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BUSN601

17/10/2020 Client: lyjly0 Deadline: 7 Days

50 words agree or disagree to each questions




Q1.


Outsourcing


In the global procurement and outsourcing/insourcing sections of this week's reading lesson, the author states that some advantages of outsourcing are lowered production costs (labor, raw materials, etc.), job creation, and increases in market 'scale and scope' for the entities involved. Short term, this certainly seems to be great, especially for the people accumulating weatlth from it; but long term it will usually be harmful. When a company outsources production, domestic jobs are lost and it is significantly more difficult to maintain quality standards. Further, over one generation or more; domestic skills to perform the work tend to be lost as they cease domestic training and cultivation; for example, if all grain production and breadmaking is outsourced, then domestic populace 'forgets' how to cultivate grain and make bread on large scale. These phenomena weaken the middle and lower classes, while making the upper class stronger in the domestic market. However, there are strategies to help mitigate quality standard loss. For example, if two entities enter into an agreement such that each party will produce something that the other either cannot do well or at all, then there is leverage to motivate each party to maintain quality. For example, one company making textiles and another making shoes; the textile manufacturer starts making fragile fabrics that are unusable, then the shoemaker stops shipping shoes until the issue is rectified. Finally, I also suspect that outsourcing can also lead to higher rates of inflation, regardless if production costs are lowered. I suspect this since it seems to allow greater freedom for the entity to markup their final product pricing, as it is probably much more difficult for consumers in the domestic market to react in any meaningful way. I want to stress that I not certain if this is true; I merely have my suspicions.




Q2.


Outsourcing is a very common business practice that involves using outside companies to perform tasks for the business (Lazzari, 2019). While the dictionary defines insourcing as the practice of using an organization's own personnel or other resources to accomplish a task that was previously outsourced. This week on the topic of outsourcing vs insourcing I think both have a time and a place. Depending on the business type insourcing could be the only option, but I think that when a company gets large enough outsourcing certain things can become necessary. The concept (outsourcing) is most often applied as a cost-savings process and the outsourced is either performed domestically or overseas (Lazzari, 2019). Outsourcing for some companies can be a cheaper alternative than trying to do the same thing in-house. I think outsourcing is a great option because it can benefit more than one company. The company needing the outsourcing but also the employees that are working within the company being outsourced.  I worked at hotel up in the mountains in Colorado and one thing we outsources was our laundry, we didn't have the staff or space to do laundry in-house. For that specific hotel it didn't make sense in the business plan for us to try and do laundry in-house when we didn't have the resources to do so. However, I worked at a larger full service hotel that had the capability to do laundry in-house and at that hotel we even did laundry for other hotels in town that didn't have the capability. Both of these scenarios helped more than one business even though one company I worked for outsourced laundry and the other did laundry in house. I think overall it's important to look at each business plan and decide what would be most beneficial for the business. 


Lazzari, Z. (2019, August 08). The Difference Between Outsourcing & Insourcing. Retrieved October 14, 2020, from https://smallbusiness.chron.com/difference-between-outsourcing-insourcing-32400.html

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