Outsourcing Strategies in Manufacturing

This assignment delves into the evolving landscape of outsourcing strategies in manufacturing. It requires students to investigate the motivations behind both outsourcing and insourcing decisions made by firms. A key focus is understanding how these choices influence a company's ability to gain a competitive edge in the market. Students must analyze relevant research and case studies to support their arguments.

Running head: BUSINESS RESEARCH
Opportunities and Challenge of Outsourcing Business Functions in Bangladesh: A Case Study of
Nike
Name of the Student
Name of the University
Author Note

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Table of Contents
1.0 Introduction................................................................................................................................3
2.0 Project Objective.......................................................................................................................3
3.0 Project Scope.............................................................................................................................4
4.0 Literature Review......................................................................................................................4
4.1 Opportunities in outsourcing business functions...................................................................4
4.1.1 Focusing more on core operations..................................................................................4
4.1.2 Improved efficiency........................................................................................................5
4.1.3 Increased partnership......................................................................................................5
4.2 Challenges faced due to outsourcing business functions.......................................................5
4.2.1 Data security problem.....................................................................................................5
4.2.2 Improper alignment of business objectives....................................................................5
4.2.3 Lack of government regulation.......................................................................................6
5.0 Research Questions....................................................................................................................6
5.1 Primary Question...................................................................................................................6
5.2 Secondary Questions.............................................................................................................6
6.0 Research Design and Methodology...........................................................................................6
7.0 Research Limitations.................................................................................................................8
8.0 Research plan.............................................................................................................................8

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9.0 Conclusion.................................................................................................................................9
10.0 Reference List........................................................................................................................10

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1.0 Introduction
Drauz (2014) stated that the major reason due to which an organization opted for
outsourcing their business functions is to improved company focus, controlling and reducing the
operating cost, maximizing use of the external resources and mainly to focus on the core
business operations. Marketers emphasizes on developing a strategic vision, structured vendor
agreement, and relationship management for implementing a successful outsourcing (Fratocchi
et al. 2014). Nike for obtaining high profitability opted for targeting the third world countries
including India, China and Bangladesh and Southeast Asian nations. However, a controversial
activity that Nike has to face was the allegation of sweatshop in the Bangladesh factories.
Thus in this research the opportunities and challenge that is faced by Nike due to
outsourcing their business functions in Bangladesh will be highlighted. The detail about the
project objective and scope will also be illustrated followed by literature review, research
questions and the methodology that is used for obtaining the main objectives of the research. The
limitation of the research along with the timeframe for the research is also presented in the
research.
2.0 Project Objective
 To identify the benefits of outsourcing business functions
 To evaluate the opportunities of outsourcing business functions
 To find the challenge of outsourcing business functions
 To recommend strategies for improving the effectiveness of the business function
outsourcing

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3.0 Project Scope
This project will highlight the challenges that Nike has faced during the business function
outsourcing in Bangladesh. Experts say that Nike has to struggle in maintaining a balance
between the cost and worker’s safety (Banjo 2014). The media also broadcasted the negative
news that in factories, people are provided with lesser salary and in return they have to overwork,
poor enforcement of social sustainability practices and the incidence of factory collapse in
Bangladesh make Nike a global symbol of abusive labor practices (Pearce 2014). This research
will illustrate Nike’s re-exploring outsourcing in Bangladesh and the opportunity that the
concerned organization has focused in opting the decision. Moreover, the challenge Nike faced
and has to face in outsourcing their business function in Bangladesh for attaining profitability.
4.0 Literature Review
Drauz (2014) stated that established organization intends to targets all the available
market in the community and thus ask other organization to manufacture their products. Kang et
al. (2012) stated that marketers utilized this concept to emphasize more and allocate resources
more on their core competencies.
4.1 Opportunities in outsourcing business functions
4.1.1 Focusing more on core operations
An established organization have many core functions; whereas, the main aim is to attain
more profitability. Yampolskiy et al. (2014) stated that marketers can emphasize more on the
core operation like allocation of resources, selecting vendors and process for targeting new
customers if they outsource their manufacturing operation to other company.

