Decision making for business Essay Example | Topics and Well Written Essays - 2750 words

Decision making for business - Essay Example These activities are equally impossible to achieve in-house and therefore the outsourcing proposal would be very efficient in consideration of this argument. In this company, anything that is not buying and selling is a potential candidate for outsourcing. The intended services to be outsourced include distribution, quality control, packaging, design, security and cleaning activities. Fleet also wants to abolish its information technology (IT) department and outsource the services for the same. The question which then arises is whether the outsourced activities would result in significant improvements for the company or not. If outsourcing is to be carried out, it should be to enhance the profitability of Fleet Ltd so as for it to make the same gains that it used to make in 1980s and 1990s or even much better. Any likelihood of the occurrence of a loss as a result of outsourcing should render the whole idea obsolete and other options put into considerations in order to avoid the financial crisis awaiting Fleet Ltd. Outsourcing of distribution would reflect in the reduction of the size of the distribution staff from 250 to 3. The financial effect of this is that Fleet Ltd will reduce the amount of money that it uses to pay the current distribution staff. This means that there will be enough money available after the retrenchment of the 247 employees. This money can be channeled towards investment for the company, something that will definitely result in profits for the company. The outsourcing of distribution will therefore give Fleet Ltd a financial gain rather than a financial loss. On this understanding, it is clear that outsourcing of distribution is an effective idea and it is for the profitability advantage of Fleet Ltd. However, the non-financial impact will be the creation of job insecurity for the distribution staff that is likely to be retrenched. Fleet Ltd intends to outsource its IT needs