Global Sourcing and Outsourcing

Question 1

What is Outsourcing?

Answer 1

Sub-contracting some internal activities to other firms. It is followed by the decision to source a suitable supplier/provider.

Question 2

Outsourcing benefits?

Answer 2

• Cost saving
• Increased flexibility
• Transfer uncertainty
• Focus on core competencies

Question 3

Outsourcing Disadvantages

Answer 3

• Lose of control
• Conflicting objectives
• Loss of competitive knowledge

Question 4

What are some Make or Buy analysis theory/models

Answer 4

• Arnold
• TCE (Transactional Cost Economy)
• RBV and NRBV

Question 5

What is Arnold model to make or buy analysis

Answer 5

To determine weither an acitivity is core or non core to the business.

Question 6

What is TCE

Answer 6

Transaction costs =
- info costs
- cost of making contracts
- bargaining costs

transaction costs are important to consider when thinking about making or buying.

Specificity comes into play. HIgh specificity = high transaction costs and vice versa

Question 7

What is RBV

Answer 7

Ressource Based View is a framework that emphasizes that the firms internal activities are its primary drivers of competitive advantage.