HI5013 - Managing Across Borders: Outsourcing in Global Context

This report delves into the multifaceted concept of outsourcing within the context of global business. It begins with an overview of outsourcing, highlighting its significance in contemporary business environments where efficient asset management and a focus on core competencies are paramount. The report explores both the merits and demerits of outsourcing, examining advantages such as cost reduction, operational efficiency, and time savings, while also addressing disadvantages like security risks and potential quality issues. The analysis further investigates the role of outsourcing in the global business scenario, providing real-world examples such as Slack and TransferWise to illustrate how companies utilize outsourcing to enhance their operations, reduce risks, and gain a competitive edge. The conclusion emphasizes the importance of strategic outsourcing for companies seeking to optimize processes and achieve sustainable growth.

Running head: MANAGING ACROSS BORDERS
Managing Across Borders
Name of the Student
Name of the University
Author note

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Executive Summary
The assignment has thrown light on analyzing the different kinds of usages of
outsourcing of the business activities which plays a vital role in the growth of the
companies. In addition, it has been seen that there are different issues such as theft
of the private and confidential data which can create huge impact on the growth of
the companies are required to be addressed appropriately which will be suitable for
the overall success and growth of the companies in a true manner.

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Table of Contents
Introduction...................................................................................................................3
Overview of Concept Outsourcing................................................................................3
Merits and Demerits of Outsourcing.............................................................................3
Advantages...............................................................................................................4
Disadvantages..........................................................................................................4
Analysis of Role of Outsourcing in Global Business Scenario.....................................5
Conclusion....................................................................................................................6
References...................................................................................................................7

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Introduction
The respective assignment helps in the understanding of the outsourcing
related activities in the business scenario. The outsourcing is considered to be the
most cost-effective and saving strategy when it is being utilized properly which is
more affordable for the different companies to manage the different core activities in
business in a suitable and appropriate manner. The main aim of the respective
essay is to understand the different kinds of pros and cons of the concept
outsourcing in the business-related activities along with role of the same in managing
the different core and side business activities together.
Overview of Concept Outsourcing
As commented by Yousuf and Felföldi (2017), in the present complex
business environment, the development of the business mainly depends on effective
asset management which is inclusive of the maximum related concentration of the
different resources on core activities of the company. In such scenario, as opined by
Jyoti, Arora and Kour (2017), outsourcing of the processes related to the business
which is considered to be the emerging view related to optimization of the various
enterprises. In addition, outsourcing is considered to be the transfer of the non-core
activities of the business to the third parties which can perform such activities within
a specified time span. Moreover, as stated by Wachira, Brookes and Haines (2016),
there can be outsourcing of the different activities which includes the involvement of
the employees of the other firms and in the today’s present scenario, the outsourcing
is utilized in various kind of scenarios and it is mainly used in the logistics and
warehouse aspects.
Merits and Demerits of Outsourcing
As stated by Vaxevanou and Konstantopoulos (2015), the outsourcing has
included the different kinds of advantages and disadvantages which affects the
growth of the firms negatively. Outsourcing does have different advantages which
are significant in nature and there are different number of corporations which have
accepted the respective policy of the business and they are facing numerous kinds
of benefits in the present scenario. In addition, as commented by Fountain and

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Langar (2018) the proper transferring of the business-related activities and functions
may bring the sound savings as the business-related activities in the low-cost related
countries are cheaper in nature than inside.
Advantages
As commented by Davari and Rezazadeh (2015), the outsourcing of the
different activities helps in reduction of the costs when the companies opt for
outsourcing. These are the different costs which refers to the expenses for the space
of office or the employee’s fees which can be outsourced and it is proved to be one
of the most suitable and cheaper than the different workforce who will be coming
from the developed countries.
Secondly, as opined by Alojail and Corbitt (2016), the other widely known
benefit which can be provided through outsourcing is the high speeding of time
wherein the outsourced work is being done in a suitable manner. The great example
for utilization of the time in the company is the hiring related procedure of the
different employees for the proper creation of the new team and outsourcing of time
will be suitable for the growth of the firms.
Moreover, as opined by Ali et al. (2017), the outsourcing of the different
activities in business can lead to the operational efficiency wherein the different
individuals or the companies can have opportunity to concentrate more on the
different initial charges and they can perform better in the different other departments
which are core business related activities suitably.
Disadvantages
On the other hand, as commented by Ali et al. (2017), there are different
disadvantages of the outsourcing of the business activities which includes the risks
related to quality as it can affect the reputation and brand image of the company
negatively. For instance-When a customer purchases a particular product from a
shop, however after their purchase, it has been seen that there is no such substitute
available, in such scenario, the company needs to contact the outsource supplier
which will be suitable for carrying the burden of the damaged product.
The other aspect which can be the major disadvantage of the outsourcing is
the security as there can be loss of data along with theft of the data which can affect

