OUTSOURCING

Outsourcing

Outsourcing

Introduction

The term outsourcing is used to refer the phenomenon when a company decides to give away the contract of certain non-core business activities in order to maintain its focus on the core competencies of business. Human resource personnel all over the world have widely criticized the phenomenon, as companies are selecting to outsource their non-core activities to other countries where they can avail the services in lower cost. Majority of the companies in United States outsource their non-core activities to Asian countries like China, India, Pakistan, Bangladesh, and Philippines among others (Haugen, Musser & Lovelace, 2009). This move of outsourcing helps companies to reduce their overall operation cost, while it simultaneously reduces the employment opportunities in United States. In this context, this study is going to examine the case study of Multicore Inc, a multinational company present in more than 19 countries over different continent. The company is mainly the manufacturer of PCs, Tablet, mobile phone and other electronic devices. However, the company has recently decided to outsource it customer service department comprising of over 80 people working in different shifts.

Discussion

This move of outsourcing has been introduced by Multicore Inc in the wave of growing competition in electronic devices manufacturers, and the profit of the company has declined in the past few years. The reason for reduction in the profit is mainly attributed Chinese manufacturers who are introducing products having similar features like of Multicore Inc but in cheap price (Grossman & Helpman, 2002). For concentrating all the energy and focus of the company on development of core competencies while expanding its market share, the company has decided to outsource all its non-core activities, and outsourcing of customer service department is first phase of the outsourcing plan, which will be followed by outsourcing of HR and some part of manufacturing ...