Attached.

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Corporate Global Outsourcing Experiences - Outline
Thesis Statement: A review of the experiences of large corporations that have successfully
outsourced different aspects of their organization is necessary for gaining a better understanding
of the pitfalls of the initiative and the approaches that can be used to avoid them. Finally, the
information derived from such an analytic could serve as inputs to the decision-making processes
used by governments for developing policies with adverse impact on the business environment
that are essential for outsourcing
I.
II.

Introduction
The imperatives for global outsourcing

III.

Critical success factors for global outsourcing

IV.

Conclusion


Running head: CORPORATE GLOBAL OUTSOURCING EXPERIENCES

Corporate Global Outsourcing Experiences
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CORPORATE GLOBAL OUTSOURCING EXPERIENCES
Corporate Global Outsourcing Experiences
Introduction
Global outsourcing has undoubtedly become an integral element of the strategic
management initiatives of large corporations because of its capacity to allow the production of
goods and acquisition of professional services without the conventional barriers that hinder the
derivation of economic benefits through reduced prices. Although labor unions, political officers,
and the unemployed are against the utilization of the concepts by companies due to its impact on
the labor market and the domestic of the outsourcing nation, the need to outsource across
geographic boundaries is organizations to the redefine their outsourcing plans. Also, the
increasing rate of advances in technology and changes in the political and business landscape of
the global economy is encouraging companies to review their adoption and utilization of the
professional and manufacturing services that are provided by third-service providers. Meanwhile,
a review of the experiences of large corporations that have successfully outsourced different
aspects of their organization is necessary for gaining a better understanding of the pitfalls of the
initiative and the approaches that can be used to avoid them. Finally, the information derived
from such an analytic could serve as inputs to the decision-making processes used by
governments for developing policies with adverse impact on the business environment that are
essential for outsourcing
Imperatives for Global Outsourcing
Management executives of small and large firms are always looking for ways to reduce
their cost of production thereby maximizing their short and long-term profitability and maintain
competitive advantages. The desire for the implementation of this solution to organizational

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CORPORATE GLOBAL OUTSOURCING EXPERIENCES
challenges is increased by the bad economic situation in the country and the high rate of
unemployment in international markets. According to the outcome of a survey conducted by
Oshri, Kotlarsky, & Willcocks(2015), on the adoption of outsourcing as a global approach, over
80% of the executives of American companies that interviewed noted that the initiative
contributed between 20 to 40 percent reduction in production cost. The imperative for the
outsourcing in the United States is further boosted by a high rate of global competition that has
compelled companies operating in the market to outsource several functional units of the
manufacturing process to offshore companies that can produce this product at lower cost. For
example, the decision by Apple Inc. to outsource the manufacturing of its computer and mobile
products to original equipment manufacturers in Asia is due to the need to maintain the premium
quality of the products and sell them at affordable prices to their global consumers. The former
CEO of the company stated that decision reduced the operational cost for factory workers by
40% if the production plants had employed American workers.
Furthermore, the imperatives for outsourcing increased in the decade after the financial
crisis that affected the global economy because of the requirements by the regulators of emerging
markets to increase the domestic production of goods sold in their country. Aside from the
opportunities derivable from the entry into new markets that the legislations and trade
regulations afforded these global brands, they eliminated the cost of logistics and transportation
to distant markets. For example, it is cheaper for a U.S. company that manufactures its products
in China to supply same to different markets across the region than distributing them from a
North American plant. Similarly, a production in Mexico or any of the Latin American countries
would incur lower logistics and distribution cost to the United States and Canada than the one in
South Asia (Fratocchi, Di Mauro, Barbieri, Nassimbeni, & Zanoni, 2014). Therefore,

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outsourcing has not only become the most appropriate global expansion measure but one that
increased the ability of large corporations to meet the needs of their consumers.
Critical Success Factors for Global Outsourcing
Experts consider outsourcing as a tangible value creator for the companies that adopt the
concept as one of the integral components of their strategic initiatives, as well as the service
providers that deliver the services. Meanwhile, information from the lesson learned by successful
procuring entities revealed that certain factors are required for accomplishing the corporate
objectives and goals for implementing the initiative. Therefore, this section of the paper would
focus on the drivers for successful global outsourcing that are derived from the analysis and
reviews conduction by scholars in international business management and logistics.
In the opinion of Manning (2014), structural changes in the organization are the
foundation platforms that subsequent offshoring projects are designed and developed. The
scholars contend that companies must decide from the initial stages of planning for the reasons
for adopting the strategy as either core or supporting. This assertion was inferred from the
experiences of management executives of large corporations that have used the concept to meet
their organizational needs. Also, the result of an 2014 survey conducted by management
consulting firms in the United States showed that firms that make the choice of focusing on their
core and strategic competencies while depending on the strong network of service providers to
handle the less strategic ones are delivering profit margins of over 25% more than their
counterparts that failed to do so. Also, these management professionals claimed that the key
parameter for achieving the positive results since the implementation of their outsourcing
initiative was the modification of their organizational structure specifically for the purpose.

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The use of the right technological solutions and approaches is the second criteria for
success that management scholars recommended from their analysis of the experiences of large
corporations that are outsourcing different aspects of their operations. Qi & Chau (2012)
explained that the era of using traditional offshoring practices are reliant on end-to-end
relationships provided by technology are giving away to advanced and complicated methods that
project champions must be familiar with to avoid failure. Organizations that use data center
services for cloud computing and information stora...