Offshoring and Outsourcing Upon Business Functions

Research Project

Table of Contents
TITLE:.............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
Overview of Research.................................................................................................................1
Background of Research.............................................................................................................1
Significance of Research.............................................................................................................1
Research Aim..............................................................................................................................2
Research objectives.....................................................................................................................2
Research questions......................................................................................................................2
LITERATURE REVIEW................................................................................................................2
The concept of offshore and outsourcing of resources...............................................................2
The benefits and risks associated in outsourcing and offshoring................................................3
The relationship between outsourcing and offshoring with expansion of business by
Morrisons....................................................................................................................................5
METHODOLOGY..........................................................................................................................6
TIME SCALE..................................................................................................................................8
DATA ANALYSIS AND INTERPRETATIONS...........................................................................9
RESEARCH OUTCOMES............................................................................................................14
REFLECTION & RECOMMENDATION....................................................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
APPENDIX....................................................................................................................................19

TITLE:
“To investigate the benefits and risks of offshoring and outsourcing upon business
functions on an organisation.” A study on Morrisons.
INTRODUCTION
Overview of Research
Globalisation refers to the process in which business runs at international level and
provide more growth prospects. This is the process in which there is exchange of ideas, resources
which helps in integration and interaction among people, political parties (Alguezaui and Filieri,
2014). Hence, it is clear that globalisation requires more resources such as funds, human
resources, technological aspects, etc. In this report, there is discussion about benefits and risk
associated with offshoring and outsourcing of resources. Out-sourcing refers to the process of
making allocation of resources from outside the organisation. Off- sourcing refers to performing
business operations such as manufacturing, accounting, etc. at some other country to save cost.
There are some changes which are required to be taken to work at international level such as
more marketing, change in technological aspects, etc. In case of expanding business, it is not
compulsory that organisation has all the resources in best and better manner. In this research,
there is discussion about Morrisons which is a fourth largest Super Market chain having
headquarter in England UK.
Background of Research
Morrisons is the company which deals in super market sector. This organisation is fourth
largest in retail sector. This is because they operates in different parts of country such as Russia,
Ireland, etc. There are around 498 stores in different parts which assist in running business at
globalise level. There is requirement of some resources which is relevant for performing business
operations in the form of outsourcing and off sourcing. Off sourcing refers to performing
operations in more than one country to achieve cost benefits advantage and economies of scale.
While out- sourcing refers to the process in which third party performs operations on the basis of
company. This helps to provide quality services to consumer and achieve good customer base. In
environment, changes are taking place with rapid speed such as change in demand of consumers,
technological up-gradations, etc. In this case managers of Morrisons prefer to takes collect
resources from outside the organisation. As per change in plans and policies, there are
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possibilities that managers of Morrisons can take actions to hire resources from external
environment in order to expand business and achieving cost advantage (Cavusgil and et. al.,
2014).
Significance of Research
This research is conducted in order to analyse benefits and risks associated with
outsourcing and offshoring of resources. Hence with this report, it is easy for reader to
understand the concept of offshoring and outsourcing. With the help of this research researcher is
able to understand about research tools and techniques. Researcher is able to enhance data
analysis and collection skills which helps to pursue research is effective and efficient manner.
With studying this topic, pros and cons of outsourcing and off-sourcing can be evaluated which
assist researcher if they want to avail this service from outside organisation. Morrisons deals in
retail sector where there is requirement of different sources for proper working of organisation
maintaining cost and profit. This topic is vast and relevant in market, so reader enhance
knowledge about it.
Research Aim
“To evaluate the benefits and risks of offshoring and outsourcing of business functions of an
organisation.” A study on Morrisons.
Research objectives
 To understand the concept of offshore and outsourcing of functions.
 To understand the benefits and risks associated in outsourcing and offshoring.
 To determine the relationship between outsourcing and offshoring of functions with
expansion of business.
 To recommend improvements in offshoring and outsourcing of functions in Morrisons.
Research questions
 Do you understand the concept of offshore and outsourcing of functions?
 What are the benefits and risks associated in outsourcing and offshoring?
 What type of relation occur between outsourcing and offshoring of functions with
expansion of business by Morrisons?
 What are the recommendations for improvements in offshoring and outsourcing of
functions by managers of Morrisons?
