Outsourcing and Its Impact on Businesses

This assignment delves into the concept of outsourcing and its implications for businesses. It requires a comprehensive literature review analyzing various aspects of outsourcing, including its impact on role stress in hotel spa managers and its role in business process innovation. Students must also evaluate strategic outsourcing decisions for manufacturers focusing on product quality. The research plan should outline methodologies for collecting and analyzing both secondary and primary data sources. Finally, the assignment culminates in a thorough analysis and interpretation of the collected data, leading to well-supported conclusions about the effectiveness and challenges of outsourcing in different business contexts.

Running head: BUSINESS RESEARCH PROPOSAL
Business Research Proposal
Name of the Student
Name of the University
Author note

1BUSINESS RESEARCH PROPOSAL
Abstract:
For companies to achieve growth quickly and attain a faster rate of production, they have
shifted from traditional practices to some new systems in their work process. Companies have
started using strategic outsourcing of their works in order to reduce the costs and increase
overall efficiency in the operations. The aim of this research proposal is to focus on the
application of strategic outsourcing in various companies and the various merits and demerits
of the process. The proposal will put light on the various scopes that outsourcing creates for a
company to enhance its performance.

2BUSINESS RESEARCH PROPOSAL
Table of Contents
Introduction................................................................................................................................3
Project Objectives......................................................................................................................3
Project Scope..............................................................................................................................4
Literature review........................................................................................................................4
Research question.......................................................................................................................6
Primary question....................................................................................................................6
Secondary question................................................................................................................7
Research Design and Methodology...........................................................................................7
Qualitative Research..............................................................................................................7
Quantitative research..............................................................................................................7
Research limitation.....................................................................................................................7
Time Schedule............................................................................................................................8
Conclusion..................................................................................................................................8
Reference list............................................................................................................................10
Appendix 1...............................................................................................................................12

3BUSINESS RESEARCH PROPOSAL
Introduction
Outsourcing in the general sense refers to the transfer of certain processes, which
were previously taken care of by the company internally, to the organizations in a distant land
so that the process becomes cheaper and faster (Dolgui & Proth, 2013). However, it is sharing
of work but outsourcing is a lot different from subcontracting or joint manufacturing (Guers,
Martin & Wybo, 2014). The primary motive that drives organizations to move towards
outsourcing is the benefit of cost reduction that is huge and reduces the annual expenses
subsequently for the company. The benefits are in plenty but such a process is not without its
drawbacks. The aim of this research proposal is to focus on the areas that prove to be
advantageous to the company and the areas that pose threat to the company when strategic
outsourcing is used in practice. The proposed research method will lead to collection of both
primary and secondary data that will be taken into account to understand the various
implications that outsourcing can have both positive as well as negative in its nature.
Project Objectives
The objective of this research proposal is to gain an insight into the benefits and
drawbacks that are posed by outsourcing. The research proposal will look at the various
possible results both positive and negative that can incur with the practice of strategic
outsourcing. The issue of quality, company image, cost effectiveness and also the amount of
failure in outsourcing process, all will be taken into account to understand the process of
outsourcing in totality. The various levels of outsourcing will be evaluated to find out the
effectiveness of strategic outsourcing practice over the other prevalent practices.

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Project Scope
The research proposal will look at the literature review of the process of outsourcing
and try to get hold of the various factors that are associated with it. The literature review will
help in establishing the research question and hypothesis (Machi & McEvoy, 2016). The
various pros and cons will allow designing the research that will be conducted in the future in
order to understand the various merit and demerits of strategic outsourcing and the level of
acceptance it has attained among the various organizations.
Literature review
The focus of this section is to provide a brief of the literature of the topic and finding
out the possible gaps in the literature (Gallouj & Zanfei, 2013). Nowadays, outsourcing has
been a practice that is used by every company to get their work done by other organizations
present in away locations. The features of outsourcing have many advantages and
disadvantages that are brought to focus by previous researches that were done on the same
topic. Some of the advantages and disadvantages of outsourcing are-
 Outsourcing effectively brings down the cost of operation for a company.
Organizations outsource their secondary work processes to places where the cost of
resource is low. Developed countries outsource the work to developing countries
because the cost of labor is low in those parts of the world (Anwar, 2013). Companies
like IBM have successfully done this and passed on their secondary works to
countries like India and this has led to the reduction in the costs and the company has
went to top position in the current market.
 Experts do the work when it is outsourced because outsourcing firms hire experts to
deal with the work that pours in. The cost of developing expertise in the needed labor

