Business Research Public and Private Organisations

Question: Discuss about theBusiness Research for Public and Private Organisations. Answer: Introduction In both public and private organisations, outsourcing is one of the most common practices as it is key aspect in the business strategies. Perhaps, now there is outsourcing of few of the functions of the organisations, which earlier the companies used to execute themselves. Because of the vast outsourcing practices, outsourcing has become a recurrent subject in the literature. The researchers have identified several reasons behind the decision of outsourcing taken by the organisations (Oshri, Kotlarsky and Willcocks, 2015). With successful outsourcing, the organisations may forecast to attain numerous advantages, although there also presents several risks which shows that acceptance of outsourcing is not a good option. There is available widespread literature on outsourcing where there presents various decision factors, motivators, risks and benefits, although the disparity, commonalities, gaps and association among the content of the researches have not examined (Mukherjee, Gaur and Datta, 2013). The key aim of the study is twofold. They former part is ten review of the literature on outsourcing with the aim of recognizing those references which can offer guidance to the researchers and the managers. The later part is the analysis of the studies based upon the contents provided. The purpose is to identify the key advantages and disadvantages of outsourcing to the business organisations. Literature Review on Advantages and Disadvantages of Outsourcing Business Functions According to Strassmann, 2006, Outsourcing is a renowned practice under which an organisation or individual manufacture products, perform functions or offer services for another organisation- those functions or tasks that could usually perform in-house. The organisations take use of outsourcing strategy for saving the costs and expenses. (Source: Kremic, Icmeli Tukel and Rom, 2006) As per this outsourcing decision framework, there are several motivation factors which emphasis the business organisations to either have outsourcing operations or not to have outsourcing activities in the organisation. These motivation factors are the benefits which motivates the organisation to have outsourcing operations. The benefits include augmented staff, improved quality, cost savings etc. On the other hand, there are risk factors which restrict the organisation to have outsourcing activities. The risk factors comprises of low morale of the employees, increased cost, insufficient knowledge, etc. Because of the risk factors, the outsourcing is considered as an unproductive option. Whereas by analysing the motivation factors, the outsourcing is recognized as a good option and there are several factors which helps in guiding the outsourcing function. The next part in the process is selection of supplier or outsource partner and once a supplier partner has been selected, the outs ourcing contract takes place and the operations carry on (Kremic, Icmeli Tukel and Rom, 2006). Expected and Anticipated Advantages of Outsourcing The increasing growth of outsourcing proposes that both private as well as public organisations forecast advantages from outsourcing functions. Logically diverse set of organisations in diverse circumstances will anticipate diverse advantages. For instance, all the companies may forecast higher cost savings although in the public or government outsourcing, the distinctive cost savings are just around half of what the private organisations attains (Kremic, Icmeli Tukel and Rom, 2006). It is not possible to comprehensively talk about each and every advantage gained by the organisations but most of the desired advantages are common enough which are shared in almost all the organisations taking use of outsourcing function. The shared advantages which the organisations attained through outsourcing includes higher cost savings, declined capital expenses, capital infusion, transferring of the foxed costs into the variable costs, improvement in the quality, higher speed, increased flexibility, greater access to innovative and latest infrastructure and technology (Dinu, 2015). Other advantages includes easy access to talented and skilled human resource, augmented staff, upsurge focus on the core activities and functions, getting rid of problematic and complex functions, easy to copy competitors, declined scrutiny and politic pressures, favourable legal compliance and improved management and accountability (Grimpe and Kaiser, 2010). Outsourcing is of several factors that includes outsourcing of technology, human resource outsourcing, service outsourcing, labour outsourcing, etc. There are distinctive benefits of human resource outsourcing (HRO) such as HRO gives access to competent and efficient human resources which were not able access because of geographic and demographic barriers. But outsourcing functions help the organisation to take use of the competence, skills and knowledge of the individuals residing miles away (iek and Ozer, 2011). The other advantages of human resource outsourcing include increased organisational productivity, enhanced employee efficiency, higher employee development and minimization of risks associated with attrition rate of the in-house employees (Butler and Callahan, 2014). Technological development and technology integration are the two core advantages of outsourcing business operations. Tayauova critically analyse the benefits and challenges of outsourcing operations and have the arguments that the depth of the advantages are much in comparison with the intensity of the risks and challenges (Tayauova, 2012). The researcher explains the technological advantage of outsourcing as with technological integration there develops innovative solution for the business operations as well as there is development of synergy if the supplier partner has access to pioneering technology. There is faster accomplishment of the tasks and operations through outsourcing as with the improved technology there is less time consumed for the operations performed. There are several under-developed and developing nations which have high availability of low cost labour. This is also one of the primary reasons because of which multinational companies and business organisations of developed nations outsource their business operations to these countries because of high availability of labour at very low costs (Sparrow, 2012). This offers the advantage of cost saving to these organisations. With increased globalisation