Question: Outsourcing A popular term for make-or-buy decisions is outsourcing decisions . There are many examples of outsourcing, from Nike's outsourcing of nearly all its production activities to small firms' outsourcing of their payroll activities. Especially popular outsourcing activities are warehousing and computer systems. The purpose of this exercise is to share information on different types of outsourcing decisions. It can be done in small groups or as an entire class. Each student should pick an article from the literature that tells about a particular company's outsourcing decision. There are many such articles: A recent electronic search of the business literature turned up more than 4,000 articles. An easy way to find such an article is to search an electronic database of business literature. Magazines that have published outsourcing articles include Fortune , Forbes , Business Week, and Strategic Finance . Many business sections of newspapers also include such articles. The Wall Street Journal usually has a couple of articles on outsourcing each month.
1. List as many details about the outsourcing decision as you can. Include the type of activity that is being outsourced, the size of the outsourcing, and the type of company providing the outsourcing service.
2. Explain why the company decided to outsource the activity. If reasons are not given in the article, prepare a list of reasons that you think influenced the decision.
3. What disadvantages are there to outsourcing the activity?
4. Be prepared to make a 3- to 5-minute presentation to the rest of the group or to the class, covering your answers to numbers 1, 2, and 3.