Answer to Question #223416 in Management for Feruza

Question

Discuss the reasons why managers may choose to outsource and also identify the disadvantages of outsourcing for an organization.

Answer 1

 Reasons why managers may choose to outsource

• Flexibility-Companies require the capacity to expand or shrink swiftly in today's global economy, fraught with unpredictability. Unfortunately, given today's labour regulations, it isn't always achievable since employee lawsuits are at an all-time high. Companies can avoid this risk through outsourcing, allowing them to respond more rapidly to growing or falling demand.
• Efficiency- Companies can spend weeks, sometimes months, just finding people for a particular in-house department. 

Disadvantages of outsourcing for an organization.

• Service delivery which may be late or fall short of expectations
• Confidentiality and security may be jeopardized due to a lack of flexibility in the contract
• The contract may be too inflexible to handle change management challenges.
• Changes at the outsourcing firm may cause tension and instability.