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What is outsourcing? Outsourcing is the practice of having some part(s) of the production process (often high-volume, labour-intensive processes) carried out by another company. This is also known as subcontracting.

Advantages of outsourcing:

To reduce costs

To improve the quality of service

To access and benefit from outside expertise

To avoid training costs

Allows the business to focus on the core business

To improve choice

To reduce risk (less investment, less direct employees)

Avoid pay health insurance, pension contributions, etc. for workers

More experts - improved company performance

Disadvantages of outsourcing:

You Lose Some Control:

There are potentially Hidden Costs:

There are Security Risks:

You Reduce Quality Control:

You Share Financial Burdens:

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-Outsourcing

-Practice of having some parts of the production process carried out by another company.

-Aka Subcontracting

-Reduces labour costs and allows the outsourcing company to focus on core activities such as research and design

-e.g. Apple/Nike

-Nike offshores to E and SE Asian factories while apple offshores and outsourced operations to Foxconn

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Outsourcing are when some parts of a production process is carried out by another company by moving parts of the production process to other countries.
Advantages:
- Lower production process --> increase profit
- Risk bearing (spreading the risk out over different sectors)
-Improves quality
-Specialisation --> more efficient
-Increase in research and disadvantage

# data[].attributes.body
Outsourcing is having some parts of the production process carried out by another company
- reduces labour costs
- allows focus on other aspects of the business

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Outsourcing: some operational practices of the production process are carried out by another company

Why do companies outsource?
- To reduce long term costs ( labour may be cheaper in other areas)
- to access outside expertise
- avoid having to pay pension contributors for workers

Advantages
- Proximity to target markets, which allows production to match local demand
- ability to avoid import duties and other trade barriers ( avoid imposition of tariffs and import quotas)

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quality control, security,

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outsourcing is the practice of contracting out business  functions and processes to third-party providers
ADVANTAGES:
- increased efficiency
- improved focus on core business activities
- controlled costs
- greater competitive advantage
- reduce long term costs
avoid trade barriers
- improve quality of service
- access from outside expertise

DISADVANTAGES:
-  security may be at risk
- lack of flexibility
- reduce quality control
- lower environmental laws
- loss of control
- may have hidden costs

# data[].attributes.body
- outsourcing is the practice of having some part of the production process carried out by another company
- a.k.a. subcontracting
- it often reduces labour costs and allows the outsourcing company to focus on core activities e.g. research and design
- companies outsource to improve quality of service, to access and benefit from outside expertise, to avoid training costs etc.

# data[].attributes.body
what? - having some parts of the production process carried out by another company
good? - cheaper costs so more profits, more specialized so more efficient, helps global economy
bad? - takes away jobs so high unemployment, share financial burden

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What is it?
having some parts of the production process carried out by an another company. Usually labour-intensive processes.
Advantages?
reduces labor costs for the company and helps them focus on the main, core activities, things get done faster.
Disadvantages?
can lose control, often have hidden costs, the quality can be reduced, some culture differences or lost in translation

# data[].attributes.body
outsourcing is when a business subcontracts a process to another country. It is advantageous for the business as there are cheaper labour costs and good for the country as it offers job opportunities and improves the skills of the workforce.

Disadvantages: For the country there may be possible mistreatment of workers and can have a negative impact on local environment. For businesses, they lose control over processes and labor costs may inc overtime.

# data[].attributes.body
What is outsourcing? It involves moving parts of production process to another country - having some parts of production processes carried out by another company in order to reduce labour costs and increase focus on R&D e.g: Nike & Foxconn

Positives:
- can reduce labour costs
- can allow for focus on core business & R&D
- companies can avoid paying health insurance and pension contributions
- can lead to better quality of service
-  proximity to target market and matches local demand for cost, quality & quantity
- avoid trade barriers and import duties
- lower corporation taxes
- may benefit from outside expertise e.g Shenzhen SEZ
- economic development in receiving area
- increased standards of living

Negatives:
-  lower environmental laws -> bad the for the environment -> degradation and depletion
-  employees rights laws may be lower/not enforced strongly enough
- loss of employment in HICs/where HQ is based
- cultural loss in receiving country
- may lead to increased prevalence of diseases of affluence
- labour exploitation may arise
- corruption