Organizational Behavioral Challenges (Paperback) | Released: 09 Apr 2021

How can global outsourcing source strategy to bring a value supply chain advantages to organizations?What is global outsourcing source strategy in a departmental role? In a highly competitive global environment, many manufacturers are responded by setting and outsourcing relations for components and finished products with lower cost producers on a contractual electronic commerce department, ( original equipment manufacturer basis). Outsourcing strategy is part of the value supply chain of corporate activated. Nowadays, global outsourcing increases organizational and technological capacity of firms and cooperating a network of remotely located external suppliers performing. These understanding the important roles that product designers, engineers and production managers and purchasing manager etc. play in global sourcing strategy empowerment. Specially, electronic commerce is popular to supply chain. For example, Toyota car manufacturing company, owns unique capabilities by designing and manufacturing certain car components in-house, i.e. insourcing. Toyota also outsource manufacturing activities, Toyota adopts purchasing necessary, but no strategic inputs from independent component suppliers on obtaining a lower cost for these inputs. For example, products would be belts, tires and batteries to vehicle products that are not customized and do not differentiate its products from its competitors. Toyota's outsourcing strategy is car strategic inputs provide differentiation, e.g. engine, transmission etc. are sources from suppliers based on strategic partnership to gain to access to suppliers' capabilities and it is also a conceptualize global outsourcing sourcing strategy to Toyota car manufacturing company. How value chain outsourcing affects firm level performance. Global outsourcing strategy means to identify which production units that will serve which particular markets and how components will be supplied for production and thus included a number of basic choices, companies can make in decision how to serve various markets. Either choice relates to the use of inputs, assembly or production within the country to serve a foreign market or decides to use of internal or external supplies of components or finished products. In this outsourcing source input situation, the term sourcing is needed to describe how multi-national companies mange in of components and finished products in serving foreign and domestic markets. Sourcing decision making is both contractual point of view, the sourcing of major components and products are occurred by multi-national companies. First is from parents or their foreign subsidiaries. Second is from independent suppliers on a contractual basis. The first type of sourcing is known as insourcing. Otherwise, the second type of sourcing is referred to outsourcing. How to achieve economies of scale by outsourcing or insourcing sourcing input strategy? Therefore, the two outsourcing strategies are multi-faceted and require careful examination.The two economists ( Abrahamson & Rosenkopf, 1993) indicated that In long term, outsourcing can help to reduce fixed investment in finance view point, in-house manufacturing facilities and thus lower the breakeven point, which subsequently helps boost an outsourcing company whose return on equity (ROE). Thus, if any one corporate performance is evaluated on the basis of its contribution to the company's ROE. Also, in the short term or long term on resource inputs outsourcing view, early adopters of outsourcing strategy indeed experienced efficiency gains as they were able to reduce fixed investment in in-house manufacturing facilities and lows their ROE. But, later adopters may have different to gain institutions legitimacy or because of competition pressures in the industry, despite some inherent uncertainties about the long term costs and benefits of outsourcing strategy.