Thursday, March 6, 2014

To Outsource is to Survive

     Outsourcing is an action which has been used for longer than many would care to think about, but has recently taken on a negative connotation.  The word "outsource" is commonly used these days as an attack on a business or company while, in reality, it actually is not too bad.  Outsourcing, whether overseas or to that guy down the street, is a critical part of maintaining a healthy business.  This applies to all businesses, big or small, whatever their field.  To outsource, as the wonderful Merriam-Webster will attest to, is "to procure (as some goods or services needed by a business organization) under contract with an outside supplier."  This is exactly the idea that Adam Smith was trying to explain in "Concerning the Division of Labor."  Smith explained: "In a tribe of hunters or shepherds a particular person makes bows and arrows, for example, with more readiness and dexterity than any other.  He frequently exchanges them for cattle or for venison with his companions, and he finds at last that he can in this manner get more cattle and venison than if he himself went to the field to catch them."  This bow maker is outsourcing the hunting and breeding of beasts to those who are talented and playing to his strengths so that he can thrive.  To stay in business, a company must play to its strengths, and it must outsource its weaknesses.  If the head of a small accounting business has a background in accounting (which he should, obviously), it makes sense for him to keep track of his business' own money and expenses.  However, it is unlikely that this accountant has any experience with web design or advertising, both of which are rather necessary for a small business to succeed in modern times.  So, to save time and money, and to increase his chances of success, this accountant will keep his books, manage his clients, and he will hire a coding team form India and a local advertising company.  He simply cannot do these things on his own, so he must outsource for his business to be a success.


NOTE: I understand that this may not answer the prompt effectively, but I found it to be a very interesting argument, so I went with it.  I can do more if you would like. Please let me know what you think.

1 comment:

  1. I love how you effectively tied your thoughts back to Adam Smith's essay! Very nice writing and support for your ideas from Smith. We're moving on to fiction now, so I think it is not a good use of your time to spend additional time on this. If you ever want to think more deeply on this topic, there are several great sources that will both support and challenge your ideas. You can find them easily if you Google "cost of outsourcing".

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