Current Business Issues and Events and the Activities of Modern Business Leaders

Current Business Issues and Events and the Activities of Modern Business Leaders

In today’s growing corporate business world there are many issues, events, and leadership styles that influence the direction of where a business is heading in the future. Thus, it is important to know what impact these influences have in order for a business to flourish for many years to come. Today businesses have to be aware of the latest technology, global trends, and the leaders they hire to operate in the industry.

Outsourcing, a Popular Trend Among Companies

Reasons for Outsourcing

Outsourcing is a growing trend among major corporations in business. Many of them outsource because they want to cut costs and expenses. Oftentimes companies outsource in order to get a cheaper supplier from one country to the next while others outsource in order to downsize current employees in order to reduce the size of the workforce (Christy, 2008). Companies are after finding cheaper suppliers in less expensive countries to outsource their products. It does not matter if these companies made profits with the suppliers in the previous country. Nevertheless, these companies are chasing for suppliers in the next lowest-cost zone country (Svensson, & Wood 2007). Some companies that outsource do so in order to make room available for focusing on more important tasks and company objectives. Outsourcing allows some of these companies to send work to the outsource partner rather than focusing on handling here in the domestic country. The foreign outsource partner has the expertise and time to focus on specific tasks that the parent company is unable to do. Outsourcing allows a company to delegate or get rid of massive volume amounts of work. Furthermore, these companies can focus on their resources and their core competencies. (Steele, 2007).

Advantages and Disadvantages

Outsourcing occurs more frequently in financial service organizations with their statements and bills. Retail for clothing and day-to-day products also outsource to lower cost of production. However, there have been trends of outsourcing in marketing collateral as well (Christy, 2008). Outsourcing has a lot of benefits as mentioned before, but there are also many risks that are associated with it too. For example, a company may lose control over their services and projects. The foreign partner with the expertise is able to better manage the company’s product or service leaving the company little or no control of the final outcome. Likewise, the company may not be at an advantage when it’s unable to transfer knowledge to the foreign outsource country (Christy, 2008).

Some companies may not benefit from outsourcing financially and as a result unmet expectation will occur. Hence, a firm that is thinking about outsourcing its goods and services to foreign countries must screen their vendors carefully (Steele, 2007). It is vital for them to know whether or not the outsourced firm dealt with the same size company prior and whether it has a good or bad reputation. It is important to visit these outsourcing partners as well to inspect the work environment. The company has to know whether or not the outsourcing partner is able to cut cost on their end as well. Their performances with other company partners within the last couple of years are also important as well. The check and verification step is very important for firms to know in order to ensure the outsourcing partner can meet most of their goals (Steele, 2007).

India—Cream of the Crop (Passage to India)

India has grown in popularity over the years among companies who are outsourcing. India accounts for a total of 10.6% of the global market outsourcing business followed by China at 3.56% and Philippines at 1% (Sanez, 2008). The country has a very diverse work pool with different talents. The workers are highly skilled in their profession and are very educated. Despite the increase in competition and salary, the country is still attracting foreign companies. Offshore outsourcing is predicted to grow throughout 2008 as companies cut down on costs and expenses. The area that is likely to increase more this year will be IT outsourcing. In sales, the new sales language is getting transformation. This means that consumers don’t just want to save money; they want to get access to information at a fast speed. The Indian rupee had a tremendous increase in 2007 compared to the U.S. dollar, which declined against other country currencies for that year. Likewise, the Indian economy is steadily growing at a rate of 9% per year. Thus, providing an attractive place for foreigners to come to and do business (Sanez, 2008).

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