Benefits and Risks of Offshoring and Outsourcing

Research Project

Table of Contents
TITLE .............................................................................................................................................1
EXECUTIVE SUMMARY.............................................................................................................1
METHODOLOGY..........................................................................................................................1
RESULTS/FINDINGS ...................................................................................................................3
DATA INTERPRETATION...........................................................................................................6
DISCUSSION................................................................................................................................20
CONCLUSION..............................................................................................................................20
RECOMMENDATION.................................................................................................................21
REFLECTION...............................................................................................................................21
REFERENCES .............................................................................................................................23

TITLE
“To investigate the benefits and the risks of offshoring and outsourcing on business
operations of multinational organisation”. A Study on Sainsbury's.
EXECUTIVE SUMMARY
This research report talks about benefits and risks of offshoring and outsourcing on
business operation of Sainsbury's. The purpose of this research is identify various opportunities
for Sainsbury's which are developed through international expansion. Along with this, the
research is helpful in evaluating risks of the similar concept along with the ways through which it
can be overcome effectively. In the current study, investigator have used qualitative research
method for attaining valuable research. Along with this, Questionnaire had been adopted by
investigator as it is helpful in collecting data in minimum time limit. From overall study, it has
been identified that outsourcing and offshoring both are valuable concept for the company as it
helps them in attaining maximum business opportunities which results in higher profitability. On
the basis of whole study, it has been concluded that every organisation should go for outsourcing
in order to improve its performance and enhance its profitability. At last, it is recommended to
Sainsbury's that its top management team should focus on following all ethical and other related
norms at the time of international working. Along with this, they are also recommended to adopt
effective communication channel for conveying right information to respective person.
METHODOLOGY
In the research methodology section, investigator have used primary as well as secondary
method for collecting information regarding the topic. Primary means information is gathered by
researcher for the very first time. For this investigator use questionnaire method. Whereas
secondary research means data collected from already published area which includes newspaper,
journals and from websites. In this research, for primary data scholar has taken 30 respondents
for analysing their views and thoughts. For this, questionnaire method is adopted for gathering
information. On the other hand secondary data includes research articles, newspapers, online
articles, books, journals, websites and many more. With the help of these methods researcher
will be able to gather sufficient amount of information in order to successfully accomplishing
this research.
1

RESULTS/FINDINGS
Questionnaire
Q 1) Are you aware with the concept of globalisation?
a) Yes
b) No
Q 2) Do you think offshoring and outsourcing is the part of globalisation?
a) Agree
b) Disagree
Q 3) As per your viewpoint, which is the main benefits of offshoring on business operations of
Sainsbury's?
a) Increase in number of customers
b) Favourable government policies
c) Better approach to new opportunity.
Q 4) According to your perception, what are main risk of offshoring on business operations for
Sainsbury's?
a) Communication problems
b) Increase unemployment
c) Cultural and social differences
Q 5) What are the different ways through which risk of offshoring and outsourcing can be
overcome by Sainsbury's?
a) Followance of norm and policies
b) Adoption of right communication channel
c) Better training session for employees
Q 6) Do you think offshoring and outsourcing will be helpful for Sainsbury's in terms of its
profitability improvement?
2

a) Agree
b) Disagree
Q 7) As per your viewpoint, which one is the main reason that will be required by Sainsbury's at
the time of performing operational activities at international market place.
a) Human resource
b) Financial Funds
c) Advance technology
Q 8) Do you think, Sainsbury's is required to enhance its product portfolio for grabbing
attention of more customers.
a) Yes
b) No
Q 9) Do you think outsourcing could affect quality of products and services offered by
Sainsbury's?
a) Yes
b) No
Q 10) As per your viewpoint, which one is the bes source of fund will help Sainsbury's for
expansion of business at international market?
a) Bank Loan
b) From Friends and Family
c) Crowdfunding
d) Angel Investors
Q 11) Provide some recommendation for Sainsbury's by which it perform its operational
activity in international market place in effectively so that its profitability can be raised.
Questionnaire
3

