Global Sourcing Advantages and Disadvantages

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Date Submitted: 01/24/2011 03:05 AM

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//Global sourcing is considered to be a beneficial service, which the companies are using now a days in their daily operations. While writing this paper, the advantages and disadvantages of global sourcing will be explained. Followed by this, explanation will be given in the favor of outsourcing a product or service within your organization to a foreign country//

Global Sourcing advantages and disadvantages

Global sourcing helps in making the business grow well all over the world. All the businesses are focusing on this aspect and are gaining various advantages, global sourcing offer both advantages as well as disadvantages to the service and manufacturing organization. In a service organization, internal strategies are used, while, in manufacturing organization, external strategies are used. The basic advantage of global sourcing is that it offers cost advantage to those companies that are adapting outsourcing. It is considered to be a strategic planning for the companies who are focusing to have alternative business partners, which will help them in reducing the overall production cost. Some of the areas of global outsourcing are website, website designing, software development, etc. Additionally, production overhead cost is also reduced, of the service and manufacturing companies with the help of global sourcing. Products and services of the companies are sold globally. Further, global sourcing helps in the business in knowing its potential market and working according to that. The other advantage is that talented pool of resources is identified, which may not be available domestically (Jones, 2010).

On the other hand, the disadvantage of global sourcing is that the management has to be skilled and talented, so that the business can be handled globally. If the managers are not able to handle the business in the best possible manner, it will run down into losses, which will affect its growth in the global market. The cultural environment and...