Benefits and Risks of Offshoring and Outsourcing on M&S Operations

This report investigates the benefits and risks of offshoring and outsourcing on the business operations of Marks and Spencer (M&S), a multinational retail company. The study examines the concepts of offshoring and outsourcing, defining them as integral parts of globalization that facilitate business expansion and cost reduction. It explores the advantages for M&S, such as lower costs and flexible business expansion, while also addressing the risks, including the exposure of confidential data and a potential lack of consumer focus. The research uses a qualitative approach with inductive reasoning and random sampling to analyze how globalization drives success in M&S's offshoring practices, particularly in areas like IT outsourcing. The report reviews literature on the topic and details the research methodology, including the approach, choice, sampling method, and time horizon used to conduct the investigation. The findings aim to provide insights into the strategic implications of offshoring and outsourcing for M&S and similar businesses in the global market.

Research Project

TITLE
“To Investigate the benefits and risks of offshoring and outsourcing on business
operations of multinational company. A study on Marks and Spencer.
CHAPTER 1: INTRODUCTION
Overview of study
Globalisation introduces as the worldwide movement toward financial, trade, economic
and communication integration. Outsourcing and offshoring are consider as an effective part of
globalisation which will support an organisation in development of its business. Outsourcing
refers as the assignment of business operations to an external organisation. Offshoring introduces
as a relocation process of business in a different nation (Caniato and et. al., 2015). For this
report, M&S is a chosen multinational organisation that belongs with retail industry. The main
intention of conducting this report is to identify advantages and limitations of outsourcing and
offshoring on crucial operations of an organisation. This report will be cover different postitives
and negatives of outsourcing and offshoring.
Background of Marks and Spencer.
Marks & Spencer is a chosen British multinational retailer for this project. It was
established in 1884 by the Michael Marks, Thomas Spencer and headquartered in London,
United Kingdom. Company carries a special edge when it comes to promoting and delivering
quality oriented home products, food products and clothing. Company decide to expand their
business through offshoring and outsourcing. Both are effective practice and helps an
organisation in development of its business operations at new marketplace.
Research aim
Main purpose of this research is “To Investigate the benefits and risks of offshoring and
outsourcing on business operations of multinational company. A study on Marks and Spencer.
Research objectives
 To evaluate the concept of offshoring and outsourcing business of a company.
 To analyse the benefits and risks availed by M&S by offshoring and outsourcing its
business at international market.
 To determine if globalisation drive success to M&S in offshoring its business.
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Research questions
 Explain the concept of offshoring and outsourcing business of a company.
 What are the benefits and risks availed by M&S by offshoring and outsourcing its
business at international market.
 How globalisation can drive success to M&S in offshoring its business.
Rationale of research
The intention of this investigation is to conduct an analysis the drawbacks and benefits of
offshoring and outsourcing business practices on operations of M&S. Another purpose for doing
this research is to helps an individual in personal and professional manner. In personal manner,
this researcher supports an investigator by improving its research ability i.e. literature review
skill, data collection and data interpretation skill (Flick, 2015). As these skills helps them while
collection of accurate data about the current study. In professional ways, this research assist them
by increasing their understanding regarding the effectiveness of outsourcing and offshoring as a
crucial segment of globalisation. This research also beneficial in academic manner by increasing
understanding about the offshoring and outsourcing among students.
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CHAPTER 2: LITERATURE REVIEW
Introduction of Literature review
Literature Review is refers as the key aspect of an investigation work, thus it is the
fundamental aspect which is mainly considered by the researcher for the purpose of developing
an effective theoretical framework which assist the over all work in right manner (Green, Camilli
and Elmore, 2012). This section is mainly encompasses over gathering information from
different sources as in this area information accumulation is based on secondary sources i.e.
books, journals, published research articles, past investigation areas etc. In this proper analysis is
created over the area which focuses on benefits and challenges which are put forward by
offshoring and outsourcing on business operations of multinational company.
Main Body
The concept of offshoring and outsourcing business of a company.
