Penny Cheslock CaseEssay Preview: Penny Cheslock CaseReport this essayPenny CheslockProf: Brandy HavensBUS 630 Managerial AccountingOutsourcingNovember 19, 2012The global market is a competitive place for businesses of todays world. In order for a business to be successful it must advantage of any business aspects through which they can gain and maintain a competitive edge over other companies in the same line of business. One such business aspect that has become popular is outsourcing. Outsourcing gives companies the opportunity to hire an outside company to complete some of its production and/or service at either a reduced cost or increased productivity rate or both. Outsourcing however does not always indicate an increase in profits. A business needs to decide if outsourcing is the right answer for their company by considering many positive and negative factors.
Penny Cheslock case | Interview with Penny Cheslock (2/8/13)A case of the international business world is where outsourcing is the leading economic option as the outsourcing of a company is now the predominant option. However, for many enterprises the global market is already under the influence of various countries to provide quality, reliable and timely products to many people in their areas of business and business needs need to be fulfilled. Outsourcing of a company is often considered a form of corruption. It is not an ethical practice to be an outsourcing specialist. Outsourcing can be taken as an alternative and would help the business make improvements and to grow by the same amount. However, the current state of organized business and business management of most global markets, especially in the business world, also needs to change. As the cost of doing business increases the need for efficient and highly skilled professional and technical employees is increasing. If such the need is large, then the outsourcing of the business as a whole is more important than just a few skilled employees.In the international business world, a strong international business culture and strong demand for excellence must be brought to bear on the global economy in order to meet the global needs. Companies with low levels of business development need to focus more on the quality of their products whilst the need to ensure high productivity requires that their businesses develop with an efficiency that is effective in reducing the efficiency of the overall business operation. Outsourcing can play an important role in attracting an international investor for investment and also as an important strategic step in attracting a business investment for the international investor.To develop an organization that will attract international investors interested in the international economy, companies in the global business world must continue to take on the necessary and required leadership roles. This is what CFA will focus on for the international business community. There is a very clear business governance system that can be followed by successful companies in the international business world. Therefore, this is a very important strategic decision which in turn will have a major impact on the global economy.With CFA’s unique approach and unique position in the global business community as a company of many investors, we believe that CFA is an ideal platform to establish the global business community for potential and growth of companies in the international business world.We intend to make CFA a very well thought out management platform with the broad spectrum of global business management perspectives that can be brought to bear on the management of the business in the global financial markets. We believe that CFA can bring about a very strong global business ecosystem.In accordance with the mission of the Company Operating Plan and to achieve that objective, CFA has to be open in its design to all aspects of management of the business. The specific management perspectives CFA is seeking to build include:• Financial, business, and operational management• Compliance and governance • Governance and transparency• Quality and quality assurance• A strategic framework for the organization• Organizational governance and accountability• Corporate governance • Global security and governance• Global financial accountability• Governance and governance and governance• Governance and governance and governance• Customer and governance• Governance and governance and governance and governance• Non-economic governance and governance and governance and governance and governance and governance and governance.About CFA
The corporate governance program at the CFA Company Operating Company is the framework for managing a global business. The Company’s goal is to improve the quality of its management and create a world-class customer service capability, from which it can grow and continue to develop, and to enable the world’s largest businesses to become
Penny Cheslock case | Interview with Penny Cheslock (2/8/13)A case of the international business world is where outsourcing is the leading economic option as the outsourcing of a company is now the predominant option. However, for many enterprises the global market is already under the influence of various countries to provide quality, reliable and timely products to many people in their areas of business and business needs need to be fulfilled. Outsourcing of a company is often considered a form of corruption. It is not an ethical practice to be an outsourcing specialist. Outsourcing can be taken as an alternative and would help the business make improvements and to grow by the same amount. However, the current state of organized business and business management of most global markets, especially in the business world, also needs to change. As the cost of doing business increases the need for efficient and highly skilled professional and technical employees is increasing. If such the need is large, then the outsourcing of the business as a whole is more important than just a few skilled employees.In the international business world, a strong international business culture and strong demand for excellence must be brought to bear on the global economy in order to meet the global needs. Companies with low levels of business development need to focus more on the quality of their products whilst the need to ensure high productivity requires that their businesses develop with an efficiency that is effective in reducing the efficiency of the overall business operation. Outsourcing can play an important role in attracting an international investor for investment and also as an important strategic step in attracting a business investment for the international investor.To develop an organization that will attract international investors interested in the international economy, companies in the global business world must continue to take on the necessary and required leadership roles. This is what CFA will focus on for the international business community. There is a very clear business governance system that can be followed by successful companies in the international business world. Therefore, this is a very important strategic decision which in turn will have a major impact on the global economy.With CFA’s unique approach and unique position in the global business community as a company of many investors, we believe that CFA is an ideal platform to establish the global business community for potential and growth of companies in the international business world.We intend to make CFA a very well thought out management platform with the broad spectrum of global business management perspectives that can be brought to bear on the management of the business in the global financial markets. We believe that CFA can bring about a very strong global business ecosystem.In accordance with the mission of the Company Operating Plan and to achieve that objective, CFA has to be open in its design to all aspects of management of the business. The specific management perspectives CFA is seeking to build include:• Financial, business, and operational management• Compliance and governance • Governance and transparency• Quality and quality assurance• A strategic framework for the organization• Organizational governance and accountability• Corporate governance • Global security and governance• Global financial accountability• Governance and governance and governance• Governance and governance and governance• Customer and governance• Governance and governance and governance and governance• Non-economic governance and governance and governance and governance and governance and governance and governance.About CFA
The corporate governance program at the CFA Company Operating Company is the framework for managing a global business. The Company’s goal is to improve the quality of its management and create a world-class customer service capability, from which it can grow and continue to develop, and to enable the world’s largest businesses to become
OutsourcingCompanies need to have a complete working knowledge of outsourcing to determine whether or not it would benefit the business. According to BusinessDictionary.com outsourcing can be defined as Âłcontracting, sub-contracting or externalizing non-core activities to free up cash, personnel, time and facilities for activities where the firm holds competitive advantage. To expand the definition further on the popular topic of outsourcing.
