Benefits and Risks of Offshoring in Retail: Tesco Analysis

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THE BENEFITS AND RISK OF
OFFSHORING AND OUTSOURCING IN
RETAIL INDUSTRY– A CASE OF TESCO
RESEARCH PROPOSAL

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TABLE OF CONTENTS
RESEARCH TOPIC............................................................................................................................3
AIMS & OBJECTIVES.......................................................................................................................3
RESEARCH QUESTIONS.................................................................................................................. 3
RATIONAL OF THE RESEARCH........................................................................................................ 3
REVIEW OF LITERATURE................................................................................................................ 4
RESEARCH TIME PLAN....................................................................................................................5
RESEARCH APPROACH AND METHODOLOGY................................................................................6
REFERENCES...................................................................................................................................9

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RESEARCH TOPIC
The topic for conducting the research is “The benefits and risk of offshoring and outsourcing in
the retail industry – a case of TESCO”.
AIMS & OBJECTIVES
The research project has been aimed at determining the risks and benefits which are associated
with the outsourcing and the offshoring of information technology within the retail industry by
taking the case of TESCO limited (Jabangwe et al., 2016).
The major objectives which are established for undertaking the studies are:
1. To examine the impact of offshoring and outsourcing of the information technology
2. To evaluate the risks and benefits associated with outsourcing and offshoring for the
players within the retail industry
3. To make a critical evaluation of the risks and benefits of outsourcing on Tesco
4. To form an opinion on the positive and negative aspects of both the outsourcing and
offshoring of information technology on the retail industry players.
RESEARCH QUESTIONS
The research questions for this study are as follows:
1. What are the impacts on the major players of the retail industry owing to the
outsourcing and offshoring of the information technology?
2. How is TESCO impacted by its decision of undertaking offshoring and outsourcing of the
IT services?
RATIONAL OF THE RESEARCH
The researcher has chosen this research topic owing to his personal interest in determining the
positive and the negative impacts of outsourcing and offshoring on businesses existing within

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the retail industry (Gurung and Prater, 2017). The inclination of the researcher is specifically
towards the outsourcing of information technology by the retail players. Also, there is huge
ambiguity in the impacts of offshoring and outsourcing since long. Therefore, the researcher
can gain in-depth clarity about the research topic by conducting a study on his own on the
relevant areas of investigation (Sharma et al., 2016).
REVIEW OF LITERATURE
OFFSHORING
Jeon and Kwon, (2018) have stated in his studies that offshoring is being considered as the shift
within the business activities from the home country of operations of any business organization
to its host countries. The host country is the location other than the country where the business
is headquartered. Acemoglu et al., (2015) argued in his studies that the business organizations
focus on the offshoring activities with the major objective of ensuring a reduction in the overall
cost of operations. This can be ensured by the organizations by making substantial use of the
cheaply available resources within the host country. In the same manner, Li and Zhou, (2017)
has argued that the offshoring does not necessarily mean the transfer of all the operations of
the company from one place to another. The companies can also transfer or shift a part of the
operations, which can either be the service centers or the production houses, which would be
helpful in gaining cost advantage for the company.
OUTSOURCING
White and James, (2017) have defined outsourcing as the method of subcontracting. Pati et al.,
(2018) have further defined outsourcing as an efficient method of delegation or the transfer of
the other business activities to the external organizations or the service providers. External
organizations tend to be efficient in the specialized activities undertaken by them. In addition to
this, it has been argued by Gurung and Prater, (2017)that the outsourcing of activities which are
secondary for the business organizations would be helpful for the organizations in ensuring that
they focus on the core activities. Duhamel et al., (2018) stated in his studies that the
operational and the information technology operations can be outsourced by the organizations

