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Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman
Edition 6ISBN: 978-0073523149Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman
Edition 6ISBN: 978-0073523149 Exercise 26
Discuss the pros and cons of the policy described in the following quote from Fortune :[1]
According to the new thinking, any kind of work to which a company can't bring a special set of skills should be spun off, outsourced or eliminated. Thus AT T, GE, IBM, and Shell Oil are in the process of spinning off legal, public relations, billing, payroll, and other services. What's left, whether it's a $100 million corporation or a $100 billion corporation, is the ideal size. For example, if marketing is a competitive advantage in an industry, then it should build up its marketing muscle and employ outside suppliers and service firms to do everything else.
According to the new thinking, any kind of work to which a company can't bring a special set of skills should be spun off, outsourced or eliminated. Thus AT T, GE, IBM, and Shell Oil are in the process of spinning off legal, public relations, billing, payroll, and other services. What's left, whether it's a $100 million corporation or a $100 billion corporation, is the ideal size. For example, if marketing is a competitive advantage in an industry, then it should build up its marketing muscle and employ outside suppliers and service firms to do everything else.
Explanation
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Outsourcing can be defined as the practi...
Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman
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