INSOURCING AND OUTSOURCING

Advantages & disadvantages of insourcing and outsourcing

List of sources

Abrahamsson, M., Andersson, D., Brege, S. (2003), "Outsourcing - Från mode och trend till balanserat strategibeslut (Outsourcing - from fashion and trend to a balanced strategy)", Management Magazine, Vol. 5 pp.18-29.

Bardhan, I. (2007). Performance Impacts of Strategy, Information Technology Applications, and Business Process Outsourcing in U.S. Manufacturing Plants. Production and Operations Management, 16(6), 747-762.

Barrar, Peter, Roxane, Gervais, (2006). Global Outsourcing Strategies: The Nature of Outsourcing and Its Present State. Pp1-5

Billi, J. (2007). Assessing uncertainty in outsourcing clinical services at tertiary health centers. The International Journal of Health Planning and Management, 22(3), 245-253.

Choudrie, J. (2007). Meta-abilities and outsourcing: an individual based conceptual framework. Knowledge and Process Management, 16(1), 30-39.

Cooke, F. (2006). Outsourcing HR as a competitive strategy? A literature review and an assessment of implications. Human Resource Management, 44(4), 413-432.

Kakabadse, A. (2005). Outsourcing: Current and future trends. Thunderbird International Business Review, 47(2), 183-204.

Kakabadse, A. (2006). Outsourcing best practice: transformational and transactional considerations. Knowledge and Process Management, 10(1), 60-71.

Lievens, F. (2008). Development and test of a model of external organizational commitment in human resources outsourcing. Human Resource Management, 47(3), 559-579.

Singh, S. (2010). How market orientation and outsourcing create capability and impact business performance. Thunderbird International Business Review, 51(5), 457-471.

Advantages & disadvantages of insourcing and outsourcing

Introduction

Outsourcing is a term known to everybody today. “It is a very popular political issue in United States” (Singh 2010, p457). Outsourcing means a sort of subcontracting a third party for performing a remarkable job. It is a contract given by a company to another one to provide a product or some services which otherwise was to be provided or build by the employees of the company giving the contract. “Outsourcing is the practice of purchasing products or services from outside suppliers instead of producing them in-house. Outsourcing may allow companies to cut costs and improve the quality at the same time” (Singh 2010, p457). Outsourcing helps to provide services to the customers even when the company itself is physically not reachable by the customer and by doing that it makes the job of the companies.

In contrast, Insourcing can be defined as the opposite of outsourcing, and it represents the situation when an organization decides to develop a project or manages a function using the already existing resources (relocate employees from a department to another, or from a project to another - the decision being made based on employees' skills) or to hire new, certificated staff. In most cases, insourcing involves hiring specialists to fill in temporary needs, or to train already existing staff in order to be able to perform different tasks, that otherwise would have been outsourced (Andersson, 2008, 78).

Reasons to Outsource: Its Advantages and Disadvantages

It can be understood from the growing demand of outsourcing that there must be certain reasons which outsourcing offers to the company opting for it. Some of them can be summarized as follows for the flourishing of outsourcing:

1. Outsourcing helps to cut cost, mainly in the field of ...