Management and Geography of Innovation †Free Samples to Students

Question: Discuss about the Management and Geography of Innovation. Answer: Introduction Outsourcing business process can be defined as an important strategy, where a business organisation set up official contract with third party agencies in order to carry out important operational function and responsibilities. In many cases the business organisation hires suppliers in order to get access to raw materials and other important resources. Large scale companies and multinational corporations have been using the technique of Outsourcing business process that are needed to deal with the various challenges related to operational activities. It enables the company to achieve organisational flexibility and also reduce the cost of business operation. There are several examples of multinational companies using Global talents with the help of outsourcing unit. Considering the significance of outsourcing in business operation of current days, the report aims to analyse the advantages and drawbacks of this system in the global environment. In the current era of globalisation, most of the multinational corporations preferred to work in business partnership. This can help them in the process of expanding the business. This can provide the companies access to wide range of workers having effective skills. Other hand there is various examples of large scale companies but they have suffered loss due to Outsourcing business from third party agents. Hence, it is important to analyse both the positive and negative aspects of outsourcing business in order to understand its impact in the current Global Business scenario. The current project will aim to discuss the existing literature that is related to outsourcing business unit and thereby highlighting the advantage and disadvantages associated with this process. The current project will provide literature review from the peer-reviewed journal articles that are related to the Research work of business Outsourcing process. There will be some real life examples provided that will help to highlight upon positive and negative aspects of outsourcing business process. It is essential for all business companies to have Outsourcing partner in order to deal with the challenge of resource shortage and efficiency of skilled labours. The current project will also highlight upon the importance of the most parts that are related to the outsourcing business. The limitation and the existing gap that exist within the literature will also be discussed within the current project. Advantages of outsourcing business Javalgi et al. (2011), have mentioned that with the help of Outsourcing business process it is possible to decrease the overall expenditure of the company. This is mainly due to the fact that the large-scale multinational corporations are able to hire workers from third party organisations at much lower rate. This is evident from the fact that most of the American and European in MNCs recruit workouts from the Asian countries including India Bangladesh and China, where the cost of labour is much lower. Hence it is possible for the organisation to carry out all the major operational tasks at much lower rate. It is also important to mention that extreme low cost labour rate in China have resulted in the fact that most of the electronic manufacturing join have set up their manufacturing unit in the nation (Lacity and Willcocks 2013). As the companies are able to hire candidates from foreign Nations, it is also possible for them to bring about innovation within the manufacturing and operational process. There are also no risks of violating the legal rules related to protection of intellectual properties as they inherit and apply the innovative ideas in the business process. Lacity and Willcocks (2012), have mentioned that with the help of the Outsourcing business process it is possible for the companies to provide better quality of after Sales Service. The overall Lead time of product delivery can also be decreased. The companies will be able to implement better level of value proposition that is achieved with the help of faster delivery of the service. The companies are able to implement the policy of foster innovation that is possible with the help of improved level of skill of the workers. In the current days the companies have to spend huge amount on setting up the technological infrastructure that is needed in the manufacturing unit. With the implication of outsourcing business process it is possible to lower the cost of technological infrastructure as the third party agencies are responsible for majority of the manufacturing work (Bharadwaj et al. 2010). One of the popular examples of this type of business outsourcing in the process of manufacturing is the partnership between Apple Inc. and Foxconn, who is the biggest manufacturing partner of Apple. The Foxconn is responsible for manufacturing all the major smartphones that are being sold under the brand name of Apple. With the help of this manufacturing outsourcing, Apple has able to increase up on their manufacturing units. Hence, in the present days the iPhone has a strong foothold in the smartphone market of the Asian countries. It has thereby allowed Apple to expand the market and increase the level of sale in the respective Nation. There is also the example of Samsung, which is one of the largest electronic giants of the world. Most of the Products that are sold under the brand name of Samsung have a definite period of warranty. There are various third party agents, who have set up partnership with Samsung in order to provide after sale service to all the manufacturing defects that are encountered by the customers after buying any product. The BPO units of the Samsung company has helped to provide better customer support and sales service, which is one of the major reason for high brand value and healthy reputation of Samsung. Core area focus of Business Implementation of business plan involves various secondary activities that are an essential part of the overall business operation. It is important for the company to conduct high level of marketing research and collect information that are necessary in the process of making business plan. It is important to mention that with the fast changing scenario of business environment, these essential for all business units to have the latest information of the consumer market. This can help them to maintain sustainability and have healthy competitive advantage. Carnahan and Somaya (2013), have mentioned that with the help of various marketing research firms, it is possible for large scale company to collect the necessary marketing data that are needed in making business plan. With the primary raw data available for the marketing and sales managers, it is possible for them to focus upon the core business processes that include making of the blueprint of marketing plan. It is also possible for the companies to save the time that is needed in making up the marketing plan with the help of advanced forms of marketing research. With the shortage of skilled labour and employees, one of the major challenges that are encountered by all companies is to select and recruit the perfect candidate for the job. There are cases, where companies