Answer to Question #216777 in Management for Samtina

Question

1.Explain four reasons why you will insourcing

2.Discuss advantages and disadvantages of insourcing

Answer 1

1.a. It is cost-efficient - With insourcing, certain costs like intermediary costs are avoided. Suppliers who use a value-based pricing method may also be selected.

b. For control over external factors - Outsourcing activities may bring difficulties such as cultural differences, time zones, currency differences, and climate issues. On the other hand, with insourcing, organizations are less often exposed to risks from such differences.

c. Brand building - Consumers generally prefer buying products and services from a nearby brand or provider. With this business activity, organizations create jobs for residents, who form an emotional bond with the organization in their neighborhood.

d. Quality management - Insourcing offers companies the opportunity to guide and control the entire development process. Such allows quality to be monitored in every development phase and implementation. Changes made to a project can get quickly tested, and defects quickly remedied through repairs.

2.a Advantages of Insourcing

• It facilitates Increased control over production and development
• It offers better protection over intellectual property
• It ensures shorter delivery times

b. Disadvantages of Insourcing

• Increase in costs - Although not all companies benefit from producing cheap labor, labor abroad is often more affordable for many companies.
• Another disadvantage of insourcing is that more tasks have to be performed, which may lead to a distraction from core activities.