Carnival Cruises

9 Pages 2209 Words

f management and where control is sought through ownership. In such organisations, Research and Development are done in-house, production occurs in company-owned plants, and sales and distribution are performed by the company’s own employees. To support all this, management has to employ extra personal including accountants, human resources specialist and supply chain management specialists. However, nowadays successful organisations outsource many of these functions and concentrate on what it do best.

Outsourcing can help organisations to reduce the impact of change in the environment by outsourcing some functions to specialist companies on that function who have more expertise and focus to concentrate on managing change. So, outsourcing could consider as a strategy to manage change in the external environment.

Globalisation is another aspect which has impact upon increasing outsourcing. Nowadays, many companies are turning their attention to foreign markets, the number of global companies are accelerating. But these companies do not have in-house expertise to negotiate or operate the supply chain process in international markets. So, they need to outsource their supply chain to logistic companies which have international expertise in the distribution function. The another reason for increasing outsourcing is the increasing complexity of distribution networks. Storing and moving goods have become more complex as the technology is advancing too fast. A manufacturing organisation normally do not want to waste its management resources to this functions. Therefore, they prefer to outsource this function to logistics companies which possess all the necessary skills and technology in this service.

For example, Marks and Spencer, one of the world’s leading retailers has outsource its distribution function to Exel , one of the leading companies in supplying logistic service. M&S has approached Exel to take control of its complex...