| contemporary business environment has become | | | | addition some internal processes such as internal audit |
| complex and competitive forcing organizations to be | | | | and payroll management are costly to outsource |
| strategic in their internal and external structures in order | | | | (Bragg, 2001, 406). |
| to effectively survive the storm. With globalization | | | | For outsourcing to succeed, the company outsourcing |
| tending to control the flow of international trade, firms | | | | should be capable of validating the outsourced |
| are adjusting themselves with corporate strategies | | | | provider’s ability to provide throughput with |
| that not only involve diversification, but also | | | | expected quality, low cost and within required time |
| organizational structures that can effectively allow | | | | frame. Where a company lacks adequate processes |
| them to gain competitive advantage in the global | | | | to validate this, consequences of poor quality, cost and |
| market. Indeed, globalization and technological | | | | time overruns may result leading to ineffectiveness of |
| advancement have influenced companies to seek | | | | the outsourcing process. |
| ways of optimal space management, cost | | | | Quality of work may feature significantly in the |
| effectiveness, optimal human resource capacity and | | | | outsourcing process especially where the company |
| operational efficiency. In this regard, firms have | | | | outsourcing has no direct contact or control of the |
| resorted to outsourcing various organizational functions | | | | company performing the outsourced function. |
| and maintaining only the most sensitive and those that | | | | Communication problems between the contracting |
| can be easily and competently managed within the | | | | company and the outsourced company may hinder |
| firm. Some of the mostly outsourced functions are | | | | the efficiency of service delivery, especially considering |
| customer service (help desk) functions, technological | | | | that the outsourced company needs to perform the |
| supply and maintenance, human resource recruitment, | | | | tasks with reference to the organizational mission, |
| security services and cleaning services among others. | | | | strategies and goals. It is also worth noting that, the |
| In simple terms, outsourcing may be defined as | | | | overall responsibility and accountability of the results |
| contracting outside agency for the management of a | | | | from the contracted activities lies with the outsourcing |
| firm’s operations that otherwise could have | | | | company and therefore it should be involved in |
| been managed through in-house staff (Lock, p. 149). | | | | decision making as well as constant/regular monitoring |
| Outsourcing may be beneficial to a company | | | | and review of the progress of the outsourced |
| especially in terms of cost saving, production efficiency, | | | | functions. |
| knowledge blending, operational flexibility and resource | | | | Service delivery including customer service may be |
| mobilization. However despite these benefits, | | | | compromised especially where the customers have to |
| outsourcing may have damaging impacts on the firm | | | | contact the contracted firm for business issues. |
| itself especially in terms of quality, customer service | | | | Where a company outsource call center operations or |
| and security. This paper wills discus the reasons as to | | | | technical operations from an oversees firm, |
| why outsourcing is a bad idea for a company. | | | | communication between the company and the |
| Over the last few years, companies, especially the | | | | customers may be affected especially where the |
| multinationals have embraced outsourcing as a means | | | | contracted firm has to make reference (which may |
| of restructuring their business. With the current | | | | take time) from the company or wrong information is |
| economic crisis biting the global business world, many | | | | provided, the customer tends to be less satisfied and |
| firms have found an escape route of downsizing to | | | | may even switch to competing firm in the long run. In |
| outsourcing causing limited negative impacts that could | | | | this case, outsourcing may lead to loss of customers in |
| have been realized through formal downsizing/staff lay | | | | the wrong run due to ineffective communication and |
| off procedure (Hira and Hira, 2008). In addition, many | | | | time overruns. |
| multinationals and transnational have realized the | | | | Outsourcing that involves different countries with |
| benefit of outsourcing services from developing | | | | different time zones may also be ineffective. This is |
| countries where input costs (labor and raw materials) | | | | due to the fact that, the customer who is in the same |
| are cheaper than the developed countries. This has | | | | time zone with company may not get what he/she |
| been one of the major contributing factors behind the | | | | requires from the company directly but has to wait for |
| rapid growth of some developing countries like India | | | | odd hours to contact the outsourced firm. This leads to |
| and some East Asia and African countries. For | | | | dissatisfaction and lost time on the side of the |
| example, most American and Japanese auto makers | | | | customer who may as well seek services from a |
| have been outsourcing labor from India due to low | | | | more flexible company. In addition, customer identity |
| salaries thus saving on operation costs. However, low | | | | and loyalty may be affected as most customers like |
| cost is always the case especially when outsourcing | | | | identifying themselves with the company whose |
| specialized skills that require a huge paycheck. In | | | | products they are consuming. |