Thesis On Outsourcing

Thesis On Outsourcing-17
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In today global business environment, firms are facing the increasing of the competitiveness, new technology and corporate restructuring, such factors force firms to seek and sustain competitive advantages by emphasizing on profitability and productivity of each department.

For this reason, today some firms embrace outsourcing concept through outsourcing all or part of HR functions could reduce cost and increase the effectiveness of HR department.

A study conducted by Klass (1999) uses transaction-cost economies theory to explain the outsourcing benefits received by the firms and its transaction cost is varying to different organisations.

The study indicates that transaction costs could be increased by opportunistic behavior by service providers to which the firm has grown dependent.

Therefore, it was found that arguments are raised in many strategic HR literatures.

In this paper, we will examine a prescriptive article “Beyond Benefits: The Changing Face of HR Outsourcing” and discuss different perspectives on the related issues which are provided by other authors in other SHRM literatures.For example, outsourcing permits the firms to redirect their resources from non-core activities towards other activities then results in focusing on customers’ needs and to provide better customer service.Moreover, if part of HR function, like routine administrative, is being outsourced, the resources of HR could be used on the role of change agent and strategic business partner in the organisations.In the article, the authors mention there are three benefits of outsourcing that also are reasons for the firms to outsource their HR functions.These benefits include enhanced value of the firms, increase speed to change and reduced costs.uses cookies to personalize content, tailor ads and improve the user experience. By using our site, you agree to our collection of information through the use of cookies. As the authors state, firms can gain competitive advantage through outsourcing which could provide better, faster and cheaper the best-in-world HR services (Jeffay, Bohannon and Laspisa 1997, p.42).Switser (1997) also has similar point of view, he pointed out that outsourcing the transaction-based HR activates can free HR managers and other managers to struggle with strategic business issues (Switser 1997).Many surveys and academic researches were conducted in the past decade and shows that the use of HR outsourcing is growing and continuing to increase.More firms have started to outsource their HR functions for a variety of reasons.


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