Evaluating Outsourcing Essay

Document Type:Research Paper

Subject Area:Business

Document 1

With this background context, this work focuses on the steps to evaluate the option of outsourcing for a large Middle East manufacturing organization. In evaluating whether outsourcing a division of organization to another country would be suitable for the organization, the essay attempts to describe steps incorporated in such evaluation and whether a prescriptive or descriptive approach would be used for it. Critical thinking skills employed for the evaluation of outsourcing of the division to another country is also presented. Steps in Evaluation The first series of steps would be analyzing the task itself and the impact it would have on the organization in a holistic way. This would be a series of both numerical quantitative assessments and qualitative assessments. In this assessment, the outsourcing matrix could be used. Two important factors are to be considered here for the company which are that of 1) the strategic importance of the outsourcing task and 2) the impact of task on the organization. When assessing strategic importance of outsourcing, does outsourcing give the organization a competitive edge, will be the first question. Some of the critical analysis thinking that goes into here would be that of assessing how organization is competitively positioned currently, and how outsourcing could improve or bring down competitive positioning (Heywood, 2001). Some questions to ask would be, • Does outsourcing improve quality of work for the manufacturing company • Does outsourcing introduce newer revenue streams for the organization? • Does outsourcing give the company better cost-price ratios compared to the current situation, and more. Secondly, the task’s importance on operational performance would have to be assessed.

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This ensures that the understanding of impact on daily operational performance is assessed. When making changes for a company it is critical to assess how daily operations are changed. Some of the critical thinking questions that have to be assessed here are as follows. • Does outsourcing streamline operations of the company? • What form of changes have to be incorporated in order to ensure that outsourcing reaps maximum benefits for the company. • What form of disruption could be caused to daily operations because of outsourcing? • What form of disruption would be caused if outsourcing did not go the way it was planned • How much of the outsourcing task is connected to the main tasks of the organization? • How outsourcing would affect the smooth performance of the organization? and more Prescriptive vs Descriptive Decision Making Prescriptive decision making is where a mathematical model might be used for the decision making and the descriptive model is where the decision maker will consider how the decisions are actually made (Bazerman & Moore, 2008).

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Descriptive approach will be used in this work, because even when a prescriptive approach leads to an optimal decision, the work in question is about people and opinions. Outsourcing relies heavily on HR, and predicting behavior of people to a tee when it comes to the outsourcing operation would be difficult (Caruth, et al. Even under descriptive decision making, by sticking to facts and not assumptions and logically arriving at conclusions, the decision making will not suffer flaws and could be objective. This is discussed in the next section. Some assumptions with respect to operations and performance in the context of outsourcing must be analyzed based on the evidences to back it up. When assumptions are noticed and questioned then the information gaps in such assumptions makes much more sense. Unfounded logic can be identified much more easily and the assumptions when analyzed with other stakeholders will also give a better understanding of the subject.

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So, in considering outsourcing, the manager in charge could consult with other employees to get different perspectives on the decision. This will help in better decision making. The third aspect of the critical thinking process is that of drawing conclusions. Now when people are presented with diverse set of information would work logically to come to a certain conclusion based on the available evidence. They don’t try to generalize something beyond that the appropriated evidence and in doing so draws a conclusion with scope and limits. Now if outsourcing for the manufacturing company is being analyzed for a division, the resultant conclusions should never be generalized for all divisions of the company. It is necessary to not inappropriately generalize beyond the evidence. A. Judgment in managerial decision making. Wiley Caruth, D.

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L. Haden, S. Productivity growth, efficiency and outsourcing in manufacturing and service industries.  Journal of economic surveys, 17(1), 79-112. Heywood, J.  Outsourcing dilemma: the search for competitiveness, the. FT Press.

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