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to either the domestic players or the foreign players. By indulging in the outsourcing activities,
the retail organizations would be benefitted in terms of the reduced IT costs, access to the
highly skilled workforce along with acquiring high-quality goods and services. This would also
enable the business organizations to ensure that they have their major focus on the core
business activities.
OFFSHORE OUTSOURCING
Bruccoleri et al., (2018) stated that the rapid changes in the preferences of the consumers are
leading to the adoption of offshore outsourcing for the development and the improvement of
the information system within the retail industry. Choi et al., (2018) stated in their studies that
the retail organizations can gain economic benefits by using a dedicated team for the
development of IT infrastructure, rather than making substantive uses of the various available
outsourcing schemes (Jabangwe et al., 2016). This is being emphasized by the researchers
owing to the fact that such investments have higher benefits in the long run.
In contrary to this, Yadav et al., (2018) argued that in situations of the lack of IT knowledge with
the retail companies they can depend on the offshore development centers. These
development centers are also beneficial in situations when the organizations lack the required
workforce and the knowledge for the development of the same. This situation can arise as a
result of the simultaneous functioning of numerous projects within the organization.
RESEARCH TIME PLAN
The Gantt chart would be used by the researcher for defining the timeline of the various
activities which needs to be undertaken for ensuring the successful completion of the research
project (Mohammad et al., 2016). Gantt chart is a tool which can be efficiently utilized by the
researcher in defining the project timeline and ensuring that the project activities are
completed within the predetermined time duration.
The time plan for this particular study is being depicted by using the following Gantt chart:
Task Week Week Week Week Week Week Week

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1 2 3 4 5 6 7
Analysis of the research problem
Defining the aims and objectives
Undertaking a literature review
Designing of the research process
Collection of required data
Derivation of results and forming
conclusions
Presenting Findings and providing
recommendations
By adopting this chart, the researcher would be in a successful position of determining what
steps needs to be undertaken by him in chronological order for ensuring the successful
completion of the research study (Gantt, 2015).
RESEARCH APPROACH AND METHODOLOGY
RESEARCH DESIGN AND APPROACH
The research can be undertaken by the researcher by using the inductive and the deductive
approach. In the case of these studies, the researcher would adopt the inductive approach. This
means that the researcher would make use of the specific case of the TESCO, a retail
organization for determining the impacts of outsourcing and offshoring of information
technology on the overall retail industry (Bell et al., 2018). Thus, it can be said that the
deductive approach would provide great ease to the researcher by providing him with
adequate information just by analyzing the case of the TESCO.
DATA COLLECTION METHODS

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The researcher would take substantial efforts for gathering both the qualitative and the
quantitative data for accomplishing this research study. The quantitative data would be
gathered by the researcher by using the primary data and the qualitative data by making
substantial use of secondary data. The primary data would be gathered by using the
questionnaires (Quinlan et al., 2019). Similarly, the secondary data would be collected by the
researcher from various sources such as news articles, journals, research papers, and other
similar sources.
The sample size selected by the researcher for gathering the primary data has been considered
as fifty. This means that the questionnaires would be circulated and information would be
obtained by fifty employees working in TESCO. The information collected from the
questionnaires would be based on the identification of the benefits and the risks associated
with the outsourcing and the offshoring of information technology services by the organization
(Sekaran and Bougie, 2016). For the collection of the secondary data, the researcher would rely
upon the studies which have been previously undertaken by other scholars. The researcher
would make use of the thematic analysis for analyzing the research questions and also
providing suitable answers for them (Walliman, 2017).
LIMITATIONS OF THE RESEARCH
The major limitation of this study is that the study is being undertaken only by considering the
impacts of outsourcing and offshoring on a single retail firm from such a wide retail industry.
This could have biases in the results of the study as the impacts of the outsourcing activities can
vary from one organization to another within the same retail industry (Greener, 2018). Also, the
analysis would be subject to thematic analysis which means that the analysis would be
impacted by the personal emotions and the feelings of the researcher.
CONTRIBUTIONS OF THE RESEARCH
The studies undertaken by the researcher would be contributing significantly to the existing
literature about the impacts of outsourcing and offshoring. The results of the present studies
can be used by the other scholars and researchers for forming a base for their studies. The
limitations of the study can also be used by the researchers for undertaking future researches.

