Abstract
It is believed that world outsourcing will increase by 8.1% this year. However, Organizations that engage in outsourcing activities tend to ignore the negative effects of outsourcing. This paper is a literature review, focusing more on the negative effects of outsourcing The method of research is based on library books, journals databases and web based research. There are three main arguments discussed in this paper relating to the negative impacts of outsourcing. They are to leakage of information, rise in hidden costs and losing management control.
1.0 Introduction
A fundamental shift is occurring in the business world. In modern business environment outsourcing has become very popular. Heywood (2001) defined outsourcing as “the transferring of an internal business function or functions, plus any associated assets, to an external supplier or service provider who offers a defined service for a specified period of time at an agreed but probably qualified price.” Furthermore (Elbo, 2007) portrayed outsourcing as a “tourist who wants to visit a particular attraction, the tourist has the option of driving his own car with his family or choose to hire a public transport service to bring them to their destination.” Outsourcing has become an important part of the business world. Business process outsourcing such as information technology to third party is carried out every where in today’s world.
Johnson, (1997) express the motive behind outsourcing is to improve ‘company focus’ as this lets the company to focus on wider business issues while the outside expert takes care of the operational management . He further highlights that this is a management tool which helps the company to become more efficient in terms ...