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LITERATURE REVIEW
The concept of offshore and outsourcing of resources
In business operations, there are many changes which are taking place in external
environment, so it is important for managers of Morrisons to take actions accordingly (Dhar,
2012). Morrisons is the organisation which operates in different parts of country, so it is not
possible to perform all activities with available resources hence in this case there is requirement
of assistance from external market. In general people think there is similarity in both the
terminology.
According to Jonathan Webb (2019); offshoring is the technique to reduce cost for the
organisation by performing business operations such as manufacturing, accounting, etc. in one
another countries. Hence in this case, managers of Morrisons plan to operates business
operations in different geographical region. For instance: in developed countries there is
expensive labour, resources, etc. In order to deal with this situation, managers can operates its
business in developing countries to reduce cost and achieve good profits. While outsourcing
refers to the technique in which managers of organisation gives authority to third party for
running business. This is the situation which arise in case of peak load of work, lack of
resources. This situation arise mainly in case of human resources. For instance: at the time of
festive season, there is overcrowding of consumers at store. Hence in this case managers of
Morrisons has to hire employees on part time basis. This is known as outsourcing. This is done
with proper specification because there is requirement of perfection of services
According to Jim Iyoob (2019), there are different types of outsourcing. Some of them
are discussed as under-
Onshore outsourcing- As per this, Morrisons locate resources to other organisation
which is part of same home country. With the help of this outsourcing, there is ease in
performing operations because both the companies have knowledge about local trends.
Offshore Outsourcing- According to this outsourcing, external party which is located in
some foreign country. Hence with the help of offshore outsourcing, expansion of business is
possible which helps ion attaining good brand image in industry.
Near Shore outsourcing- As per this outsourcing, business operations are performed by
this party which is situated at near place to country, region, etc. having similar culture, religion
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and trends. This outsourcing is beneficial because there is similarity in trend, so it is easy to
collect information and then provide best quality of products to consumers.
The benefits and risks associated in outsourcing and offshoring
In business environment, changes are taking place with rapid speed so it is essential to
analyse those changes and then implement to working this (Gerbl and et. al., 2015). For instance:
managers of Morrisons are thinking to expand business in South Africa, so in this case, they have
two options either to offshore or outsource resources. In offshoring, business can expanded in
Africa because cost of operating business is low. Labour is cheap, resources are easily available,
etc. are the benefit available for managers of Morrisons. While as per other option, outsourcing is
the method which is used by managers of Morrisons in which they can give authority to third
person for running business in South Africa. Hence, there are some benefits and risk which is
associated with these options.
According to Renato (2019), outsourcing is one of the most common technique used by
different organisation in order to make long term resistance in industry. Benefits and risks of
outsourcing are as under-
Benefits Risks
 There is use of special skills which
assist in providing good quality in the
brand name of Morrisons.
 With the out sourcing, there is no core
competence and this helps in facing
less competition in industry.
 Organisational effectiveness can be
achieved with the help of third party
(Gurung and Prater, 2017). This is cost
savy approach which helps to achieve
good image in industry.
 Confidential information which is part
of management of Morrisons gets
revealed. This affects business
operations in negative manner.
 In outsourcing, personnel are hired
from external market. Hence this affects
morale of existing workers and this lose
their loyalty in organisation.
 There is no clear level of cooperation
from external parties. Hence this affects
relation with external party and this
affects growth and expansion of
Morrisons.
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Apart from above discusses risk and benefits in implementing offshoring. Cost is one of
the important component which affects revenues of organisation. Some benefits and risks which
are associated with offshoring are as under-
Benefits Risks
 With the help of offshoring, economies
of scale can be achieved. There is
saving of cost for Morrisons and has
positive impact on sales and revenues.
 In offshoring, there is contract between
managers of Morrisons with third party,
which helps in reducing cost and
maintaining working efficiency of
overall organisation.
 There is favourable political policies
which helps to perform business
operations in desirable manner. So
business can expand at globalise level.
 There is difference in culture, trends,
religion of people, so there are
possibilities that there is difference in
preference of consumer and offshore
client.
 In case of offshore transaction,
sometimes third person is ready to
perform business operations under
brand of Morrisons. They have release
business plans and strategies to
competitive brand (Haakonsson, Jensen
and Mudambi, 2012).
 While working in other country results
in costly approach, there are many cost
which are related to operating with third
party under contract of offshoring.
The relationship between outsourcing and offshoring with expansion of business by Morrisons
Morrisons has operations in many countries. They have different products and services
which they offers to consumers according to market trends. According to Jensen, 2012; with the
help of outsourcing and offshoring market analysis can be done which helps to provide product
and services according to their demand. It is not possible to make available resources ready for
the time of emergency, hence in this case both the techniques are preferred. For instance: in
expansion business, managers of Morrisons can contract with third person. This is the approach
which helps to expand business at international level with minimum cost. This decision is taken
by considering all the factors such as cost of labour, availability of raw material, etc. Hence this
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