The Role of Strategic Outsourcing in Global Business

The Role of Strategic Outsourcing in Global Business

Kijpokin Kasemsap (Suan Sunandha Rajabhat University, Thailand)
DOI: 10.4018/978-1-5225-0130-5.ch016
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Abstract

This chapter reveals the role of strategic outsourcing in global business, thus describing the theoretical and practical concept of strategic outsourcing; the management theories related to strategic outsourcing; the applications of Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO); and the significance of strategic outsourcing in global business. The fulfillment of strategic outsourcing is vital for modern organizations that seek to serve suppliers and customers, improve business performance, enhance competitiveness, and reach continuous achievement in global business. Therefore, it is necessary for modern organizations to explore their strategic outsourcing, establish a strategic plan to usually check their practical advancements, and immediately respond to strategic outsourcing needs of customers in modern organizations. The chapter argues that applying strategic outsourcing in global business has the potential to increase organizational performance and attain business goals in the digital age.
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Role Of Strategic Outsourcing In Global Business

This section describes the theoretical and practical concept of strategic outsourcing; the management theories related to strategic outsourcing (in terms of resource-based view, resource-advantage theory, transaction cost theory, the capability approach, knowledge-based theory, agency theory, and social exchange theory); the applications of BPO and ITO; and the significance of strategic outsourcing in global business.

Key Terms in this Chapter

Horizontal Integration: The merger of companies at the same stage of production in the same or different industries.

Outsourcing: The contracting or subcontracting of non-core activities to free up cash, personnel, time, and facilities for activities in which a company holds competitive advantage.

Offshoring: The moving of various operations of a company to another country for reasons such as lower labor costs and more favorable economic conditions in that other country.

Information Technology Outsourcing: The transferring of information technology-related business functions from internal staff to outside contractors.

Offshore Outsourcing: The work done for a company by people in another country that it typically done at a much cheaper cost.

Resource-based view: A way of viewing the company toward approaching strategy.

Vertical Integration: The merger of companies at different stages of production in the same industry.

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