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force is way higher and hence outsourcing the work to expert results in better quality
of work being done for the company (Schwarz, 2014).
 Outsourcing enhances the effectiveness of the work force because the non-core
activities are outsourced and the primary workforce can focus entirely on the core
activities of the company (Schniederjans, Schniederjans & Schniederjans, 2015). This
leads to better quality in the services of the company.
 The control over the outsourcing firms is much stipulated and hence it cannot be
assured that always the organization will work according to the terms of the
organization that is outsourcing its work. The management has no control and hence it
leads to the reduction in the quality of work because there is no such quality check
before the work is passed on in the final stage (Goetsch & Davis, 2014). This a huge
disadvantage and it leads to the damage of the company’s reputation in the market due
to the supply of poor quality products, which are partly due to the outsourced material
or service.
 Employment levels take a hit when the work is outsourced in bulks. The unemployed
population may be capable of doing the work but they are not given any opportunity
to work and are hence left unemployed because all such work are already outsourced
due to the low cost in other countries (Bandyopadhyay, Marjit & Yang, 2014). This is
a prime scenario in countries like Australia.
The literature gap lies in understanding that apart from the various advantages and
disadvantages that are present in the process, it a factor to decide that which level of
outsourcing should be selected by the company in order to gain the most benefit from it. The
various levels of outsourcing are-
 Tactical Outsourcing- This level of outsourcing depends mainly on making the
decision based on the factor of cost. Lack of monetary resources, lead the companies

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to selecting this level of outsourcing. Strategic outsourcing brings about obvious
benefits as improved money reserve funds, limiting the requirement for future
ventures and settling staffing issues (Hodari, Waldthausen & Sturman, 2014). Large
organizations undertake such outsourcing techniques for their HR administration,
payroll activities or logistics.
 Strategic Outsourcing- This is the most effective level of outsourcing and all the
successful organization turn to this for optimizing their performance in the market. In
this level, the company aligns the focus of the workers according to the primary
motives of the company (Xiao, Xia & Zhang, 2014). This leads to long-term value
returns for the company and allows the best services to represent the company.
 Transformational Outsourcing- This gives the business a new definition and enables
the company to create sustainable advantage over its competitors and gain higher
profit to maintain the peak position in the market (Lacity & Willcocks, 2013).
These levels are all inclusive of various risks that may result to loss for the company but
still most of the companies prefer the first two levels despite knowing the risks because they
ensure long-term benefit and direct cost reduction in the process.
While outsourcing any work, it always should be noted that the place to which the work is
being outsourced should have all the resources that will result to benefit of the organization.
If the resource base is inadequate then it will be ineffective in producing good quality of work
in the days to come and the company shall eventually face a loss by outsourcing the work.
Research question
Primary question
1. Is strategic outsourcing the most widely used and trusted level of outsourcing
practices?

7BUSINESS RESEARCH PROPOSAL
Secondary question
1. What are the various negatives of the strategic outsourcing?
2. What practices are used by organizations to have a greater control over the
outsourced work?
3. Does outsourcing lead to loss of quality in the final product or service?
Research Design and Methodology
Qualitative Research
Data will be collected from small sample groups belonging to two different
organizations, which use two different levels of outsourcing. According to Neuman (2013),
qualitative data is collected in small sets by conducting interviews. The interview for this
research will be conducted among the top managers of two different organizations and the
answers are expected to reflect the quality that is prevalent in the work scenario.
Quantitative research
In this method, numerical data will be collected from the organizations’ archived
database about the profit and loss that has been incurred due to outsourcing (Neuman, 2013).
The employee survey will be conducted to find out their satisfaction and the overall work
environment in the two different organizations that use two different levels of outsourcing out
of which one should use Strategic outsourcing.
Both the methods will be used to get a conclusion on the research questions that are
proposed in this research proposal.
Research limitation
The sample size and variety will be small because only two companies will be taken
for conducting the research. Less number of people is in the managerial posts and hence the