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4.1.2 Improved efficiency
Kastalli and Van Looy (2013) highlight that not all third party are incompetent. An
organization need to research on most competent organization, whose organizational objectives
are almost similar and they can obtain the organizational objectives easily. Zhang and Huang
(2012) moreover stated that this process thus reduce the risk of working process of
manufacturing as the outsourcing organization are efficient in this process.
4.1.3 Increased partnership
Outsourcing the business function not only allows organization to accomplish their
complete business function properly but also help in enhancing their partnership (McCarthy et al.
2013). This will help them to sustain in any business marketers the third party aware of the
political, environmental and technological condition of their nation.
4.2 Challenges faced due to outsourcing business functions
4.2.1 Data security problem
Brewer et al. (2013) stated that some businesspeople use some valuable resources and get
the supply from their selected vendors. However, business outsourcing for manufacturing
process may result in getting all the knowledge to be disclosed to the manufacturer. This
furthermore leads to data protection violation to the competitor organization.
4.2.2 Improper alignment of business objectives
According to Solakivi et al. (2013), a successful partnership can only be formulated of
the business objectives among organizations is properly alignment. However, alignment disorder
can occur due to improper knowledge of other company’s objectives and aim and this may

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results in poor products manufacturing by not following the quality standard that an organization
follows.
4.2.3 Lack of government regulation
This problem is mainly obtained in the cases, where a company desires to outsource their
business function in foreign nation. In this case, it is usual that the vendor is not aware of the
governing regulations that the company has to follow in their nation. The problem can be
increased more due to the improper communication.
5.0 Research Questions
5.1 Primary Question
 What are the opportunity and challenges faced by Nike by outsourcing business functions
in Bangladesh?
5.2 Secondary Questions
 What are the benefits that a Nike can get by outsourcing their business functions?
 What are the opportunities that allow Nike to re-explore their outsourcing approach for
business functions?
 What are the challenges that allow Nike to re-explore their outsourcing approach for
business functions?
6.0 Research Design and Methodology
Approaches to reliability and Validity- The reliability method that will be used in this research is
test-retest reliability. Csikszentmihalyi and Larson (2014) portray that in test-retest reliability
test, same test is obtained more than one time based on different period and then a particular

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research outcome will be sated. Moreover, in this research study articles that represent
opportunities and challenges in outsourcing the Nike’s business functions in Bangladesh in
different time line will be considered.
Moreover, the validity technique that will be used is formative validity technique as after
the data collection from articles and research papers, the changes and opportunities found from
the research will highlight the main strategies followed by Nike so that their business
outsourcing function can be enhanced.
Research Philosophy- Since secondary research will be used, thus the selected research
philosophy technique used is interpretivism. Silverman (2016) also stated that in interpretivism
research philosophy, the sample size is less and is based on the theoretical findings. Thus, this
method will be used in this research.
Research purpose- Among deductive and inductive research purpose, inductive research purpose
will be used. From the primary research is that the study of opportunities and challenges faced by
Nike in outsourcing their manufacturing operation, some strategies for enhancing the business
outsourcing function will ne suggested and based on which the research outcome will also be
found.
Sampling- There are two type of sampling methods that can be followed in research- probability
and non-probability sampling method. Fowler Jr (2013) stated that all the respondents get equal
chances to participate in the research, it is known as probability sampling method. Moreover,
when all the respondents are not getting the same chance to participate in the research, it is
known as non-probability sampling method (Sekaran and Bougie 2016). In this research, non-
probability sampling method is used as not all the newspaper articles and research paper are not