outsource workers from consulting agencies in order to reduce the burden of the selection process (Bhm et al. 2011). It is also possible for the large scale companies to recruit workers from all parts of the globe as they outsource them from all parts of the globe. With the high demand of product and services for the large scale industries, it is essential that the business operational unit are active for 24 hours in a day. Lacity et al. (2010), have mentioned about the time zone advantage that are associated with the business operations that allows the business to operate in all time of the day according to the time zone of different parts of the globe. This is mainly possible due to the fact that the companies are able to hire workers from all parts of the globe. Hence it is possible for the customers and clients to contact to the company at any time of the day. With the advancement of globalisation in business, it is essential that all business operational process are continued for 24 hours in order to sustain maximum production. Disadvantage of outsourcing business One of the main purposes of outsourcing business unit is to reduce the overall expenditure of the company. The research paper of Nadkarni and Herrmann (2010), have highlighted the fact that there are various hidden cost that are involved due to Outsourcing business operational process. This is mainly due to the fact that large scale companies have to set up an official business contract with the third party agencies. The cost of setting up this business contract and also the legal procedures that are associated with this function is often neglected as a part of companys expenditure. There is cost of hiring Legal Experts in order to ensure that there are no unfair or unethical ways implemented in the overall outsourcing business. These costs are generally excluded from the financial reports of the company and are therefore form a major part of the companys hidden cost. As the business firms hire resources and raw materials from the outsourcing unit, in most of the occasion they have no control over the pricing that are demanded by the Outsourcing suppliers (Massini and Miozzo 2012). With variation in the pricing of raw materials needed in manufacturing process, it is not possible for the company to have a fixed price of their branded product. Moreover, there is also no fixed regulation that can control over the pricing of resources. This is one of the major drawbacks of outsourcing business as the companies could not have a fixed budget over the expenditure and earnings. Synchronization deliverable Issues It is essential for the large-scale multinational corporations to hire reliable source of third party agent in order to get the supply of resources in the form of outsourcing. According to Mani, et al. (2010), one of the significant challenge that are encountered in the context is due to the fact that in most of the occasions, it is not possible for the managers to have total control of the activities of workers of third party agents. Hence, it is not possible for the business and Outsourcing you need to have synchronisation within their activities of business operation. This can ultimately compromise upon the organisational performance and rate of production. As the large scale business company hire Outsourcing unit in order to carry out their operational activities, they have to share all the company detail company information with the third party agencies. Bustinza et al. (2010), have mentioned about the risks that are involved in the context due to the fact that there is the risk of information being leaked to public domain. As the companies lose the data within the public domain, they also have the risk of losing competitive advantage to the business rivals. There is also the risk that the information related to the financial performance of the company can be misused that can ultimately cause financial loss to the company. Conclusion In the conclusion note it can be said that the major advantages the companies enjoy in the current period due to Outsourcing business process is due to the fact that they are able to reduce the overall expenditure of business operation has the cost of labour is low. Nevertheless, there are many hidden cost that can lower the profit level of the company. Additionally, due to lack of control in pricing, it is not possible for the company to have a fixed cost of the products or services. With the help of outsourcing business it is possible to operate the business for 24 hours. Hence, with the help of the outsourcing business, it is possible to deal with the challenges that are related to the business operation. On the other hand, there is the risk of sensitive data being leaked to public domain that can compromise upon the level of business performance and also have the risk of losing competitive advantage. The current literature have the very well described the Positive and negative aspects of outsourcing business. Nevertheless, the major gaps that exist in the current literature are due to the fact that it has not able to suggest proper intervention ways to deal with the drawbacks of outsourcing business. Reference Bharadwaj, S.S., Saxena, K.B.C. and Halemane, M.D., 2010. Building a successful relationship in business process outsourcing: an exploratory study. European Journal of Information Systems, 19(2), pp.168-180. Bhm, M., Leimeister, S., Riedl, C. and Krcmar, H., 2011. Cloud ComputingOutsourcing 2.0 or a new business model for IT provisioning?. Application management, pp.31-56. Bustinza, O.F., Arias-Aranda, D. and Gutierrez-Gutierrez, L., 2010. Outsourcing, competitive capabilities and performance: an empirical study in service firms. International Journal of Production Economics, 126(2), pp.276-288. Carnahan, S. and Somaya, D., 2013. Alumni effects and relational advantage: the impact on outsourcing when a buyer hires employees from a supplier's competitors. Academy of Management Journal, 56(6), pp.1578-1600. Javalgi, R.R.G., Gross, A.C., Benoy Joseph, W. and Granot, E., 2011. Assessing competitive advantage of emerging markets in knowledge intensive business services. Journal of Business Industrial Marketing, 26(3), pp.171-180. Lacity, M. and Willcocks, L., 2012. Outsourcing business and IT services: the evidence of success, robust practices and contractual challenges. Legal Information Management, 12(1), pp.2-8. Lacity, M.C. and Willcocks, L.P., 2013. Outsourcing business processes for innovation. MIT Sloan management review, 54(3), p.63. Lacity, M.C., Khan, S., Yan, A. and Willcocks, L.P., 2010. A review of the IT outsourcing empirical literature and future research directions. Journal of Information technology, 25(4), pp.395-433. Mani, D., Barua, A. and Whinston, A., 2010. An empirical analysis of the impact of information capabilities design on business process outsourcing performance. Mis Quarterly, pp.39-62. Massini, S. and Miozzo, M., 2012. Outsourcing and offshoring of business services: challenges to theory, management and geography of innovation. Regional Studies, 46(9), pp.1219-1242. Nadkarni, S. and Herrmann, P.O.L., 2010. CEO personality, strategic flexibility, and firm performance: The case of the Indian business process outsourcing industry. Academy of Management Journal, 53(5), pp.1050-1073.