Q 1) Are you aware with the concept of globalisation? Frequency
a) Yes 22
b) No 8
Q 2) Do you think offshoring and outsourcing is the part of globalisation? Frequency
a) Agree 25
b) Disagree 5
Q 3) As per your viewpoint, which is the main benefits of offshoring on
business operations of Sainsbury's?
Frequency
a) Increase in number of customers 10
b) Favourable government policies 10
c) Better approach to new opportunity. 10
Q 4) According to your perception, what are main risk of offshoring on
business operations for Sainsbury's?
Frequency
a) Communication problems 12
b) Increase unemployment 8
c) Cultural and social differences 10
Q 5) What are the different ways through which risk of offshoring and
outsourcing can be overcome by Sainsbury's?
Frequency
a) Followance of norm and policies 8
b) Adoption of right communication channel 8
c) Better training session for employees 14
Q 6) Do you think offshoring and outsourcing will be helpful for Sainsbury's
in terms of its profitability improvement?
Frequency
a) Agree 18
b) Disagree 12
4

Q 7) As per your viewpoint, which one is the main resource that will be
required by Sainsbury's at the time of performing operational activities at
international market place.
Frequency
a) Human resource 11
b) Financial Funds 15
c) Advance technology 4
Q 8) Do you think, Sainsbury's is required to enhance its product portfolio
for grabbing attention of more customers.
Frequency
a) Yes 26
b) No 4
Q 9) Do you think outsourcing could affect quality of products and services
offered by Sainsbury's?
Frequency
a) Yes 23
b) No 7
Q 10) As per your viewpoint, which one is the bes source of fund will help
Sainsbury's for expansion of business at international market?
Frequency
a) Bank Loan 10
b) From Friends and Family 6
c) Crowdfunding 6
d) Angel Investors 8
5

DATA INTERPRETATION
Theme 1: Aware about the concept of globalisation
Q.1. Are you aware about the concept of globalisation ? Frequency
Yes 22
No 8
Interpretation: Globalisation is considered as the integration of businesses for the
purpose of growth in terms of profitability ratio. On the basis of above stated graph it has been
analysed that 22 people are aware about the concept of globalisation as they are working in
international companies which are indulge into offshoring and outsourcing work. On the other
hand, remaining 8 people have represented their negative response towards the thought as they
have not even head about this concept. It simply shows that maximum number of population
knows about globalisation as it is popular topic.
6
22
8
Yes
No

Theme 2: Offshoring and outsourcing is the part of globalisation
Q 2) Do you think offshoring and outsourcing is the part of
globalisation?
Frequency
a) Agree 25
b) Disagree 5
Interpretation: As per the above mentioned pie chart, it has been analysed that, out of
30 respondents, 25 respondents are agree from this because they according to them offshoring
and outsourcing is the part of globalisation. This is because both offshoring and outsourcing act
as an globalisation as their role is to do work outside the country which automatically helps
Sainsbury's for making relations with other countries. Along with this, their companies expand
the businesses transferring or starting business in other countries and also they knows about
globalisation. On the other hand, remaining 5 respondents says that they are not agree from this
as according to them offshoring and outsourcing is not a part of globalisation. This is because
they do not have such knowledge about globalisation and market environment.
7
25
5
a) Agree
b) Disagree

Theme 3: The main benefits of offshoring on business operations of Sainsbury'
Q 3) As per your viewpoint, which is the main benefits of offshoring
on business operations of Sainsbury's?
Frequency
a) Increase in number of customers 10
b) Favourable government policies 10
c) Better approach to new opportunity. 10
Interpretation: As per the above mentioned pie chart, it has been analysed that, out of
30 respondents, 10 respondents says that increase in number of customer is the main benefit of
offshoring on business operation of Sainsbury's. This is because offshoring is a process by which
companies do their work in another country by which they attract customers towards it and
expand their business accordingly. On the other hand, 10 respondents says that favourable
government policies is the main benefit of offshoring on business operation of Sainsbury's. This
is because every country has their own rule and regulations so, it will help companies to expand
the business and achieve their targeted goals. Whereas remaining 10 respondents says that better
approach to new opportunity is the main benefit of offshoring on business operation of
Sainsbury's. They think when company expand the business then they get various opportunities
8
10
10
10
a) Increase in number of
customers
b) Favourable government
policies
c) Better approach to new
opportunity.

