Benefits and Risks of Offshoring and Outsourcing: A Morrisons Study

This report provides a comprehensive analysis of offshoring and outsourcing strategies, focusing on their application within Morrisons, a leading supermarket chain. The introduction offers an overview of globalization, emphasizing the need for businesses to leverage resources effectively, and introduces the concepts of outsourcing and offshoring. The background section details Morrisons' operations, its market position, and the rationale behind considering outsourcing and offshoring. The research aims to evaluate the benefits and risks associated with these strategies, with specific objectives including understanding the concepts, identifying advantages and disadvantages, and determining the impact on business expansion. The literature review explores the definitions of offshoring and outsourcing, their different types (onshore, offshore, nearshore), and the associated benefits and risks, such as cost savings, access to specialized skills, and potential challenges like cultural differences and confidentiality concerns. The report further examines the relationship between outsourcing and offshoring with Morrisons’ business expansion, highlighting how these strategies facilitate market analysis and resource allocation. The methodology section outlines the research approach, while the data analysis and interpretation section provides findings related to the research questions. The conclusion summarizes the key insights and offers recommendations for Morrisons regarding its offshoring and outsourcing practices.

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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is the cheap way to expand business with cost advantage. But there is negative impact of
offshoring because there are possibilities of conflict with their person. This affects brand image
of Morrisons in negative manner.
Outsourcing is the process in which hiring of employees or collecting resources with the
help of external market. In case of festive season, there is more demand for product and services
by consumers. Hence in this case, there is requirement of numbers of workers which helps to
provide timely services to consumers (Jimmy Gandhi, Gorod and Sauser, 2012). With the help of
this technique, consumers faith in brand is maintained because they are getting quality products.
Hence in case of globalisation outsourcing is beneficial. But it has some negative aspects as well.
In case of need, there are possibilities that managers of Morrisons may use costly option which
affects sales and revenues. External party does not have knowledge about working ethics and
performance criteria of Morrisons. hence this may creates conflict among existing and external
workforce.
There is important role of managers of Morrisons to take actions according to external
market, so they can plan actions according to change in external market. There is requirement of
employees participation, so it is easy to implement strategies which helps to get positive impact
on organisational growth and development. According to Stentoft, J., Mikkelsen, O. S. and
Jensen, J. K., (2016), With the help of out sourcing, there is reduction in unemployment rate and
political assistance can also achieved to Morrisons. Hence it is identified that there is direct
relationship between globalisation of business with outsourcing and offshoring resources.
Hence it is clear that there is positive and negative relationship between offshoring and
outsourcing with globalisation of business. In order to get positive impact it is essential that
managers of Morrisons have to analyse market, properly plan to get positive impact on
operations of company (Lahiri, Kedia and Mukherjee, 2012).
Recommendations to improve offshoring and outsourcing of resources in Morrisons
There are some recommendations which has to be taken in mind by managers of
Morrison in order to get positive impact on performance of organisation. For instance: while
employees are raised with the help of outsourcing, then managers must hire specialised personnel
who have knowledge about changes which are taking place in external market. While offshoring
resources cost must be considered because there are many hidden cost such as legal contract fees,
commissions, etc. which makes this approach costly. Confidential information must not be
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revealed in front of outsiders so they can not mis-use it. There is requirement of proper induction
program to out source employees so there is proper coordination among external and existing
workforce.
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METHODOLOGY
Research can be conducted with the help of proper analysis because this is the study
which provides complete and in- depth information about topic. There are many activities such
as introduction, setting aims and objectives, research methodology, etc. which helps to complete
research within specified time with achieving aims and objectives. Researcher has to perform
research in ethical and effective manner which helps to give relevant and authentic information
to readers. Hence in order to get positive out come, there is use of different techniques such as
research approach, philosophy, design, etc. These techniques are discussed as under in detail-
Research philosophy- This is the outer most layer in the research onion. Research
philosophy is of three types i.e. pragmatist, interpretivist and positivist research philosophy. In
this research, pragmatist research approach is used. This is used because this provides complete
and in- depth information about topic by analysing different prospectives. This research
philosophy bridges gap between remaining two methods because it covers aspects of these two
(Larsen, Manning and Pedersen, 2013).
Research approach- After research philosophy, approach is used. In this research
deductive approach is used. This is the technique which provides information about research
topic by analysing different resources. With observation, issues can be identified and appropriate
knowledge can be conveyed to reader. Apart from deductive approach, inductive is the second
method which can be used by searcher. But research use deductive approach because this suits
with pragmatist research philosophy and deep analysis is done about research topic which helps
to complete research in time.
Research design- There is specific format in which research will be done. There are three
types of research design descriptive, exploratory, experimental. In this research, descriptive
research design is used which provides collect and specific format for completion of research.
Research strategy- Research strategy is the technique which is used to analyse data and
then provide complete information in its regard. There are different strategies such as survey,
case study, observation, etc. In order to collect information regarding, strategy questionnaire is
used. This is the suitable method which is used to provides correct and relevant information
about research topic (Linares-Navarro, Pedersen and Pla-Barber, 2014).
Research choice- Research choice can be understood with the help of qualitative and
quantitative research. In this research, qualitative method is used. As per this method, less
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numerical data is used but it provide reason about having some specific view. Qualitative
research method is effective for performing research in relevant manner by considering all the
aspects. This strategy is suitable with deductive approach and pragmatist philosophy.
Time horizon- Time horizon refers to time required to complete this project. This
research is complete within 10 weeks in which all the activities are considered. In this time all
the activities such as introduction, research aims and objectives, research methodology, etc.
Techniques, procedure and research instruments- There is proper process to collect and
complete research by achieving research aims and objectives. There are mainly two research
techniques i.e. formative and summative (Massini and Miozzo, 2012). There are proper activities
which are performed to complete research such as introduction, aims and objectives, literature
review, data collection, analysis of collected data, etc. With the help of these, it is easy to get
better and proper outcome.
Data source- This is the source which is used to collect information related to relevant
topic. There are two source collect data i.e. primary and secondary. Primary source is the
technique in which data is collected by researcher on the basis of primary data. Information
collected from this method is relevant and fresh. Secondary source is the technique in which
information is collected from online sources, books, journals, etc. This information is already
collected by some other person so this can be old or out of trend. In this report, both the methods
are used in order to get complete and in- depth information about research topic.
Sampling- Sampling is the way to choice few number of respondents as part of
population for collecting information related to research topic. There are two method of sampling
i.e. random and non random sampling. In this research random sampling method is used in which
there is equal chances of being selected from the total population. With this method, there is less
possibilities of partiality and it is easy to collect data free from biasness.
Research ethics- Ethics is one of the important aspect which is considered by researcher
in completing and attaining aims and objectives (Mihalache and Mihalache, 2016). This research
is conducted in ethical and relevant manner because information which is collected with the help
from respondents. There is proper confidentiality of information and it is used for research
purpose only.
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