantages of this phenomenon.
Jacobs, F. R., & Chase, R. (2014). Operations and supply chain management (14th ed.). McGraw-Hill Education.
Somjai, S. (2017). Advantages and disadvantages of outsourcing. The Business and Management Review, 9(1), 157-160.
Yeo, C., & Saboori-Deilami, V. (2017). Strategic challenges of outsourcing innovation in global market. Asia Pacific Journal of Innovation and Entrepreneurship, 11(1), 5-16.