Question

Certainly cost control reduces staff costs, no benefits to pay staff, speed of claims make outsourcing attractive. How might outsourcing improve member relations?

Answer 1

Outsourcing means having outside vendors supply services that were previously done by company’s own employees. Most of the organizations involve in outsourcing as a means to cost cutting. But outsourcing can also be viewed as a method for strategic alliance where an organization contracts with another organization to purchase important services. Both the members involved in the contract work with cooperation and strive to achieve the results. The members need to interact with each other and direct communication strategies would be established between the vendor and the firm to ensure cooperation and better control over the processes. When the members of two different firms directly interact with each other, the relationship between the firms improves. Outsourcing also may happen between two competing firms and when they start working together through outsourcing alliances, the relationship between the members improves. The members would work as a unit as the processes is interconnected and better relationship is developed through frequent communication between the members.