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  • Essay / Is outsourcing a division? - 1091

    Outsourcing a DivisionRegardless of the type of business or product line, international companies have realized that change is inevitable in order to maintain a competitive advantage in the global market. Organizational change may lead to a review of overall operational strategy or the need for an organization to expand its business practices globally. Some organizations expand the distribution of their products to users in other countries, while others may choose to outsource their services. Outsourcing has become a means to gain competitive advantage, today and tomorrow (Broedner et al. 2009, Kroes and Ghosh 2010, Wee et al. 2010, cited by Yang, Wacker and Sheu, 2012). Whether making the decision to expand their products or services, organizations often review their operational methodology when operating outside of their home country. This document presents information related to critical thinking processes and decision-making skills that can help managers when tasked with outsourcing services or conducting operations in another country. TLS, Incorporated is an international company that manufactures work boots/shoes, gloves and hats. . The company has only been in business for 5 years; however, due to high demand for its services, the company determined that outsourcing one of its divisions could speed up the manufacturing process and increase the organization's profits. In today's market, companies must consider the entire supply chain, from reduced manufacturing costs to shorter delivery times (Dekker, 2000). Facing expansive growth in such a short period of time, the company knew it had to constantly review its operational strategy and adjust its business practices as necessary. In a diverse environment, ...... middle of paper ...... or business practices for various reasons; the main reason cited is cost-benefit (Isaksson and Lantz, 2015). Before making the decision to outsource, TLS management considered the pros and cons of outsourcing and determined that the benefits outweighed the risks. An effective approach for managers to evaluate the potential outcomes of outsourcing is to use a decision-making model. Whether managers prefer prescriptive or descriptive decision making, during the decision-making process, organizations sometimes evaluate the situation to determine whether outsourcing will satisfy their expanded or newly implemented operational strategy. TLS Incorporated - a manufacturing company - chose to outsource a division overseas; the TLS manager anticipates that, based on their decision-making skills and critical thinking process, the decision to outsource will benefit the organization as a whole..