Walmart on Outsourcing

The outsourced workers were supposed to toil at the complex hierarchy of intermediaries at the bottom. Walmart decided to establish parameters for the working conditions of these new employees where managers were appointed to have direct onsite supervision. Sometimes the managers were not given direct supervision roles, but they were to indirect monitor the suppliers operating costs and then they were to set stringent price demands in realizing the goal of cutting the wage bill. There are also many other products that are too costly to be made in the United States due to higher taxes making the company to outsource them. Therefore, as the COO it was salient that an immediate action has to be taken to curb the company from collapsing due to huge wage bill and skyrocketing manufacturing overheads.

The strengths of Walmart include brand reputation, environmentally friendly products, quality products skilled labor force and an active corporate social responsibility. The brand of Walmart products surpasses many other brands in the market. The manufactured products at Walmart are of very high quality valued from the Walmart workers competencies and capabilities. The workforce is equipped with the state of the art facilities. In corporate social responsibility, Walmart is committed to the protection of the human life, environmental and nature in general. In multinationals, the idea of outsourcing non-core activities gives they cost advantage and a competitive edge from the competitors. Other benefits are involved for example cost restructuring, quality improvement core business innovations and time focus. There are also speed to the market and increased revenue.

As part of the global corporate strategy, most of the multinationals like Walmart are using outsourcing to tap into these benefits. Thus, the outsourcing industry has grown to manifold levels in the past years and has so well impacted in the developing nations. , & Sarkis, J. A joint location and outsourcing sustainability analysis for a strategic offshoring decision.  International Journal of Production Research, 48(2), 567-592. The article insinuates that outsourcing can generally be defined as that process of transferring some business functions and decision rights that includes some factors of production to outside service providers as enumerated by (Dou, & Sarkis, 2010). The terms and conditions subsisting between them are as stipulated in the contract papers. , & Inkpen, A. C. Cultural intelligence and offshore outsourcing success: A framework of firm‐level intercultural capability.

 Decision Sciences, 39(3), 337-358. Ang,& Inkpen, (2008) suggests that Offshoring is another developing trend which is a subset of outsourcing whereby the business function is outsourced from another nation rather than home country of the outsourcing company. Many multinationals not only Walmart have embraced outsourcing and has incorporated it into their corporate strategy. Many developing nations are tapping into it already. These nations are adopting it as it is a crucial driver to their economies. Nevertheless, in the United States, it is receiving criticisms as they indicate that they are experiencing job losses and there is an excellent outflow of their currency to developing nations. It is intimated that outsourcing is not good for the United States and the opposers of it indicate that its effects are far-reaching.

Synthesis When businesses outsource, they achieve competitive advantage to all the multinationals across the globe. This makes them be included in many corporations as their corporate strategy. This act is advantageous as it makes it appear to be a sunrise industry of the 21st century. Though outsourcing does not guarantee big profits, its success is dependent on various factors for example great management of remote locations and the skills that are available in that area. Other factors are external to outsourcing like political stability, enforceability of rights, language skills, and intellectual rights. Outsourcing stands a chance of becoming an industry of the future. It is essential that businesses should increasingly outsource their business solutions so that they meet the needs of the business faster, smarter and cheaper.