How does outsourcing impact organizational behavior
Benefits of Outsourcing
- Cost savings
- Increased efficiency
- Access to specialized expertise
- Reduced risk
Real-life examples of how outsourcing has impacted different organizations
XYZ Corporation:
XYZ Corporation is a manufacturing company that specializes in producing high-end appliances. In recent years, the company has been struggling with low profitability due to rising labor costs and increased competition.
To address these challenges, the company decided to outsource its accounting and finance functions to an external accounting firm. This allowed the company to focus on its core competencies, while leaving the less critical tasks to the external company. As a result, the company saw a significant increase in profitability and was able to invest in new product development.
ABC Inc.:
ABC Inc. is a software development company that specializes in building enterprise-level applications for large corporations. In recent years, the company has been struggling with tight deadlines and high customer expectations.
To address these challenges, the company decided to outsource its IT support functions to an external IT services provider. This allowed the company to focus on its core competencies, while leaving the less critical tasks to the external company. As a result, the company saw a significant increase in customer satisfaction and was able to deliver projects on time.
Risks of Outsourcing
- Loss of control
- Cultural differences
- Security risks
Summary
Outsourcing can be a powerful tool for increasing efficiency and reducing costs, but it’s important for organizations to understand the potential risks and benefits before making any decisions. By carefully selecting the right tasks to outsource and working closely with external companies, organizations can leverage specialized expertise and reduce their own workload, ultimately leading to better outcomes.
FAQs
Q: What are some common tasks that organizations outsource?
A: Some common tasks that organizations outsource include accounting and finance, IT support, HR management, and marketing services.
Q: How do I know which tasks to outsource?
A: To determine which tasks to outsource, organizations should consider their core competencies and the tasks that are critical to their business success. They should also evaluate the resources and expertise they have in-house and compare them with what an external company can offer.