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Outsourcing Essay

1298 words - 5 pages

Ronan McIvor proposes while addressing the concept of outsourcing proposed three dimensions, these are; relative capability position; contributing to competitive advantage; and lastly potential for opportunism (McIvor 2011). Contributing to its competitive advantage, this second dimension appreciates that how such an advantage is realized is key to the determination to outsource a service. Where there are processes that are critical to the organization retaining its competitive edge, and have capacity to run, then such processes should receive substantial strategic attention and should purpose at retaining those processes.
This is based on the fact that the process that critical to a company’s competitive advantage possess an impact upon it to achieve a higher degree of competitiveness through capacity to perform at lower cost or attain a higher distinction than that of their rivals. The ability to perform better is not deemed to be vital to attaining a competitive edge over their competitors as their higher performance is not recognized by their customers, who have little regard of them being key differentiators when purchasing the product.
In regards to Relative capability position, it refers to one understanding why one organization will ultimately perform better than another. This can in most cases be because they perform certain organizational processes relatively better than the others. It is thus paramount to seek into searching into whether the organization has processes that are relative in performance in comparison to their opponents, and without a doubt their suppliers, these being of great significance. The analysis tries to seek if there are any discrepancies in the performance in regards to the organization in comparison to its external prospective providers of the process it intends to outsource. It gives the organization an opportunity to discover as to whether such a move would be a detriment as to its competitive prowess once they outsource the proposed process. Further it gives the organization a chance to determine as to whether it can retain competitive advantage if the processes were internally performed as an ongoing basis, and where this is achievable then the purpose to outsource is diminished. Thus the core purpose of this process is to gain an understanding as to the sustainability of a superior position in the organization’s performance (McDaniel, & Mendenhall 1999).
McIvor’s last dimension that he proposed is potential for opportunism which provides that when an organization is deliberating on whether to outsource, it must seek to realize as to whether it has prospective for resourcefulness from the vendors. The opportunism/resourcefulness that the organization would seek to realize can be indicated by; Physical existence of investments or human resources who have a dedication to achieving a certain affiliation that will generate substituting outlays for an organization. It also could be indicated by aggravation...

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