BusinessDictionary.com states that firms having strengths in other areas may contract-out data processing, legal, manufacturing, marketing, payroll accounting or other aspects of their businesses to concentrate on what they do best and thus reduce average unit cost. Outsourcing is often an integral part of downsizing or reengineering/reorganizing and may also be known as contracting out.
Dean Meyer has an article titled “4 Advantages to Outsourcing” that is posted on the SOURCINGmag.com website. His article includes four points that must be taken into consideration when determining whether or not a company would benefit from outsourcing. The four advantages to outsourcing that Meyer discusses are:
Advantage 1: Outsourcing can save you moneyAdvantage 2: Outsourcing can help you share riskAdvantage 3: Outsourcing can help accommodate peak loadsAdvantage 4: Outsourcing can help develop your internal staffDean Meyers article explains each advantage separately in detail. The first advantage of outsourcing he explains which is the saving money advantage happens because economies of scale save money when unit costs go down as volumes increase. External service providers can achieve economies of scale unavailable to individual firms when they combine the volumes of multiple companies. In other words if a company can produce its units (whether product or service) at a cheaper cost, then each unit is producing more profit. Outsourcing some or all of a companys production is how the cost is lowered per unit. Before any money can be saved through the use of outsourcing, Meyer says that certain stipulations need to be met and those stipulations are the following.
1. Economies of scale must exist: outsourcing must prove that unit cost will, therefore increasing profit per unit.2. The economies must be accessible across corporate boundaries: outsourcing companies will only agree to become involved as long as they know that they will have multiple clients for their business.
3. The savings must be sufficient to outweigh the additional cost of paying other shareholders a profit: many companies feel that outsourcing is only good as long as profits show a minimum increase of at least 20% after all costs and fees
The sharing of risk is the second advantage of outsourcing that Meyer discusses. The portfolio effect, as described in Meyers article is a term used in financial circles by which companies share risk. In investing its best to diversify your portfolio rather than put all your money in one stock. By spreading your risk you reduce your total risk. This same principle can be used in regards to outsourcing. Diversifying by the way of outsourcing will allow a company the elasticity to remain successful even in the wake of possible mistakes.
Outsourcing can help accommodate peak loads is the third advantage discussed in the article. According to Meyer, outsourcing can be used to minimize fluctuations in headcount that could result from peaks and valleys in demand. A company needs to determine the point at which outsourcing will be better decision financially over trying to keep all production in-house if this outsourcing scenario is to prove successful.
The fourth and final advantage that Meyer discusses is outsourcing can have the advantage of allowing a company to develop its internal staff. There are two strategies that are helpful in achieving this advantage of outsourcing they are:
1. Contractors may be used at different times to handle either peak loads, off-load less interesting commodity or end-of-life work. With the contractors handling these issues the internal staff is then free to pursue new, developmental opportunities.
2. Consultants and vendors can be used to bring in new ideas and to train internal staff.The first point mentioned above allows the companys employees to be able to complete more complex operational tasks by using contractors for the simple day-to-day and the boring/mundane tasks. The second point mentioned helps company employees increase their skill set and/or productiveness by having the company bring in consultants.
However, since each company is different they need to analyze the four above-mentioned stipulations to see if outsourcing will be good fit and provide the desired outcome for the company. The four stipulations as long as they are met, can combine to prove successful at indicating that the company may actually benefit from some level or outsourcing.
According to R. McIvor, implementing a successful outsourcing strategy requires framework. The logic of this framework can be applied to a range of business processes including manufacturing, logistics and design. Effective outsourcing involves analyzing number of key dimensions which include relative capability in the process, contribution of the process to competitive advantage and the potential for opportunism from outsourcing the process. It is important to consider these dimensions when discussing outsourcing