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selected for this research only those papers that is based on business function outsourcing of
Nike in Bangladesh will be considered.
Data Collection Method- There are two methods for data collection primary and secondary data
collection process. Bernard (2017) stated that data when collected directly from the research
respondents, the method of collection is known as primary data collection. Data is collected
through websites, newspaper articles, research papers and peer journal articles are known as
secondary collection process. In this research, secondary data collection will be utilized and data
will be gathered from newspaper articles and research papers.
7.0 Research Limitations
The limitation of the research is that only secondary data collected is being collected and
thus the data collected are outdated and the current situation of the business function outsourcing
cannot be identified. Moreover, the research is also based on one organization, which illustrate
that the opportunities and challenges for business function outsourcing can only be defined for
one organization or limited to the shoe manufacturing industry. This identified challenges and
opportunity do not define the scenario of all industry.
8.0 Research plan
Main activities/ stages 1st-2nd
Week
3rd-4th
Week
5th-6th
Week
7th-8th
Week
9th-10th
Week
11th-12th
Week
Topic Selection
Data collection from
secondary sources

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Literature review
Formation of the research
Plan
Selection of Appropriate
Research Techniques
Detailed Secondary Data
collection
Analysis & Interpretation of
Data Collection
Conclusion of the Study
Submission of Final Work
Table 1: Research plan
(Source: Created by Author)
9.0 Conclusion
The selected research objectives for the research are to identify the benefits of
outsourcing business functions, evaluate the opportunities and challenges of outsourcing
business functions and to recommend strategies for improving the effectiveness of the
business function outsourcing. A secondary research will be conducted and the source
selected are from newspaper articles based on the business outsourcing of Nike in
Bangladesh and research based on outsourcing will also be selected. Non-probability
sampling technique will be followed in selecting these resources. The entire project is
planned to be completed in six months.

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10.0 Reference List
Banjo, S., 2014. Inside Nike’s struggle to balance cost and worker safety in Bangladesh. The
Wall Street Journal, 21.
Bernard, H.R., 2017. Research methods in anthropology: Qualitative and quantitative
approaches. Rowman & Littlefield.
Brewer, B.L., Ashenbaum, B. and Carter, J.R., 2013. Understanding the supply chain
outsourcing cascade: When does procurement follow manufacturing out the door?. Journal of
Supply Chain Management, 49(3), pp.90-110.
Csikszentmihalyi, M. and Larson, R., 2014. Validity and reliability of the experience-sampling
method. In Flow and the foundations of positive psychology (pp. 35-54). Springer Netherlands.
Drauz, R., 2014. Re-insourcing as a manufacturing-strategic option during a crisis—Cases from
the automobile industry. Journal of Business Research, 67(3), pp.346-353.
Fowler Jr, F.J., 2013. Survey research methods. Sage publications.
Fratocchi, L., Di Mauro, C., Barbieri, P., Nassimbeni, G. and Zanoni, A., 2014. When
manufacturing moves back: concepts and questions. Journal of Purchasing and Supply
Management, 20(1), pp.54-59.
Kang, M., Wu, X., Hong, P. and Park, Y., 2012. Aligning organizational control practices with
competitive outsourcing performance. Journal of Business Research, 65(8), pp.1195-1201.
Kastalli, I.V. and Van Looy, B., 2013. Servitization: Disentangling the impact of service
business model innovation on manufacturing firm performance. Journal of Operations
Management, 31(4), pp.169-180.

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McCarthy, I.P., Silvestre, B.S. and Kietzmann, J.H., 2013. Understanding outsourcing contexts
through information asymmetry and capability fit. Production planning & control, 24(4-5),
pp.277-283.
Pearce, J.A., 2014. Why domestic outsourcing is leading America's reemergence in global
manufacturing. Business Horizons, 57(1), pp.27-36.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Silverman, D. ed., 2016. Qualitative research. Sage.
Solakivi, T., Töyli, J. and Ojala, L., 2013. Logistics outsourcing, its motives and the level of
logistics costs in manufacturing and trading companies operating in Finland. Production
Planning & Control, 24(4-5), pp.388-398.
Yampolskiy, M., Andel, T.R., McDonald, J.T., Glisson, W.B. and Yasinsac, A., 2014,
December. Intellectual property protection in additive layer manufacturing: Requirements for
secure outsourcing. In Proceedings of the 4th Program Protection and Reverse Engineering
Workshop (p. 7). ACM.
Zhang, A. and Huang, G.Q., 2012. Impacts of business environment changes on global
manufacturing outsourcing in China. Supply Chain Management: An International
Journal, 17(2), pp.138-151.