Bus 630 Week 6 - Outsourcing - Final Paper

Abstract

Outsourcing is the contracting and subcontracting of noncore activities within an organization to free up cash, personnel, time, and facilities for activities that an organization holds a competitive advantage with. Outsourcing data processing, legal, marketing, payroll accounting, manufacturing or other areas of an organization allows for these businesses to concentrate their resources on what they specialize in. (Outsourcing, NA) According to Nussbaum (2005), JetBlue has proven that by outsourcing some of their activities that they have been able to reduce their costs and pass these savings down to their consumers. (Nussbaum, 2005)

Outsourcing

In order to be a success in today’s competitive global market, organizations need to be able to take full advantage of any and all business aspects through which they are able to gain and maintain a competitive advantage over other organizations within the same line of business. Outsourcing has become one such possible aspect for organizations giving them the opportunity to essentially hire an outside organization to complete some of their productions and or services at a reduced cost and or increased productivity rate. However, the decision to outsource is not always going to guarantee an increased profit. Many factors, both negative and positive, have to be considered before deciding whether outsourcing is the proper decision for an organization. Each organization has different needs so if one airline outsources their maintenance this is not a guarantee that another airline is going to see the same results if they were to outsource their maintenance.

“Outsourcing has become a major trend in human resources over the past decade. It's the practice of sending certain job functions outside a company instead of handling them in house.” (Outsourcing, NA) Before a company can determine whether or not it would be beneficial to outsource any portion of their organization it is...