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ETHICAL CONSIDERATIONS
It is very important to ensure that the research is being carried out ethically. To ensure this, the
researcher has ensured that the informed consent of the participants. The research topic can
also be associated with the personal sentiments of the researcher. Such sensitive topics must
be taken up with high ethical considerations and also the limits to the maintaining of the
confidentiality for such topics should be established (Werhane et al., 2017). The researcher also
has the major responsibility for ensuring the security of the data while storing and transferring
the same.

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REFERENCES
Acemoglu, D., Gancia, G. and Zilibotti, F., 2015. Offshoring and directed technical change.
American Economic Journal: Macroeconomics, 7(3), pp.84-122.
Bell, E., Bryman, A. and Harley, B., 2018. Business research methods. Oxford university press.
Bruccoleri, M., Perrone, G., Mazzola, E. and Handfield, R., 2018. The magnitude of a product
recall: offshore outsourcing vs. captive offshoring effects. International Journal of Production
Research, pp.1-17.
Choi, J.J., Ju, M., Kotabe, M., Trigeorgis, L. and Zhang, X.T., 2018. Flexibility as firm value driver:
Evidence from offshore outsourcing. Global Strategy Journal, 8(2), pp.351-376.
Duhamel, F., Gutierrez Martinez, I.O., Luna-Reyes, L.F. and Picazo-Vela, S., 2018, July. Managing
IT outsourcing relationships in the public sector in Mexico. In Academy of Management
Proceedings (Vol. 2018, No. 1, p. 15237). Briarcliff Manor, NY 10510: Academy of Management.
Gantt, H., 2015. Gantt chart.
Greener, S., 2018. Research limitations: the need for honesty and common sense. Interactive
Learning Environments, 26(5), pp.567-568.
Gurung, A. and Prater, E., 2017. A research framework for the impact of cultural differences on
IT outsourcing. In Global sourcing of services: strategies, issues and challenges (pp. 49-82).
Jabangwe, R., Šmite, D. and Hessbo, E., 2016. Distributed software development in an offshore
outsourcing project: A case study of source code evolution and quality. Information and
Software Technology, 72, pp.125-136.
Jeon, Y. and Kwon, C.W., 2018. The offshoring threat and wage negotiations: Theory and
evidence. Japan and the World Economy, 45, pp.19-29.
Li, X. and Zhou, Y.M., 2017. Offshoring pollution while offshoring production?. Strategic
Management Journal, 38(11), pp.2310-2329.

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Mohammad, I., van den Broek, H., Boots, M.L. and Wong, R., Oracle International Corp, 2016.
Showing relationships between tasks in a Gantt chart. U.S. Patent 9,336,502.
Pati, R.K., Hashai, N. and Zahra, S.A., 2018, July. Outsourcing and Firm Performance: The
Moderating Effect of Business Group Characteristics. In Academy of Management Proceedings
(Vol. 2018, No. 1, p. 12790). Briarcliff Manor, NY 10510: Academy of Management.
Quinlan, C., Babin, B., Carr, J. and Griffin, M., 2019. Business research methods. South Western
Cengage.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Sharma, V., Sharma, V. and Rajasekaran, K.S., 2016. Web-based and traditional outsourcing.
Auerbach Publications.
Walliman, N., 2017. Research methods: The basics. Routledge.
Werhane, P.H., Freeman, R.E. and Dmytriyev, S. eds., 2017. Cambridge Handbook of Research
Approaches to Business Ethics and Corporate Responsibility. Cambridge University Press.
White, R. and James, B., 2017. The outsourcing manual. Routledge.
Yadav, G., Mangla, S.K., Luthra, S. and Jakhar, S., 2018. Hybrid BWM-ELECTRE-based decision
framework for effective offshore outsourcing adoption: a case study. International Journal of
Production Research, 56(18), pp.6259-6278.