through which they can survive long period of time at competitive market and create positive
brand image in the market area.
Theme 4: Main risk of offshoring on business operations for Sainsbury's
Q 4) According to your perception, what are main risk of offshoring
on business operations for Sainsbury's?
Frequency
a) Communication problems 12
b) Increase unemployment 8
c) Cultural and social differences 10
Interpretation: As per the above specified pie chart, it has been analysed that, out of 30
respondents, 12 respondents says that communication problem is a main risk of offshoring on
business operations for Sainsbury's. As when company expand their business at another country
then there is various problems which is faced by the company and i.e., communication. This is
because in every country has their different different culture, language so it will create problem
for them to deal with the situations. On the other hand, 8 respondents says that increase
unemployment is a major risk of offshoring on business operations for Sainsbury's. Whereas,
remaining 10 respondents says that cultural and social differences is a risk factor of offshoring
9
12
8
10
a) Communication problems
b) Increase unemployment
c) Cultural and social
differences

on business operations for Sainsbury's. This is because sometimes company not understand the
market analysis of another country which will create problem as different country has different
culture.
Theme 5: Different ways through which risk of offshoring and outsourcing can be
overcome by Sainsbury's
Q 5) What are the different ways through which risk of offshoring
and outsourcing can be overcome by Sainsbury's?
Frequency
a) Followance of norm and policies 8
b) Adoption of right communication channel 8
c) Better training session for employees 14
Interpretation: There are various ways by which risk of offshoring and outsourcing can
be overcome by Sainsbury's through which they can survive long period of time at competitive
place. As per the above specified pie chart, it has been analysed that, out of 30 respondents, 8
respondents says that allowance of norms and policies is a way by which risk of offshoring and
10
8
8
14
a) Followance of norm and
policies
b) Adoption of right
communication channel
c) Better training session for
employees

outsourcing can be overcome by Sainsbury's. On the other hand, 8 respondents thinks that
Adoption of right communication channel is a way by which risk of offshoring and outsourcing
can be overcome by Sainsbury's. With the help of this they can make effective relation so that it
will be easy for them to operates functions of their business and achieve goals in an appropriate
way. Whereas on the basis of remaining 14 respondents says that Better training session for
employees is a best way by which risk of offshoring and outsourcing can be overcome by
Sainsbury's. This is because by the help of training employees learn various thing through which
they can enhance their capability and improves quality of work in order to achieve organisational
goals and objectives.
11

Theme 6: Offshoring and outsourcing will be helpful for Sainsbury's in terms of its
profitability improvement
Q 6) Do you think offshoring and outsourcing will be helpful for
Sainsbury's in terms of its profitability improvement?
Frequency
a) Agree 18
b) Disagree 12
Interpretation: In offshoring, companies do work with another countries not in a
domestic country whereas outsourcing means to expand business at global level through third
party this is called outsourcing. As per the above mentioned pie chart, it has been analysed that,
out of 30 respondents, 18 respondents says that both offshoring and outsourcing will help
Sainsbury's in terms of enhancing profit accordingly. As this is the best ways of attracting
customers and building positive image at competitive market by which Sainsbury's will improve
its profitability. On the other hand, remaining 12 respondents says that they are not agree from
this as they think offshoring and outsourcing is not a way by which Sainsbury's will improve its
profitability.
12
18
12
a) Agree
b) Disagree