As per the views expressed by Jonathan Webb, 2017, Offshoring and outsourcing are two
important and different aspects in the respect to business operations. Offshoring is mainly advert
as the movement of different functions and operation's of an enterprises to another country for
the reason of lower labour cost, favourable economic condition, wide market population etc. In
another words, offshoring is also refers as the procedure of relocating a business or an
organisational functions to another country in respect to gaining benefits by reducing labour cost
and an effective regulatory environment (What Is Offshoring? What Is Outsourcing? Are They
Different. 2017). Offshoring is an effective practice which is based on obtaining goods and
services from one place or relocating the procedure to another region or country for the reason of
attaining more benefits and advantages, therefore offshoring is mainly implemented by the
business for the reason of controlling cost, enhancing opportunities for businesses.
According to the opinion stated by Margaret Rouse, 2019, Outsourcing is refers as an
effective business practice in which organisations are concern over hiring another firm or an
individual to handle business operations, providing services, attempting business task that are
either previously done by the organisational workers or executed. Outsourcing is an effective
human resource practice which is practically implemented by the businesses as a cost cutting
measure. Outsourcing is also refers as a business contracting work out to a third party, thus it
mainly works as external organisation (Outsourcing. 2019). Outsourcing and offshoring both the
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terms are effective in the context of providing opportunities to the businesses to attain higher
edge by cutting down extra cost. These two are implemented as the major aspect of human
resource and now it becomes the most integral part of a business to grow within commercial
market.
The benefits and risks availed by M&S by offshoring and outsourcing its business at
international market.
As per the opinion stated by Gino Lisondra, 2019, Offshoring and Outsourcing are two
different and widely considerable aspect of business, thus these two are significantly
implemented by the businesses for the purpose of attaining growth at global market. Marks and
Spencer as a paramount organisation which is concern over offshoring and outsourcing of their
business operations and for this the company has attained numerous benefits and also faces risk,
in which some are associated as under:
Benefits of Offshoring and outsourcing to Marks and Spencer:
Lower cost: This refers as the key benefit which is attained by Marks and Spencer
through outsourcing and Offshoring their business operations. The major reason of offshoring
and outsourcing is based on reducing the cost and boosting profit which in turns in developing
benefits for the firm in saving cost and attain growth (Gunasekaran and et. al., 2015).
Flexible business expansion: This is also another key benefit attain by business, thus
outsourcing and offshoring is mainly promotes global expansion as after implementation of
outsourcing and offshoring of the dealings of Marks and Spencer it is easy for the firm in
expanding the operations of business at vital level. Offshoring and outsourcing is also effective
in assisting the businesses in right way to expand globally and attain huge amount of benefit and
growth (Kumar, 2019).
Risk of offshoring and outsourcing to Marks and Spencer:
Exposing confidential data and information: The main risk associated with
offshoring and outsourcing is exposing of confidentiality. This is because, businesses are
required to share their confidential information with the third party that lead might be riskier for
company. This becomes drawback for company as the contractor or third party could misuse
provided information (Offshoring and outsourcing - advantages and disadvantages. 2019).
Lack of consumer focus and engagement: There are probable chances that third
party dealer or enterprise might be dealing with huge number of customers at a time. This
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might create situation of ignoring customer demand and requirement. As a result, services
or products that are outsourced might be not satisfy customers in right manner. This
situation simply occurs due to lack of customers focus and engagement (Mackenzie, Tan,
Hoverman and Baldwin, 2012).
Globalisation drive success to M&S in offshoring its business.
As per the views presented by Mackey and Gass, 2015, globalisation is one of the
emerging topic that provides high range of profits to business association. This is because, the
term globalisation brings numerous of business opportunities for business entities which helps in
expanding their businesses at international marketplace in effective manner. Emerging trend of
globalisation also influences business organisation to offshore its business functions or activities
in another nations so that they could be completed on time in effective manner. This is basically
done for completing organisational activity within the provided time frame so that they could
gain competitive advantages at marketplace. For instance: Marks and Spencer often outsources
its tech jobs in different countries in order to save its costs (M&S outsources half of its tech jobs.
2019). This initiative of company of outsourcing its IT team is aiming to save around £30 per
year. This simply states that saving of cost directly leads to attainment of profitability as the
Marks and Spencer is securing some range of money every time. Along with this, it is also
assumed by the company that outsourcing will also raise speed of development and also make it
simpler which ultimately contributes in providing better experience to customers.
