Master Thesis On Outsourcing

Master Thesis On Outsourcing-10
However, Huselid (1995) argues that outsourcing some HR functions may reduce competitive advantage.He points out that some HR functions are seen as cost centers but other may create value as part of a firm’s strategic infrastructure.They believe that outsourcing could benefit to organisations such as reducing overhead costs, gaining expertise from outside agencies, minimizing the regular workload of HR staff and improving quality and efficiency of the organisation.

However, Huselid (1995) argues that outsourcing some HR functions may reduce competitive advantage.He points out that some HR functions are seen as cost centers but other may create value as part of a firm’s strategic infrastructure.

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From a strategic perspective, recruiting and selection are important activities in the firms in order to select talents.

If outsourcing these firm-specific skills may hinder the ability of the firms to develop unique competencies within their workforce.

Because of the globalization and increasing environmental complexity, therefore, in my point of view, researchers should not confine to some regions.

Next issue to be discussed in this paper is about whether HR outsourcing is a tool for achieving competitive advantage.

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.

Indeed, these are not only the benefits to the firms.

Another benefit does not mention in the article including free sources for other purpose.

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.

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