Outsourcing is a common practice in the world of business and global markets and yet it is still one of heavy debate and controversy. People have thrown arguments for and against this practice, ever since it was conceived and both sides have compelling arguments in support of their points. This argument has even gone up to top government levels even and the decision even at that level is split.
So what is outsourcing? The simple meaning of this heavily debated business process is that some parts or components of your business service or product are provided to you from another company that is not your own. You then combine this with your main business or product and sell the whole product to your customer as your own product.
Argument Against Outsourcing
One of the most common arguments against outsourcing comes due to the fact that more often than not, large companies especially, will outsource from other foreign companies. People argue quite heavily against this point because they say that this affects local business and causes an outflow of cash and investment that could otherwise have been utilized locally. This is the point that many government leaders argue on.
The next main point for arguing against outsourcing is that people, especially the customer, are scared that the outsourced business will not retain the same standard as the parent company. This is an argument most often heard by large multinational organizations, whose product is almost synonymous with quality and perfection. Some customers may actually stop purchasing a product if they suddenly realized that some parts of it were not actually made by the main company.
The next argument, though the last listed here is by no means the last argument point, but is one of the larger points. This point is that through outsourcing business run the risk of accidentally or intentionally disclosing trade secrets to others who may later go on to become their competitors. This is an argument most often presented by business leadership opposing an outsourcing decision.
Argument For Outsourcing
The main argument used by businesses as to why they would want to outsource is because it is more cost effective and time-saving to have a professional company, who is already involved in the needed line of business handle it for them. For instance, a large shopping chain would not often bother itself with a point of sale system but would more likely ask a reliable source such as Impos to make and manage the systems for them. This means that the main business can focus on its primary business objectives.
In addition to the cost benefit, outsourcing may actually help improve the quality of a product. If a parent company is focused on quality, it is highly unlikely that they would outsource to a company that does not maintain that same standard. In many cases the standard is much higher than if it was produced in-house. In addition to this, with proper contracts and service agreements, third party companies are more accountable for a poor quality product that in-house employees as contracts can be revoked and monetary fines imposed for poor products. These same contracts can go on to serve as binding legal documents preventing the disclosure of sensitive business information or the misuse of it.
It is a very hard point to give a firm conclusive answer on. From a purely business point of view, outsourcing has many benefits. However, from an ethical standpoint, the right or wrong becomes hard to distinguish. Here, it is up to the individual business to decide on what is best for them and their business on whether it is ethical to outsource or not.