Introduction to the Paper
The purpose of this paper is to explore the concept of outsourcing, its impact on companies' cost reduction, and the various benefits it offers. The paper will draw upon multiple sources to provide supporting viewpoints on this topic.
All the sources will be appended in the APA format at the end of the paper. "Outsourcing entered the business world in the 1980s and often refers to the delegation of non-core operations from internal production to an external entity specializing in the management of that operation. The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of worldwide labor, capital, technology and resources." (Wikipedia, 2007). Many companies have adopted outsourcing as it allows them to focus on t
...heir core work while leaving support activities to external entities. This enables companies to enhance their core competencies.
Outsourcing allows competent individuals to focus on specific tasks while others handle work in their areas of expertise. Take a look at the company's value chain as shown below:
By analyzing the diagram, we can see that firm infrastructure and human resource management are support activities within the company. To minimize these activities and focus on production, outsourcing becomes necessary. This strategy enables the company to prioritize core activities rather than support functions.
Most manufacturing companies choose to outsource call center and human resource management tasks to avoid complications and maintain efficiency in production. By reducing the time spent on support activities, the company can avoid an imbalance between tasks and ensure timel
delivery to customers.
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