13

Theme 7: Main resource that will be required by Sainsbury's at the time of performing
operational activities at international market place
Q 7) As per your viewpoint, which one is the main resource that will
be required by Sainsbury's at the time of performing operational
activities at international market place.
Frequency
a) Human resource 11
b) Financial Funds 15
c) Advance technology 4
Interpretation: Every business requires numerous of resources for executing their
business activities effectively at market place. In context of Sainsbury's, it can be said that the
company will require some essential resources at the time global operations. These resources are
Human resource, advance technology and financial. While identifying main among them, it has
been identified that 11 respondents thinks that human resource is the main resource that will be
required by the Sainsbury's for executing its business activities effectively in international market
place. Whereas 15 respondents have declared that financial resources are core needed resource
because without support of financial it would not be possible for company to execute business
operations. On the other hand, leftover 4 respondents have stated that advance technology is
14
11
15
4
a) Human resource
b) Financial Funds
c) Advance technology

needed by Sainsbury's at every expansion. This is because, advance technology will help the
company in connecting with people belonging to other nations. Along with this, it will also allow
them in simplifying business activities with the support of technology.
15

Theme 8: Sainsbury's is required to enhance its product portfolio for grabbing attention of
more customers.
Q 8) Do you think, Sainsbury's is required to enhance its product
portfolio for grabbing attention of more customers.
Frequency
a) Yes 26
b) No 4
Interpretation: Growth is the main motive of every business organisation. For attaining
growth, company prefers different ways so that their business could succeed effectively in less
period of time. In context of Sainsbury's it can be said that this company can gain attention of
maximum customers by enhancing their product portfolio. On the basis of above stated graph, it
has been evaluated that 26 people have shown their positive response towards the initiative of
Ssainsbury's product portfolio expansion. This is because these people thinks, if company offer
more product attracted towards them as they find each of their product from company. On the
other hand, remaining 4 respondent have denied to this thought as they thinks that customers do
not care about products company. They only gives importance to quality of the product. As a
result, it really do not matters to them that Sainsbury's is increasing its product portfolio or not.
16
26
4
a) Yes
b) No

Theme 9: Outsourcing could affect quality of products and services offered by Sainsbury's
Q 9) Do you think outsourcing could affect quality of products
and services offered by Sainsbury's?
Frequency
a) Yes 23
b) No 7
Interpretation: Every business organisation requires different types of resources in order
to accomplish their business goal in an effective manner. In the present context of Sainsbury's, it
is said that company is adopting outsourcing technology for accomplishing their task.
Outsourcing refers to the process used by companies where they company hire another
organisation for fulfilling the task. In this case third party is responsible for the quality of
product. As per the above graph it has been analysed that out of 30, 23 respondents says that
outsourcing affects the quality of products. Reason behind this is that company hire third party in
order to accomplish their target. In addition to this,employees of the company might not be
trained and developed for producing the goods and services. As a result, qaulity of the products
reduces which affects the overall profitability of the company. On the other hand remaining 7
respondent says that outsourcing does not affect the quality of products. Reason behind this is
17
23
7
a) Yes
b) No

that they thought third party hired by Sainsbury's, will enhance the product quality as they have
capable and potential employees.
18

Theme 10: Source of fund will help Sainsbury's for expansion of business at international
market
Q 10) As per your viewpoint, which one is the best source of fund
will help Sainsbury's for expansion of business at international
market?
Frequencys
a) Bank Loan 10
b) From Friends and Family 6
c) Crowdfunding 6
d) Angel Investors 8
Interpretation: Sources of fund is the way by which company can borrow money for
overall development and expansion of business from one country to another country. Financial
resources is a very important element for managing any activities of an organisation as by the
help of this Sainsbury's expand their business at global level and enhance profitability
accordingly. As per the above specified pie chart, it has been analysed that, out of 30
respondents, 10 respondents says that bank loan is a best source of funding as this will helps
Sainsbury's to expand their business at global level. This is because the whole process can be
done by legal manner which is beneficial for company to borrow fund. On the other hand, 6
19
10
6
6
8
a) Bank Loan
b) From Friends and Family
c) Crowdfunding
d) Angel Investors

respondents says that borrow money from friends and family is a best source of raising fund for
Sainsbury's to expansion of business. Whereas, other 6 respondents says that crowdfunding is the
best sources as here company can borrow money from investors and individuals where they
invest their money for reaching at their goal. Remaining 8 respondents says that Angel investors
is a best source of raising fund for Sainsbury's of expansion of business at global market. As they
are the investors who help those companies or entrepreneur who start their business at new level.
20