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sample size for certain interviews will be too small to get a larger picture (Neuman, 2013).
The data that will be taken into account for the analysis from the database of the organization
may be biased and manipulated in order to project a better image of the company to the
public. The respondents who belong to the managerial rank will provide bias response when
they will be asked about the employee satisfaction and company growth in the recent years
because negative feedback from them will put light on their inability to run the company
successfully. The budget of the research is very limited and hence that will restrict the
number of companies that will be surveyed. The low budget will restrict travelling to other
destinations to get the data for better understanding of the situation in respect to outsourcing
practices around the globe.
Time Schedule
The first month of the schedule will go into finalizing the topic for the research and
the subsequent months will go in gathering the data from various sources. From the 3rd month
onwards, the literature review shall be conducted to get a better idea about the grounds that
are to be covered in the research. The final stages will include analyzing the project and
concluding it along with making a rough draft to be submitted. All this will be done roughly
in a period of 6-7 months.
Conclusion
To conclude, the practice of outsourcing can lead to various outcomes which can have
all sort of implications to an organization’s progress. The research is expected to conclude in
favor of the practices of strategic outsourcing but there are many section that will arise as the
data is analyzed after being collected from the relevant sources. Outsourcing is a major
practice that is present in all organizations in some form or the other. The various processes
are being outsourced to enable a faster rate of work and increase the performance of the

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workers by making them focus on issues that are core in their nature. The outsourcing has led
to many failures too and the entire conclusion can be drawn once the research is completed
and a wider answer is provided to the proposed research question.

10BUSINESS RESEARCH PROPOSAL
Reference list
Anwar, S. (2013). Outsourcing and the skilled–unskilled wage gap. Economics
Letters, 118(2), 347-350.
Bandyopadhyay, S., Marjit, S., & Yang, L. (2014). International oligopoly, barriers to
outsourcing and domestic employment. Canadian Journal of Economics/Revue
canadienne d'économique, 47(4), 1372-1386.
Dolgui, A., & Proth, J. M. (2013). Outsourcing: definitions and analysis. International
Journal of Production Research, 51(23-24), 6769-6777.
Gallouj, F., & Zanfei, A. (2013). Innovation in public services: Filling a gap in the
literature. Structural change and economic dynamics, 27, 89-97.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence.
Upper Saddle River, NJ: pearson.
Guers, C., Martin, C., & Wybo, J. L. (2014, September). The impact of the use of
subcontracting on organizational reliability and safety. In 24th European Safety and
Reliability Conference-ESREL 2014 (pp. 1027-1035). London, Taylor & Francis
Group.
Hodari, D., Waldthausen, V., & Sturman, M. (2014). Outsourcing and role stress: An
empirical study of hotel spa managers. International Journal of Hospitality
Management, 37, 190-199.
Lacity, M. C., & Willcocks, L. P. (2013). Outsourcing business processes for innovation. MIT
Sloan management review, 54(3), 63.
Machi, L. A., & McEvoy, B. T. (2016). The literature review: Six steps to success. Corwin
Press.
Neuman, W. L. (2013). Social research methods: Qualitative and quantitative approaches.

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Schniederjans, M. J., Schniederjans, A. M., & Schniederjans, D. G. (2015). Outsourcing and
insourcing in an international context. Routledge.
Schwarz, C. (2014). Toward an understanding of the nature and conceptualization of
outsourcing success. Information & Management, 51(1), 152-164.
Xiao, T., Xia, Y., & Zhang, G. P. (2014). Strategic outsourcing decisions for manufacturers
competing on product quality. Iie Transactions, 46(4), 313-329.

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Appendix 1
Activity Months
M
Jan
M
Feb
M
Mar
M
April
M
May
M
June
M
July
Finalizing the topic 
Collecting data from secondary
sources
 
Forming a layout of the research
work

Conducting Literature review   
Forming the research plan  
Selecting appropriate research
methodologies
 
Collecting data from primary
sources
 
Analysis of collected data sets  
Interpretation of collected data sets 
Concluding the Study 
Designing a rough draft  
Submitting the Final Work  