Thesis: Risks of Outsourcing

Sample Thesis Paper

If any outsourcing can be done in this regard, it can only be done with the most simplest of parts that can be acquired from alternative sources in the event of the failure of absence of the outsourcing agent to deliver them. Contracting an outsourcing agent to deliver parts that may sometimes have to adhere to customized specifications would be to place a heavy risk on a heavy investment. Furthermore, the option of offshore outsourcing no longer remains a valid question since there is no room for the company to forego the reality of a cultural clash.
Furthermore, the outsourcing of the production of parts for the helicopter company does not necessarily qualify as a repetitive and routine task as was highlighted by Embleton & Wright (1998). The task can take on a highly specific form from time to time depending on the customer in question and any inability of the outsourcing agent to deliver the customized service can lead to the development of considerable complications for the company.
Commons (1931), Coase (1937) and Williamson (1975) held that outsourcing should only be considered as a viable option in cases where the cost of manufacturing a product or service in-house begins to exceed that which the company would incur if it contracted with another company to produce the product or service for it. When considering such definitions and thresholds of outsourcing, it is important to realize that the costs have taken on a varied form where they differ from case to case and no longer span a limited monetary perspective. Costs have become increasingly complicated to ascertain in light of the numerous aspects to which an organization finds itself exposed when it chooses to engage in outsourcing.

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