CMSE11089 Organisational Behaviour

Introduction 

The concept of outsourcing business can be defined as the process of using third party service providers so that it can handle certain type of business functions. At a particular time, the outsourcing services were imperfect for large multinational organisations (Bilan et al, 2017). The aim of the paper is to analyse and evaluate the case study Precision Electronic and describe the issues it requires to be addressed so that the business can remain viable. In the discussion section of the paper the step-by-step approach will assist the business to identify the right approach of outsourcing of different parts of the business. However, in the next section different questions will be stated highlighting the importance of invitation to tender document and explaining why it is relatable with the case study scenario (Krstić and Kahrović 2015). The analysis of current business management will be recommended stating different business model which will enable Precision Electronics to bring in a change within the business.

Description of key issues faced in Precision Electronic 

From the case study it can be analysed that Precision Electronic is a family-oriented business which is performed and operated by all four family members. The responsibilities that are conducted by the business are manufacturing and refurbishment of electronic component, commercial department that looks after the ensuring the purchase is undertaken maximising quality and minimizing price paid, financial sales and marketing (Johnson and Pike 2018). The business usually focus on manufacturing new electronic components and the repair side is a seen as a minor sideshow to their main business. The main issues of the busines can be classified follows:

• However, it is anxious about the demand for new electronic components will fall and there will be a significant shift to the use of refurbished components.
• The main issue was their technicians skilled in repairing mechanisms which is a rather dissimilar skill set to that compulsory in making new workings.
• The majority of client inquiries and component requests come in via phone or email to front office admin workers, who then assign the requests to sales personnel.
• Salespeople now negotiate pricing with clients, which is where they derive the majority of their job pleasure and commission, by negotiating the best possible price for their components, which are then sold to customers at a significant profit.
• Its back-office administrative personnel are in charge of issuing invoices, processing payments, dispatching orders, and generating management reports and at some point, it had failed to keep up with the finances of the company (Pogorelova et al, 2016).
• The problem is that none of the back-office admin workers has any of the necessary abilities to deal with financial matters.
• There are no automated systems for analysing sales of various types of components or displaying supplier performance, for example.
• This makes forecasting difficult because sales patterns are not caught up fast. As a result, the company's regulation and supervision is unable to adapt to demand fluctuations.
• The company have tried to report this by possession of the stock in their individual supplies but this has not showed cost effective as some substances have not removed whilst clienteles have requested items not in standard.  Renting the interplanetary for these provisions is also an important upstairs.
• Back-office admin lacked skills for dealing the finances.

Step by step approach to the Outsourcing of different parts of the business 

The part of the business that will be outsourced is the sales and marketing team. While many people associate outsourcing with Precious Electronics, outsourcing sales can benefit all types of organisations. Outsourcing has a number of advantages, including cost savings, increased efficiency, and reduced staff. Outsourcing sales allows to work with an existing sales staff while avoiding the difficulties of hiring, educating and managing their own sales force. Working with an outsourced sales firm help Precious Electronic to invest and plan for the future by assessing which sales responsibilities will benefit the company and developing a plan to ensure that members of the team with those essential skill sets are present.

With reference to the step-by-step approach of outsourcing, Precision Electronics should adopt the following outsourcing process and it can be explained as follows:

Step 1: Determination of what to outsource: Sales and Marketing Department

Precision company should have a clear strategic plan for outsourcing any service or operation before moving forward. Cost reductions, increased efficiency, quality service gains and the introduction of appropriate capabilities are all viable causes (Agrawal, Singh and Murtaza 2016). Another benefit of clearly establishing outsourcing goals is the ability to assess a company's true outsourcing requirement. Examine the activities of marketing and delivering of goods can be identified as their benefits and disadvantages. The electronic component that will be outsourced are inductor components, transistor, integrated circuits, capacitor component, resistor component, LCD, electrochemical components, active components like AC circuits, passive components and many others. It will be outsourced because it assists to saving money is the most compelling argument for a corporation to outsource. A corporation may desire to cut operating costs for a variety of reasons. There could be a difficulty with a supplier or a material cost increase, and the company wants to cut costs in order to remain competitive with its products.

Step 2: Requirement of a team in Sales and Marketing Department

Teamwork is vital to the success of any company. To have a meaningful and long-lasting profession where Precision must be able to collaborate effectively with other department, which is why collaboration is so vital in the workplace. Collaboration within the accounting and operations team can aid in the solving of challenging issues. However, brainstorming is an essential instrument for the company to discuss knowledge and come up with creative solutions.

Step 3: Formulation of a plan in Sales and Marketing Department

Precision should state that clearly and outlines it outsource goals is already ahead of the competition. This is because they have taken the information to comprehend the benefits and drawbacks of outsourcing, corporations that carefully highlight their outsourcing strategic goals, point by point, will be in a good situation to choose the right flexible engagement model for their industry than firms that charge less attention to these strides (Schniederjans, Schniederjans and Schniederjans 2015). By establishing possibly, the best outsources goals early on, a corporation may make the best use of IT staffing, potentially boosting performance while keeping costs down by scaling up or down supplementary workers when business and financial constraints arise.

Step 4: Determining to retain the outsourcing consultant in Sales and Marketing Department

The business firm should not have a for that of the services or processes they want to outsource can benefited from the advice of an outside consultancy. Explicit instruction can be evaluated and reinterpreted as enormous potential service contracts for the chosen outsourcing provider with the support of a specialist (Guarnieri et al, 2015). The consultants may also be included in selecting the contractor and drafting the outsourcing agreement, but make absolutely sure the consultant's position is properly delineated at the end of the project.

