Case Study: Developing an Outsourcing Plan

Paper Summary:

This paper is a detailed case study of an outsourcing plan by an unnamed computer manufacturing company, described by one of the workers in the assembly line. The writer explains the reasons behind the decision to outsource, the various factors involved, and the consequences for the domestic workers, including the closure of 10 manufacturing plants throughout the country. The plan and timeline for outsourcing is described in detail, and the reasons for choosing to outsource in India. The writer also describes the reactions of the employees and consumers and what happened after the plan was carried out. The paper concludes that the full outcome of the decision to outsource will not be realized until the company has been in India for a much longer period of time.

Outline:
Introduction
Background
Plan for the Outsourcing of Manufacturing Jobs
Organizing the Outsourcing Plan
The Development of the Outsourcing Plan
Responses to the Decision to Outsource Jobs
Modifications/Amendments
Evaluation
Review of the Case
Summary

From the Paper:

"The idea to outsource manufacturing jobs was actually spawned by some competitors (Proctor, 2005). The organization recognized that competitors were able to sell comparable products for a much lower price. After conducting some industry research, the organization found that competitors were able to greatly reduce payroll expense and other costs by having products manufactured overseas. As such competitors could pass those savings on to consumers by charging a much lower price. The company I worked for decided that in order to remain competitive they would have to reduce the costs of their products. Such a cost reduction could be accomplished in several ways, reducing the quality of the parts used to produce the product, reduce the workforce or outsource the manufacturing jobs."

Sample of Sources Used:

• Abernethy, M.A. & Vagnoni, E. (2004) Power, Organization Design and Managerial Behavior. Accounting, Organizations and Society. 29: 207-225.
• Alby F. & Zucchermaglio, C. (2006) Afterwards we can Understand went wrong, but now lets fix it? How situated Work Practices Shape Group Decision Making. Organization Studies. 27 (7): 943-966.
• Bazerman, M.H. (2006) Introduction to Management Decision Making. Judgment in Managerial Decision Making. Sixth Edition. John Wiley and Sons Inc. New Jersey
• Beach L.R. and Connolly T. (2005) Choice. The Psychology of Decision Making: People in Organizations. Second Edition. Sage Publications. Thousand Oaks, California.
• Friesen, G.B. (2005). Organization Design for the 21st Century. Consulting to Management. 16(3): 32-51.

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