Outsourcing and Insourcing in an International Context

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M.E. Sharpe, Sep 6, 2005 - Business & Economics
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Designed for upper-level undergraduate or graduate courses in production-operations management, management information systems, international business, and strategic management, this text focuses on concepts, processes, and methodologies for firms planning to undertake or currently involved in outsourcing-insourcing decisions.

Outsourcing and Insourcing in an International Context is the only available text that includes coverage of the international risk factors associated with this strategy. The book presents a balanced view of the positive and negative aspects of outsourcing, and provides essential coverage of the fundamental techniques involved in any outsourcing-insourcing decision. In addition, it discusses the ethical ramifications of outsourcing for companies and governments around the world.

Each chapter includes learning objectives, discussion questions, and sample problems. An Instructor's Manual and Test Bank are available to teachers who adopt the text.

 

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Contents

Introduction to OutsourcingInsourcing
3
What Is OutsourcingInsourcing in an International Context?
5
Types of OutsourcingInsourcing
6
Why Use Outsourcing?
9
The Economics of Outsourcing
10
Outsourcing Trends
12
Risk in the OutsourcingInsourcing Process
14
How This Book Is Organized
17
BreakEven Analysis
102
Return on Investment
104
Internal Rate of Return
105
Accounting Rate of Return
106
Payback Period
107
CostBenefit Analysis
108
An International Context Risk Rejoinder
114
Alternative Unit BreakEvenRisk Methodology
116

Summary
18
Discussion Questions
19
Advantages and Disadvantages of OutsourcingInsourcing
21
Information Technology IT Outsourcing Industry
22
Industry Recognition and Support
23
What Are the Advantages of Outsourcing or Disadvantages of Insourcing?
24
Linking an International Context with Outsourcing Advantages
27
Linking an International Context with Outsourcing Disadvantages
30
Risk and Outsourcing Advantages and Disadvantages
31
Summary
33
References
34
OutsourcingInsourcing Strategy and International Risk Factors
36
Relationship of Organizational Strategic Planning and OutsourcingInsourcing
38
Relationship of OutsourcingInsourcing with International Business
40
Risk Factors in an International Context
41
Case Studies on the Complication of Risk Factors
43
Summary
46
Concept Questions
47
Planning International OutsourcingInsourcing
49
Strategic Planning Steps in OutsourcingInsourcing
50
Internal Organizational Analysis
51
External Environmental Analysis
52
Choice of OI Strategy for NonCore Competencies
54
Establish Goals and Draft Outsourcing Agreement Specifications
55
Identify and Select Outsource Provider
56
Negotiate Measures of Outsourcing Performance and Goals
61
Operational Planning Steps in OutsourcingInsourcing
63
Evaluate Outsourcer and Provide Feedback
66
Case Study on Avoiding Risk in International Outsourcing
67
Summary
69
Review Terms
70
Methodologies for Different Types of OutsourcingInsourcing Decisions
73
International Outsourcinglnsourcing MetricsBased Methodologies
75
RatingScoring Metrics and MultiCriteria Scoring Methods
77
Metric Accuracy and the Delphi Method
80
External Benchmarking and Gap Analysis
81
External Benchmarking Procedure
82
Gap Analysis
84
Measuring International OI Risks
86
Economic Risk Factor Assessment
87
Politics Risk Factor Assessment
90
Summary
93
Methodology Problems
94
References
96
Financial Methodologies for the Initial OutsourcingInsourcing Decision
98
Present Value Analysis
99
Net Present Value
100
Summary
119
Review Terms
120
References
123
Methodologies for Selecting OutsourcingInsourcing Partners
125
Preliminary Selection Considerations and Risk Factors
127
Screen Out Higher Risk Providers
129
Benchmarking as an Ex Post Selection Method
131
Decision Theory Methods for Partner Selection Decisions
132
Decision Theory Model Elements
134
Decision Theory Model Formulation Procedure
135
Decision Making Under Risk
136
Decision Making Under Uncertainty
138
Geographic Distance Selection Methodologies
142
Summary
144
Review Terms
145
Discussion Questions
146
References
148
Methodologies for Allocating Business Activities Between Outsourcers and Insourcers
150
Game Theory Methodology for OI Proportional Allocation Decisions
152
Game Theory Model Elements
153
Game Theory Model Formulation Procedure
154
ComputerBased Solutions for Game Theory Problems
155
Linear Programming for OI Proportional Allocation Decisions
157
LP Model Elements
158
Linear Programming Model Formulation Procedure
160
ComputerBased Solutions for Linear Programming Problems
167
Extending the LP Solution with Duality and Sensitivity Analysis
170
Linear Programming Model AssumptionsLimitations
173
Summary
175
Discussion Questions
176
References
180
There Are Wrong Ways and Rights Ways to OutsourceInsource in an International Context
182
The Wrong Way to OI
183
Avoid Outsourcing Critical Information and Relying on Trust
184
Avoid Outsourcing Just to Make the Accounting Books Look Good
185
Avoid Outsourcing Just to Handle or Deal with Labor Problems
186
Avoid Outsourcing Business Activities That Are Easily Copied by Outsourcing Firms
187
Avoid International Outsourcing Risks in Foreign Countries Where You Will Be at a Disadvantage for Reasons of Politics Culture Economics or Dem...
188
Evolution of Industries
190
Loss of Outsourcing Industry
191
Seek to Use OI as an Organizational Transformational Process to Learn New Ideas Train Personnel and Implement New Technologies Processes
192
Seek to Use OI as a Means to Further International and Global Business
193
Possible Consequences of Right Way 01
194
Industry Ethics Program
197
Review Terms
199
INDEX
203
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