STR/581 - Strategic Planning and Implementation
March 17, 2014
This Week’s Learning Team Paper will have two parts that will respond to two questions posed by our instructor Robert Powers:
In Part I the Team B, as the sole owner of an organization, will describe specific, strategic criteria that will be used to decide whether to outsource a particular function of a given organization. It will also describe the characteristics of a function that the team would never outsource.
In Part II the team will explain important functions that organizational leaders perform which are different from managers and why are they important. It will also provide an example of each function not described in our textbook.
Strategic Criteria for Outsourcing
A corporation should outsource a function or activity when significant cost or quality related advantage could be obtained. “Outsourcing nonessential functions normally performed in-house frees up resources and the time of key people to concentrate on leveraging the functions and activities critical to the core competitive advantages around which the firm’s long-range strategy is built” (Pearce & Robinson, 2013, p. 287). Stryker Corporation manufactures medical devices such as saws, drills, beds, stretchers, and other specialty medical equipment. ABC has a strategy to remove cost from the manufacturing process to remain competitive in the longer term. In an effort to meet this strategy, ABC made a decision to outsource the area of the business that manufactures electrical boards. The boards will now be produced by a company that produces boards as its core business. By doing this, ABC is able to reduce the costs of manufacturing the medical devices as it does not have to continually buy the specialized equipment needed.
Functions to Never Outsource
The first characteristic of a function that should never be outsourced is any function which represents a core...