manager's job

From Outsourcing and Offshoring Strategies to Extreme Outsourcing.

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     The tendency today is to adopt global sourcing and offshoring. The

 

propensity to outsource most of the functions and processes can take an

 

extreme form. This can lead to the formation of a virtual organization, where

 

all the productive and economic processes have been outsourced. In a highly

 

dynamic, inter-connected and competitive capitalist environment, firms (and

 

in general all organizations) must abide by the principle of business

 

rationality. Every managerial action must be chosen based on the alternative

 

that maximizes both economic efficiency and profitability. These conditions

 

guarantee the maximum production of shareholder value.

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    The business rationality criterion can be described by the following rule:

 

only carry out services at a lower cost than similar ones that can be provided

 

by outside firms. Outsourcing those functions that are "losers" with respect

 

to the market is an essential part of the criteria. At the organizational

 

functions level, the business rationality criterion can be described by the

 

following rule: only carry out those functions within the organization that

 

provide services at a lower cost than similar ones that can be provided by

 

outside firms, given the same level of reliability and risk regarding the

 

continuity of supplies, outsourcing those functions that are inappropriate

 

with respect to the market.

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     The term "outsource" is used to refer to a process or activity in which a

 

product or component originally produced in-house is regularly entrusted by

 

an organization to an external company (the outsourcer, supplier, or

 

provider), who is responsible for producing it. The most important and

 

complex phase is the choice. of outsourcer, especially if the company already

 

has  a network of relationships with outside suppliers. After deciding which

 

activities to outsource, the outsourcee must plan how to implement this

 

decision. The decision-making process entails the phases described below. A

 

successful outsourcing strategy must consider, all stages of the selection,

 

negotiation, and transfer of activities, as well as the relationship to enter with

 

the supplier. The tendency to outsource most of the functions can take on an

 

extreme form, which we can define as extreme outsourcing.

 

 

Team 4 – Productivity – Outsourcing/Offshoring

Works Cited

Pellicella, Michela. “From Outsourcing and Offshoring Strategies to Extreme Outsourcing.” Economia Aziendale Online: Business and Management Sciences International Quarterly Review. Vol.8, no.1, 2017, pp.33-44. DOI: 10.13132/2038-5498/8.1.33-44.