Outsourcing a Division
Assume you are a manager in a large Middle East manufacturing organization. You have been asked to consider outsourcing a division of the organization to another country.
•Describe the steps you would take in evaluating this decision.
•Explore whether or not you would use prescriptive or descriptive decision-making and explain your reasoning.
•Evaluate the critical thinking skills you believe would be necessary to make this decision.
You must demonstrate your ability to describe the steps you would take in the decision-making process rather than merely providing an answer to this scenario.
All I need is 3-4 pages, and do not forget to use and cite scholarly sources ( references).
you can use this book, Bazerman, M. H., & Moore, D. A. (2013). Judgment in Managerial Decision Making.
the answer should be in words document.
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You can use the response below to evaluate the decision related to outsourcing effectively.
Outsourcing has become a common practice in large manufacturing organizations of Middle East. In many cases, this practice helps them to ensure operational quality and minimise business cost (Schniederjans & Schniederjans, 2015). This response provides you guidelines and references for steps to evaluate decisions of outsourcing of product designing division would be explained along with evaluation of decision-making modes and required critical thinking skills.
Steps to Evaluate Outsourcing Decision
Following steps would be useful to evaluate feasibility of outsourcing decision:
1. Determine Feasibility of Outsourcing Decision: At the initial level, firm's internal and external environmental analysis will be performed to determine the importance of product designing activity for a manufacturing organization in delivering goods to the final customers. It would be effective to clearly state reasons and objectives of outsourcing division of product design. This will provide a base to access feasibility of outsourcing decision in precise manner (Laycock, 2014). In this step, potential results of avoiding outsourcing of product design work would also be determined to state benefits of outsourcing.
2. Evaluate Initial Investment: In large manufacturing firm, physical exclusion of a product design division from the unit would be difficult and complex. Outsourcing of product design division will include suppliers' assessment, selection of suppliers, formulating specification, change in organisational structure etc. These activities would consume time and require certain investment. In this step, revenue may also be generated from selling of tools and machinery of designing product that would be come in existence due to complete outsourcing of a division (Schniederjans & Schniederjans, 2015). This step would include determination of initial investment through comparing cost and revenue of infrastructure changes.
3. Determining Economic Benefits: In this step, financial benefits of product design division's outsourcing would be determined through considering hidden cost and profits. Outsourcing would be made from other country that will create several costs and issues for the firm due to difference in language, religion, values, management style, working policies ...
This response outlines the steps that need to be taken to evaluate a decision regarding outsourcing a division of the organization to another country. Also, it is discussed whether prescriptive or descriptive decision-making would be used. Finally, critical thinking skills required to evaluate this decision are analyzed.