DISCUSSION
As per the above mentioned, it has been analysed that offshoring is the process where
companies transfer or assign their projects outside the country border. In addition to this, with
the help of offshoring company can reduce labour cost which directly enhance their profitability.
On the other hand, it has been identified that transportation cost will be the barrier along with
language. Whereas, outsourcing is the process which is used by companies in order to reduce
their overall cost which directly increase the profit margin of the company. Apart from this, it
has been furthered identified that company can gain numerous of benefits by adopting offshoring
such as they can use resources in an effective manner. As well as it is identified that company
gain opportunities from government policies. Each and every country have their own social,
political as well as cultural values. It is quite difficult to adopt culture of different countries.
Along with this, it has been identified that by adopting outsourcing techniques company
can lower their cost and enhance their profit margin. As a result, it will increase the productivity
of company. The main barrier of this concept is communication which affects the overall
working of the outsourcing techniques. In order to improve this effective communication channel
will help company for transferring information in an effective manner.
CONCLUSION
From the overall analysis of the research, it has been analysed that offshoring and
outsourcing are the part globalisation which helps company in evaluating available opportunities
at market place. Along with this, the concept also helps business organisation in attaining their
business objectives. It has been further analysed that the offshoring and outsourcing both
includes benefits and risk for the organisation which are performing business opportunists at
international scale. Main benefit of this concept for companies is related to enhancement of
customers, better approach to technology, more number of business opportunities. Whereas,
major drawback of this concept is legal barriers, tariff plan, diverse culture and tax. It can be said
that its essential for business organisation to adopt some strategies and techniques so that they
could easily execute their business activities while offshoring and outsourcing. At the time of
evaluating all risk of the chosen concept, it has been identified that for reducing effects of these
risk it is essential for companies to follow all ethics and norm. Along with this, by adopting
better communication channel company can easily reduce number of risks. In addition to this, it
21

has been further analysed that this research have included number of research methodology
which have helped in attaining valuable outcome for the same.
RECOMMENDATION
As per the above mentioned report, it has been evaluated that offshoring and outsourcing
is the best methods for Sainsbury's for expanding a business in order to meet profitability. With
the help of this, Sainsbury's company grab various opportunities that will help them to create
positive brand image at competitive market place (Buckley, Doh and Benischke, 2017). Along
with this, it also aids in attracting new customers and retaining old customers for longer period of
time. Furthermore, some of the recommendations of Sainsbury's are mentioned as below:-
 It has been recommended for company that they should provide training and development
session to their employees by which they give their best and improves quality of work, so
that company can satisfies need and requirement of customers. With the help of this,
employees enhance their knowledge which will aid them to generate new innovative
ideas for expansion of business (Drahokoupil, 2015).
 At next, it is suggested to top management team of Sainsbury's to formulating effective
code of conduct when they are indulging outsourcing and offshoring activities. This code
of conduct is required to contain ethical values which will keep the company away from
unethical values.
REFLECTION
Throughout my overall journey of research, I have experienced many phases that have
helped me out in obtaining true outcome of the research and also contributed in improving my
personal as well as professional skills in effective manner. Overall experience of mine is divided
into two parts that is two parts. First one is related to research and another one is related to own
experience. In context of research, I have used to qualitative approach of research in order to
complete this research effectively and attain its outcome on the basis of human perceptions.
Along with this, I have also adopted questionnaire as the research technique in order to collect
information from the respondent effectively with in less period of time. For enhancing reliability
of the research I have also chosen 30 number of respondents as its sample population.
Furthermore, I have used both the primary as well as secondary sources of data collection in
order to collect maximum information which would be helpful for me in improving output of
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