Outsourcing And Success In General Motors Essay

Published: 2020-02-08 04:12:33
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Category: Outsourcing

Type of paper: Essay

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1.0 Executive Summary

Todays business environment is very volatile in nature. This has made many businesses to encounter many business risks that are quite complex in nature. The business risks come in many ways. They include business ethics, investor demands, corporate governance, competitive market pressures, regulatory compliance, changing technology and accountability. All these challenges can easily be solved by outsourcing. This paper is dealing with outsourcing and how it has affected the general success of General Motors Company.

2.0 Introduction

General Motors Corporation was founded in the year 1908 in Michigan. It is also commonly known as GM. This is an American multinational corporation. It is known to be the worlds largest company that deals with auto products considering its production volume in the year 2006. This company is the second largest after Toyota Motor Company according to the production volume as per the first half of the year 2007. It basically manufactures trucks and cars in approximately thirty three nations. This paper is dealing with how outsourcing affects the effectiveness or the success of General Motors Company. (Barabba, 2004)

Outsourcing has become a strategic imperative in the business sector since the nineteenth century. This is actually an objective, consulting and independent venture that plays a big role in improving operations in organizations. It involves disciplined and systematic approach that enhances effectiveness in control, governance procedures and also risk management. (Barabba, 2004)  It is a dynamic venture that adds value in many organizations. Many businesses carry out outsourcing in various departments either partially or on full basis. Research shows that outsourcing in General Motors Company is carried out extensively and this has affected the overall success of this Company. Outsourcing has affected the overall success in General Motors Company in the following ways;

3.0 Time saving

Looking at the operations in General Motors Company, outsourcing has been extensively used in various departments and especially the technology sector. Outsourcing has really played a big part in the overall success of General Motors Company. According to the company CEO Mr. Rick Wagoner; outsourcing has really helped this organization to save lot of time. It is well known that the automobile industry is quite dynamic and very challenging in nature. (Barabba, 2004)

Customers always look out for new products that are convenient and compliant to fast moving technology. General Motors Company CEO says that it would be very difficult and actually it would take quite some time if employees were to be frequently trained so that they are knowledgeable or compliant with fast moving technology. When this organization therefore carries out outsourcing it actually saves a lot of time as a resource that would have been used training employees.   This venture has helped the management therein to use this time on concentrating on other departments in the company like marketing and this has really played a big role in making this company successful and enviable. (Leslie, 1983)

4.0 Customer satisfaction

Outsourcing has greatly influenced the success of General Motors Company through affecting the customer satisfaction on the products that are manufactured by this Company. Research on this world wide known automobile manufacturing Company shows that, outsourcing has influenced the increase in customer satisfaction in the products and brands of this company. These products include; Chevrolet, Hummer, Saab, Cadillac, Saturn and Vauxhall. After incorporating outsourcing services in many departments in the organization, many customers acknowledged their satisfaction in the products manufactured therein.

This is because outsourcing makes the organization to be quite pragmatic in nature. There is the incorporation of the business driven approach and viewing customers as the boss. Outsourcing has played a big role also in the customer care department in General Motors. Customer care representatives have learnt through external experts on how to deal with different personalities of customers. This makes customers to feel important and also satisfied with the services provided in General motors. Through this, outsourcing has made to be a very successful Company. (Leslie, 1983)

5.0 Saves costs

General Motors chairman Mr. Richard Wagoner asserts that outsourcing in this Company has played a big role in the success being enjoyed today. Outsourcing of external experts has become very popular in this organization. General Motors Company has really benefited from the outsourcing strategies in line with technology and internal auditing. This has made this Company successful as it has enabled it to save costs. Research shows that it is far much cheaper for this organization to carry out outsourcing than if it were to do train experts to carry out all the responsibilities therein. This is because the operational costs are highly minimized in this case especially when the staffs in an organization are not highly qualified in various fields. (Maxton, 2004)

General Motors Company success has been influenced by obtaining access to broad expertise that it would be expensive to maintain within the organization. Costs are reduced by overlapping technical effort and positions within the organization. This is implemented by replacing fixed cost with employees that are variable cost effective. This also gives firms the ability to balance workloads. Through this, General Motors Company has soared easily to the heights of enviable success.

6.0 Reduction in technical staff

Outsourcing in General Motors Company has influenced success through the reduction of technical staff. If at all no outsourcing was carried out then it would mean that General Motors Company would have to maintain a big number of technical staff and this would be very expensive for this Company Outsourcing really helps in the reduction of staff in many organizations. Research shows that if such organizations would manage an internal professional staff to handle internal auditing then it could be very expensive. Many organizations through outsourcing have managed to reduce the professional staff by half. This means that less money is used in the payment of staffs. Therefore through this venture, General Motors Company has managed to be successful in this challenging automobile industry. (Gustin, 1973)

7.0 Increase in effectiveness

Effectiveness in the operation in General motors Company has been brought about by outsourcing in various departments including internal auditing. Outsourcing has got very big impacts to the entire business. There is increased effectiveness in even the delivery of the services. This is because external experts have adequate experience to analyze the business operations. They also give invaluable advice to management in organizations on how to run the business.  This actually leads to effectiveness in the business operations. As internal staffs in General Motors Company interact with external professional they gain skills which in turn lead to increased business effectiveness. The increase in effectiveness in operations in General Motors Company has steered its success as customers opt for its products compared to this companys competitors.

Relocation of resources. (Gustin, 1973)

Outsourcing in General Motors Company has played a big role in relocation of resources therein. Time as a resource is always relocated to other important sectors in the General Motors Company by the managers. For instance the managers in this Company are able to use time saved in outsourcing to carry out strategic planning in the organization. This time is used to critically analyze the operations in the organization. Money as a resource that would be used to train employees in fast moving technology is also relocated. Money is relocated to other ventures like marketing and research. Through this, outsourcing has made General Motors Company successful. (Maxton, 2004)

8.0 Conclusion

Since the nineteenth century, outsourcing has become a strategic imperative in the business sector. This is normally carried out partially or sometimes full time outsourcing is carried out. Outsourcing is extensively carried out in General Motors Company. This has influenced the success in General Motors Company through Saving time and money as resources. These resources are then relocated to other developmental ventures. For instance the managers in this General Motors Company are able to use time saved in outsourcing to carry out strategic planning in the organization. This has influenced the success in this company.

Through outsourcing in General Motors Company, customers have become more satisfied with quality products therein. They include the following brands; Chevrolet, Hummer, Saab, Cadillac, Saturn and Vauxhall. Outsourcing has helped General Motors Company to strategize and improve its competitive advantage in the automobile industry. Management team in organizations need to plan and implement outsourcing as research shows that it plays a big role in influencing the overall success in a business.

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