Advantages of the Outsourcing Strategy in Business

Published: 2021-09-01 08:10:15
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Category: Human resources, Strategy

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Outsourcing refers to “the act of transferring work, responsibilities and decision rights to someone else”. This usually comes at a fee that the “other person” charges. The main reason that companies undertake this route is that there are others out there who can do it out there at a cheaper and faster rate. In contemporary life, where competition among businesses and organizations intensifies rapidly, one of the instruments that will give the possibility to open access to nearly every resource that is being offered in the market is outsourcing (Noe et al 2006).
Advantages of outsourcing
When an organization wants to undertake this as a strategy towards growth there are quite a number of advantages. Savings Costs
This happens when a business does not require people to work full time on a given task. For example in an Engineering firm; in a case where they require personnel to repair the printing machine. It is very expensive to get an engineer who also has the skills to do this. Instead of employing someone full time they rather have someone who comes on a weekly or monthly basis.
Access to experience an organization gets to access experience that the employers they have don’t have in hand. This comes in handy when the experienced qualified person might be too expensive to be retained by the company or the person is not looking for a job
Improves Performance
Outsourcing skills make the business concentrate on its core functions while still remaining competitive in the market. The employers get time to perform work that is allocated to them without going off course. Organizations get to change suppliers since they are on a contractual basis to be able to get others who are more skilled and cost efficient (Gilley et al 2006).
An organization gets to be more flexible and they can get to be global. Here it is when they source people from different places, for example, an organization in the United States can source people from Kazakhstan to work on the ground without them being physically there.
Looking at the case of Airbnb, which is an online marketplace to provide hospitality services to people who want to lease or rent short-term basis holiday homes around the world. This company does not own anything but acts as a broker where they get a percentage fee for every booking that is made. The opportunities that Airbnb creates are opportunities for social exchange among the hosts and guests. This leads to interpersonal interaction being strengthened (Lampinen et al 2016). This strategy is the new future of networked hospitality businesses. Landlords tend to prefer the short-term tenants being availed to them by Airbnb since they offer a higher rental income and they do not have to deal with troublesome non-committal long term tenants.
However, every new strategy comes with its limitations. There have been accusations that this strategy creates dangerous loopholes since using Airbnb requires no form of identification (Ikkala et al 2015). Competitive concerns and resistance from the hotel industry is also evidence since the house rentals are cheaper compared to hotel rates. Landlords have also driven up rental prices citing long-term tenants are cumbersome as they lead to tear and wear of the property.
In conclusion from my research, outsourcing is a timely strategy, it is moving forward in the direction the world is moving technologically. We expect to see an upsurge of different organizations undertaking this strategy. It has the right balance since the limitations do not overweigh the opportunities which are many in number.

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