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the growth of the company negatively. It can be seen that it is important for the
different customers to know that it is being respected and they can trust the company
relating the same. However, the confidentiality of the data can be threatened which
will be affecting growth of company inappropriately.
Analysis of Role of Outsourcing in Global Business Scenario
In the present scenario of the complex business environment, there are
different utilization of outsourcing of the activities which leads to the suitable growth
prospects of the company. Through the implementation of outsourcing in the
different business organizations, it will be beneficial in reduction of the different risks
which are associated with the same as they are being passed on to the organization
which provides the services related to outsourcing. Additionally, as commented by
Ali et al. (2018), there can be decrease in the overall percentage of the capital
investments that often goes to the contractor company and the main focus is on the
core competencies which is suitable in promoting the improvement of the key
processes as well as gaining the additional kind of competitive advantage that will be
suitable for enhancing the future in a proper manner.
For instance- Slack is one of the suitable applications through which it was
suitable in communicating with the different in-house staffs along with various other
teams (Slack.com 2019). However, after outsourcing the beta testing, Slack was
being able to receive the different essential feedback which helped them in creating
a tool along with personality among the different customers in the market.
From the respective instance, it can be identified that outsourcing helps in
allocation of the specific processes of business to the specialist kind of external
service provider which makes the tasks more effective. As commented by Kim, Jang
and Yang (2017), there are few items which are temporary and due to the same, the
proper intention of hiring the experienced professionals in such scenario helped the
companies in making the aspect better and due to the same, it has been successful
in enhancing the business-related opportunities in a positive manner.
For instance- TransferWise is one of the other suitable examples which is the
most widely used money transfer aspect. It is helpful in monitoring and managing the

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different payments which are being made to the remote employees. and it is suitable
for the business-related growth in a positive manner (Transferwise.com 2019).
The respective instance helps in understanding the different kinds of aspects
which are related to outsourcing and it has been helpful for the companies in
outsourcing the activities suitably which will be providing them benefits.
Conclusion
Therefore, from the above, it can be concluded that outsourcing means the
proper transfer of the processes related to logistics to the third party. The actual
essence of the services is regarding reduction of the costs associated with the
company, proper implementation of the supply of the different products along with
involvement of one or more than one qualified professional who will be suitable for
making the process effective. The different examples of the companies have helped
the overall process related to outsourcing that enhanced the growth prospects of the
company positively within a specified timeline along with becoming the most
advantageous solution for the growth of the company suitably.

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References
Ali, S., Hongqi, L., Khan, S.U., Zhongguo, Y. and Liping, Z., 2017. Success factors
for software outsourcing partnership management: An exploratory study using
systematic literature review. IEEE Access, 5, pp.23589-23612.
Alojail, M. and Corbitt, B., 2016. Does the ITIL Service Quality Framework Improve
Outsourcing Relationship Outcomes?. Journal of Advanced Management Science
Vol, 4(6).
Davari, A. and Rezazadeh, A., 2015. The measurement of entrepreneurial
outsourcing: preliminary scale development, dimensionality assessment, and
construct validation. Journal of technology management & innovation, 10(2), pp.211-
224.
Fountain, J. and Langar, S., 2018. Building Information Modeling (BIM) outsourcing
among general contractors. Automation in construction, 95, pp.107-117.
Jyoti, J., Arora, H. and Kour, S., 2017. Outsourcing and Organizational Performance:
Role of Cost Leadership, Differentiation and Innovation Strategies. Sustainable
Competitive Advantage: A Road to Success, 171.
Kim, S.H., Jang, S.Y. and Yang, K.H., 2017. Analysis of the determinants of
Software‐as‐a‐Service adoption in small businesses: Risks, benefits, and
organizational and environmental factors. Journal of Small Business
Management, 55(2), pp.303-325.
Sclak.com 2019 Where work happens | Slack (online) Retrieved from
https://slack.com/intl/en [Accessed on 16th August 2019]
Transferwise.com 2019 Transfer Money Online | Send Money Abroad with
TransferWise (online) Retrieved from https://transferwise.com/ [Accessed on 16th
August 2019]
Vaxevanou, A. and Konstantopoulos, N., 2015. Basic principles the philosophy of
outsourcing. Procedia-Social and Behavioral Sciences, 175, pp.567-571.

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Wachira, W., Brookes, M. and Haines, R., 2016. Viewing the impact of outsourcing
from a Kenyan perspective. Asian Journal of Management Science and
Economics, 3(1), pp.24-43.
Yousuf, A. and Felföldi, J., 2017. The Relationship Between Transaction Costs And
Flexibility In Outsourcing: A Conceptual Framework. The Annals of the University of
Oradea. Economic Sciences, 26(1), p.883.