outsourcing is a strategic decision of a company to use an outside organization to perform work that is typically done within that company. This strict definition of the term covers only activities that were once internal to the company and includes only the process of moving the activity to the outside. In this sense, the term can be defined as using a third party to service a particular product or using a technology provider to move into new delivery channels and markets. Outsourcing also includes managing the relationship between the buyer with its provider, or outsourcer, because nothing is more likely to lead to an unsuccessful venture than neglecting a partner lanz amp barr, 20, p.1. Like traditional selection process, the outsourcing process includes all the steps of planning, selecting, and managing the service providers. In comparison with purchasing or contracting out, outsourcing, however, differs in the strategy that drives it.

In general, it is a strategy that allows companies to focus their talent and resources on improving and expanding activities that generate revenue, minimizing the effort spent on maintaining the infrastructure that supports the core of the business while also exploiting the skills, technology of some suppliers to strengthen their core competency as well as maintain their non core sector murray amp kotabe, 19, p.794 leavy, 2001, p.47. _ _ the range of arrangements between purchasers and service providers highlights a variety of outsourcing forms. Depend on the length of contracting time and the level of risk share, outsourcing arrangement can be classified into four types: total outsourcing, selective outsourcing, strategic alliance sourcing and insourcing currie amp willcocks, 1998, p.122.

Total outsourcing is when an organization chooses to contract out its service to a large single, preferred, trusted supplier. These contract usually last for five or ten years with the aim of nurturing partnership between the organization and that supplier. Total outsourcing enable the organization to concentrate on its core business activities, and remove the burden of having to manage and control what it considers to be a non core service activity. However, total outsourcing carries with it the greatest interdependency between buyer and supplier and its success depends upon the development of a successful partnership between the two parties currie amp willcocks, 1998, p.126.

The notion that a single vendor cannot possess world class capabilities in all areas of business leads to the view that companies should embark on selective outsourcing to multiple vendors. Selective outsourcing, sometimes called transaction based contracts, which are usually shorter, single contracts, with a supplier who compete with other suppliers for the business of the client kakabadse, a. With this type of outsourcing, the interdependence of client and supplier is reduced to some extent as the client can flexibly switch from one supplier to another for the purpose of its business currie amp willcocks, 1998, p.126. Strategic alliance sourcing is entering into an alliance or a joint venture with a supplier on the basic of shared risks and rewards. It might be implemented by selecting an existing supplier or forming a new one to which service can be outsourced. By doing this way, the organization can be able to influence the strategy and planning processes of the supplier as well as access to particular managerial and technical skills, which it does not have in house currie amp willcocks, 1998, p.124.

A Level English Paper

Strategic alliance sourcing might derive from the exposing of internal cost based activities to market forces, thereby turning them into separately managed profit centres, or have been viewed as a desired, alternative form of organization for the future chalos amp sung, in kakabadse, a. Insourcing is a strategy in which an organization would like to reduce risks and interdependency between it and the supplier by retaining an in house service section and insource technical capability in the form of contractors in accordance with the peaks and troughs of the service needed. Insourcing solves the problem that, in some cases, the in house technical capability is equal to, if not greater than, that of supplier therefore, outsourcing would not gain benefits such as accessing special skills or human resources. However, there is no guarantee that an in house service section, with contractors being managed internally as permanent staff, will create more effective service operations currie amp willcocks, 1998, p.127. According to murray and kotabe 19, p.792 , when classifying outsourcing in terms of locational and ownership aspects of service sourcing strategy, there are also four types of outsourcing: internal versus external sourcing ownership and domestic versus global sourcing location.

Recently, increasingly rapid changes in all aspects of the environments, and in technology and international deregulation have challenged large corporations to compete on a global scale kanter, in hendry, 1995, p.194. To meet this competition the giants had to learn to dance, to be flexible themselves, and to do more with less. Critically reviewing the sources of their value added, many were beginning to contract out non core functions and move towards to fast moving, fashion based industries hendry, 1995, p.194. Hendry also states that the forces of competition were greater by the effects of the recent recession, and cost cutting in all forms became today essential. And among measures like downsizing, delayering, internal markets or reengineering, outsourcing also remained a key element of the cost cutting mix kakabadse, a.