Saturday, February 11, 2012


Kotabe, M., Mol, M., & Murray, J. (2008). Outsourcing, performance, and the role of e-commerce: A dynamic perspective. Industrial Marketing Management, 37-45. Retrieved from http://primo2.hosted.exlibrisgroup.com:1701/primo_library/libweb/action/display.do?frbrVersion=2

(I know the source above has to be indented on the bottom two lines, but I cant tab on this post for some reason.)
Summary
This article gave some arguments for and against outsourcing.  Some arguments for outsourcing were that a firm can focus on its core activities, lower production costs, and be more flexible (for example if something goes wrong then the company can easily switch suppliers, which would be a lot more expensive if happened in-house).  Some arguments against outsourcing were that if a company outsources too much, consumers might not be able to differentiate their products from competitors.  Other cons include possible lower product quality, changing exchange rates, and a high cost for coordinating all the outsourcing.  According to Rottman and Lacity, “the transaction costs for offshore projects neared 50% of contract value, compared to 5% to 10% for domestically outsourced projects” (Kotabe, Mol & Murray, 2008).  This article also included a graph of firm profitability and degree of outsourcing, concluding that there’s an optimal point of outsourcing for companies.  Information technology encourages businesses to outsource more today, but they must make sure they have the right balance of outsourcing.


Assessment 
This source will be useful to my project.  It seems to be reliable information, and the authors look credible, judging by their biographies.  This is also a peer reviewed journal as well, so I trust the information.  I found this article through the Purdue Library.


Reflection
I think I will use this source for my project for some pros and cons to outsourcing, as well as a graph on firm profitability and degree of outsourcing.  This was a helpful topic and enlightened me on a few new pros and cons.

1 comment:

  1. Hi, Kelly. The prompt just asked for the summary, not the full annotated bib, but this saves you work later on. Your summary is done really well, and don't worry about not indenting the bottom two lines of the citation. The Google tools we use make it really difficult to do that. You've completed this portion of the writing journal.

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