Chapter 18, Problem 4MBD

Explanation of Solution

Challenges of Outsourcing:

• The challenges of outsourcing includes:
  • Length of contract:
    • It becomes difficult to break contract.
    • It is difficult to forecast business requirements for several years.
  • Loss of confidentiality:
    • It may lose confidential information to wrong hands.
  • Threat to competitive advantage:
    • The trade secrets of company may get revealed.
    • The vital information regarding business operations are shared among different entities.

Cultural, language and legal issues:

• The cultural challenges includes:
  • Gender tolerance differences, religious beliefs, customs
  • Social attitudes
  • Work style difference and business relationships
  • Location and time zone dealings
  • Difference in labor cost
  • The steps to mitigate these risks include:
    • A common code of conduct should be generated while outsourcing.
    • Time zone should be framed based on client side.
    • The work style should be clearly mentioned...