Business Practices

Business Practices



Business Practices

Introduction

Researchers are increasingly considering the practice of outsourcing of value activities to specialist firms. Analyses focused on whether and when outsourcing is an effective practice, particularly in terms of cost reduction. The researchers also studied the impact of outsourcing on domestic economies and international trade. Much less research has examined the management of outsourcing relationships and how outsourcing partners can learn from each other. This study examines the conditions and dynamics by which the outsourcing partners work with each other to help them learn and develop their business. It relies on theories and recent research on the relations of cooperation and competition in organizations. To develop a new model especially suitable for outsourcing partnerships. In particular, he suggested that when outsourcing partners believe their goals are positively linked so that they help each other succeed, rather than being competitive, win-lose or independent goals, they learn from each other by sharing effective business practices and discussions, in turn, improve business results (Barney, 2001, 41-56).

Challenges to share effective practices

Enterprises that participated in this study may have significant pressure to learn and grow, as they must now compete in a dynamic market with many new domestic and foreign competitors after decades in a subsidized market dominated by the state. However, the need and opportunity to learn from each other does not mean that organizations truly take advantage of these opportunities. Indeed, the emphasis in the literature was placed on the transaction costs that make it difficult to collaborate with other organizations (Burpitt and Bigoness, 2007, 414-423). These costs can easily outweigh the benefits of close collaboration. In addition, organizations have been described as selfish if they have difficulty relying on each other. Specifically, they fear that other organizations pursue their own interests with guile and engage in opportunism. Opportunism is defined as "interest seeking with guile, and includes not only the observable behaviours such as lying, theft and fraud, but also refers to the provision of incomplete or distorted information in order be misleading, confusing, or other blind people for his own account (Doh, 2005, 695-704). Activities such as taking shortcuts, masking poor job, breaking promises, and be dishonest to take advantage are examples of opportunistic behaviour.

CONCEPT OF VALUE ADDED

The concept of value added is at the origin of economic schools. Adam Smith (1723-1790) stated that individuals who regularly provide materials to industry do to get some profit from the sale or what their work adds value to the materials themselves. Value Theory and the Theory of Product Distribution Surplus made by David Ricardo (1772-1823) argue that the wealth of a nation product of social work tends to be distributed among different social sectors, calling this social product to distribute the economic surplus. It is reformulated the theory of courage to propose the concept of surplus value as the holder of the capital goods detracts from the social production of wealth.

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