The paper “ Long Term and Environmental Implications of Organizational Functions Outsourcing“ is an affecting variant on research proposal on management. In the last decade, the Australian market has been changing gradually. A study established that with the increasing market competition due to the favorable trading policies in the Australian market, business profits have been on the decline. In this case, a porters five forces analysis on the Australian market illustrates that increasing competition has a direct implication on the buyers and suppliers' bargaining powers. On one hand, the process increases the buyer's bargaining power in a market.
As such, Kozani (2005, p. 269) noted that a high buyer bargaining power has the direct implication of increasing product quality and production standards, against a declining price base, as the consumers have a low switching cost allowing for loyalty and brand switching in the market. On the other hand, competition reduces suppliers' bargaining power. In this case, a high number of supplies in the global market increase the consumer variety, as well as providing for surplus supply. As such, this has a direct impact on the availability of surplus market output, exceeding the demanded market output.
In this regard, multinational and domestic organizations have over the decade's developed systems and approach through which to counter this challenge through cost reductions. As Langfield-Smith, Smith, and Stringer (2000, p. 2) stated, in order to counter declining profit margins in a highly competitive market where price increment is ruled out, organizations in the Australian market seek to leverage their margins and increase them through a cost reduction approach on marketing and other functions outsourcing. In this regard, reducing operational costs, at static revenues ensures a rising profit margin to such stakeholders. One of the adopted approaches to reduce operational costs as a means of ensuring profit margins increment is the adoption of the outsourcing strategy.
In this case, organizations seek to acquire resources and functions from external industry third party contractors who are perceived as specialists in the development and production of such resources. However, this management approach has led to the emergence of a strategic management challenge on the rationality and sustainability of such an approach. In this case, arguments have been developed that although the approach could be rational in the short and medium-term periods, it is unsustainable and unprofitable in the long-run period.
As such, based on this strategic management challenge on the merits of outsourcing to an organization's success, the proposed study will evaluate the rationale and extent to which organizations in Australia can outsource resources as a means of reducing their operational and production costs. 2.0 Objectives of the StudyThe general objective for the study will be the evaluation of the rationale and viability of outsourcing as a means of reducing organizational production and operational costs as a means of increasing the gross profit margins in the highly competitive global market platform.
Moreover, the proposed study specific objectives will include: Evaluate the rationale for outsourcing in multinational organizations in Australia as a cost reduction approach Evaluate the implications of outsourcing to organizational management and the control of its value chain in the Australian market Evaluate the environmental implications of outsourcing by multinational companies in Australia Establish the challenges of outsourcing for multinational organizations in the Australian market 3.0 Research Questions
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