Key Concept Explanation: Outsourcing is a significant topic in relation to operations
management. Organizations typically utilize outsourcing for a variety of reasons.
Outsourcing offers many benefits for not only an organization but for the economy as
well. Outsourcing is a prevalent practice that organizations use involving contracting
suppliers to execute a variety of tasks that often include information technology
services, human resources, finance, production and customer service activities (Babin,
Bates & Sohal, 2017). While outsourcing usually comes with many advantages, there
are also some disadvantages that come along with its practice as well. However, I am
interested in learning more about this topic because outsourcing is such as prevalent
practice throughout many different industries and business fields.
Comparison: The text defines outsourcing as “the practice of contracting with
external suppliers for goods and services that were formally provided internally”
(Meredith & Shafer, 2017, p.175). Outsourcing plays a crucial role in effective supply
chain management, as it can be utilized for a variety of different activities. For instance,
Nike uses global outsourcing to take advantage of cheaper production costs for their
shoes (Meredith & Shafer, 2017). Furthermore, for many organizations, the practice of
outsourcing relevant value chain functions to specialized providers serves as a strategic
tool in order to enhance current performance (Lahiri, 2016). As operating costs continue
to change in the dynamic business environment of today, organizations continue to lean
on both outsourcing and offshore outsourcing in order to sustain and ensure the viability
of their business (Lahiri, 2016).
There is always the potential for a certain amount of risk involved when making
business related decisions. As mentioned previously, outsourcing has many benefits.
However, for many organizations, their endeavors into outsourcing are not always
successful. Unfortunately, a lot of outsourcing failure comes as a result of inappropriate
decisions from the organization as well as misestimated risk levels by management
(Chen, Yan, Liu & Xing, 2017). For instance, in many industries the market has a high
degree of uncertainty associated with it, which increases risk levels. Furthermore,
another concern of outsourcing comes from a debate on whether or not research and
design innovation should be outsourced (Un & Rodriguez, 2018). Many argue that
outsourcing research & development can have a negative impact on an organization’s
innovation creation because it can hinder the ability of a business due to such a heavy
reliance on others (Un & Rodriguez, 2018). Ultimately, it is up to an organization to
make the right decisions when it comes to what activities should be outsourced within
Article Summary: The article discussed the various effects that outsourcing
strategies can have on the performance of both small and medium scale enterprises
(Agburu, Anza & Iyortsuun, 2017). Today’s business environment is continuously
changing and evolving for the better. For is reason, organizations often have to change
the manner in which they do business in order to remain competitive and viable.
Outsourcing is a strategic management tool that is used in order to move in house
activities to subcontracting external agents (Agburu, Anza & Iyortsuun, 2017).
Outsourcing is beneficial because it provides organizations the opportunity to
concentrate on their core competencies and other significant activities that will help
them to provide value for their consumers (Agburu, Anza & Iyortsuun, 2017).
Traditionally, outsourcing was used for less important activities such as
cleaning, catering and security activities. However, today, outsourcing is utilized in a
variety of more important organizational areas such as manufacturing, various
operations activities and research and development endeavors (Meredith & Shafer,
2017). Typically outsourcing activities are generally grouped into four areas which are
back office activities, primary activities, accounting activities and support activities
(Agburu, Anza & Iyortsuun, 2017). Furthermore, outsourcing can help an organization to
increase the effectiveness and efficiency of their operations. Strategic outsourcing can
also be used to reduce costs, reduce capital investments and improve the organizations
responsiveness to changes occurring within the business environment (Agburu, Anza &
Biblical Integration: Outsourcing is a popular practice in business today.
Outsourcing is used for a variety of reasons as it has many advantages. The bible says
“ask, and it will be given to you; seek, and you will find; knock, and it will be opened to
you” (Matthew 7:7). For organizations seeking to utilize outsourcing, the potential
benefits include cut costs, reduced turned around times and increased flexibility.
Because there is often significant risk involved with outsourcing, organizations must
outweigh the pros and cons of their decisions in order to create the most value for their
consumers. The bible says “serve wholeheartedly, as if you were serving the Lord, not
people” (Ephesians 6:7). Furthermore, outsourcing is increasingly popular in today’s
business environment as it can help organizations to obtain ultimate success. “All hard
work brings a profit, but mere talk leads only to poverty” (Proverbs 14:23). In order to
maintain success, organizations must be willing to take advantage of practices such as
outsourcing that can help to create competitive advantage.
Application: Outsourcing is a very common practice in today’s business world.
When applied in real world settings, outsourcing can be used for a variety of significant
activities. It is up to the specific organization and its management to decide what
activities should be outsourced and what should be kept in house. For instance, Nike
one of the world’s largest brands, is known for utilizing outsourcing activities in order to
produce their products overseas (Meredith & Shafer, 2017). This practice is
advantageous for Nike because they can benefit from producing their products at lower
costs. Outsourcing their production activities also provides the organization with more
flexible operations that will allow them to better service the needs of their consumers.
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