Module 3 Case Assignment
BUS401: Global Human Resource Management
Dr. Cyd Naig-Coloma
According to Answers.com, the definition of outsourcing is the procuring of services or products, such as the parts used in manufacturing a motor vehicle from an outside supplier or manufacturer in order to cut costs. The concept of outsourcing is simple to understand. Projects and works that are dematerialized in nature such as receiving distress calls from consumers are handed over to economies that have low priced labor market. For instance, there is a television commercial out currently for Discover credit card. A call gets made from the United States and is directed to a foreign hut somewhere and a man answers and says, “Thank you for calling US Prime Credit, my name is Peggy. What is problem please?” Though that is a funny commercial, it is exactly what outsourcing is.
One of the advantages to outsourcing can be lower personnel costs. By outsourcing job duties to non-employees, a business does not have to pay consistent wages or offer additional employee benefits. The company may pay lower taxes because independent contractors pay their own withholding, social security, and other taxes. This can add up to substantial savings.
Some businesses choose to take their outsourcing one step further by choosing a vendor, located in another part of the world. Doing so typically saves them more money because they end up paying a much lower wage than would be necessary in their home country. As I stated earlier with the phone call commercial. The problem, as most of us experience, is you get a foreigner who may not speak English so well and that becomes more difficult due to communication barriers.
Another advantage of outsourcing is that it speeds up production time. Most third-party vendors will only be concentrating on one specific task, instead of numerous office duties, and in turn...