Step 5: Identify legal risk in Sales and Marketing Department

Financial consequences, intellectual land ownership, relationships in the workplace, pension liabilities and legal requirements are just some of the legal difficulties that can arise in an agreed amount. Financial institutions proposing outsourcing, for example, must follow the Office of the Superintendent of Financial Institutions' standards (OSFI). Legal issues must be investigated early on, since their settlement could have an influence on company's ability to achieve the outsource goals.

Step 6: Define deal breaker in Sales and Marketing Department

Precision Electronic can highlight any items that are unsuitable under any conditions up front. These also include an unacceptably high-cost structure, poor quality of service or inadequate cost savings. A contract could also be a no-go if the contractor refuses to take your employees on equal footing or if the vendor recommends sending your confidential information offshore. By identifying those deal-breakers ahead of time it can avoid wasting time on a worthless path.

Step 7: Process

Precision can complete an existing decision in a variety of ways, including releasing an RFP, seeking preferred suppliers or picking one of the current contractors. The company's choice of material will be decided by your circumstance. For larger construction projects, such as when they want to encourage innovation to get the competitive quality, an RFP may well be acceptable.

Step 8: Negotiation strategy in Sales and Marketing Department

To successfully manage an outsourcing agreement the organisation should create a blueprint that explains the business's stance and fallback on critical commercial and legal concerns. It can negotiate team must also be given directions on how to cope with deadlines and internal aspirations in the roadmap.

Step 9: development of vendor selection criteria

The organisation should create a set of criteria to analyse their responses in order and provide a relevant frame of reference across the providers (Bazhenova and Weske 2016). These factors should be created to suit the outsourcing aims. Some criteria will be evaluated on a pass-fail system, while others would be assessed on a point system.

Assumption 

Firstly, Precision Electronic should adopt the strategy of reviewing the business portfolios and sample. Examining the vendor's prior that is their "portfolio" and ensure that their earlier work fits your quality and aesthetic requirements. Consider requesting a contractor to produce a brief mock-up or provide a rudimentary sketch of a work plan if Precision assessed their portfolio, credentials and past experience but are still uncertain of their skills. A network provider who actually wants the business may be capable of supplying you with a general concept so you can better understand how they propose to change their approach. However, never step over the line between obtaining a demonise and requesting final work "on spec" from a contractor (Letica 2016). Secondly, it should negotiate its ownership to work up front because they should make sure that they understand who owns the completed work product and any critical components of it before the business outsource any particular project. Assessing that the network operator is aware of the plans for the deliverable they have offered to accept. The production of a custom software programme for their own use, for instance, varies greatly from the development of this application that you plan to packaged and market.

Conclusion 

Hence, it can be concluded that outsourcing forms an agreement in which Precious Electronics hires another company in which it is responsible for a planned and existing activity. However, considering the issue faced within the organisation if Precision adopts the process of step-by-step procedure of entering outsourcing projects. Precision Electronic requires to adopt the suggested business model so that it can involve the process of transferring the employee along with the asset from one firm to another business. As a result, it will be able to focus on core task of delivering the goods to the customer who requires an urgent delivery.

Reference

Agrawal, S., Singh, R.K. and Murtaza, Q., 2016. Outsourcing decisions in reverse logistics: Sustainable balanced scorecard and graph theoretic approach. Resources, Conservation and Recycling, 108, pp.41-53.

Akanji, B., Mordi, C., Ituma, A., Adisa, T.A. and Ajonbadi, H., 2019. The influence of organisational culture on leadership style in higher education institutions. Personnel Review.

Bazhenova, E. and Weske, M., 2016, September. Deriving decision models from process models by enhanced decision mining. In International conference on business process management (pp. 444-457). Springer, Cham.

Bilan, Y., Nitsenko, V., Ushkarenko, I., Chmut, A. and Sharapa, O., 2017. Outsourcing in international economic relations. Montenegrin Journal of Economics, 13(3), pp.175-185.

Guarnieri, P., Sobreiro, V.A., Nagano, M.S. and Serrano, A.L.M., 2015. The challenge of selecting and evaluating third-party reverse logistics providers in a multicriteria perspective: a Brazilian case. Journal of Cleaner Production, 96, pp.209-219.

Hosny, H.E., Ibrahim, A.H. and Elmalt, A.E., 2019. Factors affecting quality of tender documents. Al-Azhar University Civil Engineering Research Magazine (CERM), 41(1), pp.346-355.

Johnson, S. and Pike, B., 2018. Employee Retention: The State of Engagement in Public Accounting Firms and Why It Matters. The CPA Journal, 88(12), pp.64-66.

Krstić, B. and Kahrović, E., 2015. Business process outsourcing as a tool for improving enterprise efficiency. Ekonomika, 61(3), pp.31-41.

Laplume, A., Anzalone, G.C. and Pearce, J.M., 2016. Open-source, self-replicating 3-D printer factory for small-business manufacturing. The International Journal of Advanced Manufacturing Technology, 85(1), pp.633-642.

Letica, M., 2016. The effect of outsourcing activities selection on the benefits of outsourcing. Management-Journal of Contemporary Management Issues, 21(2), pp.77-97.

Pogorelova, E., Yakhneeva, I., Agafonova, A. and Prokubovskaya, A., 2016. Marketing Mix for E-commerce. International journal of environmental & science education, 11(14), pp.6744-6759.

Schniederjans, M.J., Schniederjans, A.M. and Schniederjans, D.G., 2015. Outsourcing and insourcing in an international context. Routledge.

Talamo, C. and Atta, N., 2019. Tendering Process and Facility Management Agreements: The Role of Invitation to Tender. In Invitations to Tender for Facility Management Services (pp. 1-32). Springer, Cham.

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