and industrialisation, the organisations now have an easy and flexible access to the low cost labours of these developing nations by the means of outsourcing operations. The organisations many a times do not possess all kind of competencies and efficiencies fie carrying out the non-core activities. But as a sustainability factor, the organisations have dynamic business operations. The outsourcing offers the advantage of developing efficiency and focus on n on0core activities of the business organisations (Troac? and Bodislav, 2012). This offers diverse set of competitive benefits to the organisation involving in the outsourcing function. There are researches which show that outsourcing offers access to high quality services, professionals and competent workforce which can carry out the non-core activities of the organisation in an efficient and effective manner (Contractor, et al., 2010). Possible Risks of Outsourcing Function The literature also talks about various risks which are linked with outsourcing function. For many of the organisations and the business associations, outsourcing is a new tool for managers, therefore, they do not have complete knowledge of the tool and its associated costs, and this itself is a great risk for the organisations (Tho, 2012). The literature notifies that there is a primary propensity to overemphasize the advantages and that the in the beginning there is improved performance of the suppliers to have good impressions at the initial phase (Ackermann, et al., 2011). But the deficiency of methodology and research results in outsourcing failures. The same philosophy is supported by Philip, Wende and Schwabe, who suggest that the failures in the outsourcing operations is not because of the inherent issues but because of the insufficient guiding methodology for the executives (Philip, Wende and Schwabe, 2013). Another issue or challenge encountered in the outsourcing functions, primarily in the United States, is the insufficient competence within the public sector companies to control monitors and manage the outsourced functions (Massini and Miozzo, 2012). There are numerous risks within outsourcing out of which some are known and some are still not recognized. The challenges, risks and issues shared by most of the organisations dealing in outsourcing operations comprises of risks related to hidden costs and unrealized savings, less amount of flexibility is there is outsourcing operations, poor selection of the outsource partner or poor contract (Jimmy Gandhi, Gorod and Sauser, 2012). There are other threats in outsourcing related to shifting of power to the supplier, problems associated with suppliers such as restricted access to best technology and talent, opportunistic behaviour, awful association and poor performance. As per the views of Nassimbeni, the major risk in outsourcing is of security. There is sharing of organisational data and all the legal aspects including process information, etc. with the outsource partner. There is a potential risk that this information can be further passed on to the competitors (Nassimbeni, Sartor and Dus, 2012). Innovation risk is also a threatening challenge for the companies indulging in outsourcing. Lowman argues that the organisations are highly prone to the innovation risks as due to sharing of data with the suppliers, there is a certain risk of having innovations through development of synergy by having integration of individual competencies and the process innovations of the company providing outsourcing tasks to the supplier (Lowman, et al., 2012). There are other researchers which had their discussion on other several disadvantages of outsourcing such as losing the brand reputation, opportunities and customers of the organisation, increased employee related issues of poor morale due to supply of task to the outsourced partners (Oshri, Kotlarsky and Willcocks, 2015). It also results in skill erosion, legal obstacles, false sense of recklessness and irresponsibility, conflict of interest, increase competitors and loss of synergy (So, 2011). Conclusion The analysis of the literature is influential in recognizing gaps, patterns and commonalities in the literature on outsourcing. In broader perspective, the studies of outsourcing are majorly theoretical type, discussing the motivators for the profits, risks and benefits. Numerous studies have their emphasis and focus upon the risks associated with the outsourcing function in the organisations. The studies address the deficiency in the knowledge of outsourcing business and partner which results in several disadvantages of outsourcing in the later phase of the outsourcing operations. The study demonstrates that the more of public as well as private organisations are involved in the outsourcing operations for the common objective of cost saving. Thus, the organisations which do not have the purpose of cost saving are not involved in the outsourcing practices. The analysis of the discussion states that there are numerous advantages of outsourcing operations that offers competitive benefi ts and increased sustainability to the organisations. Numerous researchers also supports the arguments by providing further analysis to the advantages offered by outsourcing practices. It has also been critically analysed that some of the theorists argues the benefits statement by focusing more upon the negative implication of outsourcing business operations. The framework developed by the researchers argues that the motivators i.e. the benefits and the risks guides the organisation in making outsourcing decisions. There has been identified various gaps in the literature i.e. first, the non-profit organisations are not much involved in outsourcing operations because their key purpose is to serve society instead of saving costs, second, without adequate knowledge, the initial phase shows benefits and the later phase of the outsourcing operations is damaging for the organisations and third, there is lack of objective metrics for the evaluation of the outsourcing results, there is mystification because of presence of advantages and disadvantages both in the outsourcing practice. The literature has potential discussion on the pros and cons of outsourcing but there is l ack in terms of the decision making support and therefore there is a need of additional study. References Ackermann, T., Miede, A., Buxmann, P. and Steinmetz, R., 2011. Taxonomy of technological IT outsourcing risks: Support for risk identification and quantification. Butler, M.G. and Callahan, C.M., 2014. 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