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CHAPTER 3: RESEARCH METHODOLOGY
Introduction of research methodology
Research methodology is considered as an effective procedure that is opted by
investigator for gathering appropriate information from various sources over the particular topic.
This section is an essential portion of investigation as it provides knowledge to readers that
which kind of research method is going to be used by them. It also provide knowledge on
different research objectives and questions and how information on this gathered, analysed and
evaluated. This section includes various sub sections that are described in the main body one
after another (McCusker and Gunaydin, 2015).
Main body
Research Approach
According to the current study, inductive approach has been opted to conduct this
investigation. Main reason behind selecting inductive approach in research as it is flexible and in
which investigator does not have to apply any pre-determined data. There are certain advantages
of inductive approach such as it assists in future inquiries and acts as a guide for future inquiries
(Gioia, Corley and Hamilton, 2013). Whereas, deductive approach in research is not considered
because it creates one-way communication which negatively influences on researcher while
collection of data from the selected population. Therefore, as compare to deductive approach,
inductive research is more concrete, accurate and realistic method. Inductive approach is
essential and valuable method for researcher to use and collect valid information regarding the
effectiveness of outsourcing and offshoring business practice of a Retailer. This method will also
assist an investigator to draw valid conclusion and gain better outcomes for current study.
Research Choice
There are essentially two choice of research for researcher that are qualitative and
quantitative. In this, quantitative research choice completely relies upon numerical and statistical
data gathered from various sources. On the other hand, qualitative research choice relies over
human perception, beliefs and knowledge. Both methods has their own importance in different
investigations. In the current study, researcher have used qualitative research as it will be
valuable in gathering relevant information from selected respondents. This will lead to
attainment of result in rightful manner (Miller and et. al., 2012) .
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Sampling
Sampling refers to the effective method of choosing sample size from the overall
population. Sampling is done from different methods such as probabilistic and non probabilistic
strategy. These types are further classified into few sections that is stratified, judgemental
sampling, systematic and random sampling. In the current investigation, researcher have used
random sampling method for selecting sample size for current case. Random sampling method is
provides equivalent chance to all respondents to get selected. This ultimately supports them
choosing right sample size without any kind of bias activity. For current research 50 respondents
have been chosen by researcher through random sampling method (Mykhaylenko and et. al.,
2015).
Time Horizon
This is termed as an important tool that provides knowledge on the starting and ending
time of investigation activities. Usage of Gantt chart represents actual knowledge on required
time frame which is going to be consumed in the whole research (Oshri, Kotlarsky and
Willcocks, 2015).
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Data Collection
Primary and secondary are introduces as a two crucial types of data collection method.
Questionnaire is consider as a part of primary method of data collection. It is utilised by
researcher for collecting primary information from the participant. On the other side, magazines,
books etc. are consider secondary source of data collection. As it will also used by researcher for
gathering secondary information from the respondents (Quinlan and et. al ., 2019).
Research instruments
Questionnaire
Q1) Are you aware about the concept of offshoring and outsourcing business of a company?
a) Yes
b) No
Q2) According to you, what are the more popular and useful options for international entry?
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a) Exporting
b) Partnering
c) Greenfield venturing
d) Acquisition
Q3) What are the best options for outsourcing for M&S?
a) Professional Outsourcing
b) IT Outsourcing
c) Manufacturing Outsourcing
d) Project Outsourcing
Q4) What are the best options for offshoring for M&S?
a) Information technology outsourcing
b) Business process outsourcing
Q5) What are the benefits availed by M&S by offshoring its business at international market?
a) Low labor costs
b) Cheap availability of resources
c) Less government interference
Q6) What are the risks availed by M&S by offshoring its business at global level?
a) Cultural Barrier
b) Competitor risk
c) Poor communication
Q7) What are the strategies of managing risks of offshoring in M&S in global context?
a) Adoption of training programs
b) Set up marketing tools and techniques
c) Implementation of Flat communication
Q8) What are the advantages availed by M&S by outsourcing its business internationally?
a) Reduce operating cost
b) Improvement in quality
c) Focus on main business activities
d) Access to highly qualified skill pool.
Q9) What are challenges availed by M&S by outsourcing its business operations globally?
a) Unanticipated Costs
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