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– Nelson Mandela

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Q Total exercise questions - 3 Chapter 10 Experiential Exercise on page 97. Many firms have recently moved toward a modular structure. For example, they have increasingly outsourced many of their information technology (IT) activities. Identify three such organizations. Using secondary sources, evaluate (1) the firm’s rationale for IT outsourcing and (2) the implications for performance.

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The three firms chosen by me are Google, Apple and Microsoft. Now we will discuss the rationale of the firm for IT outsourcing and the implications for performance. I will start with Microsoft as it the senior in the league and was established in 1975. The firm outsources its software developmental services, technical and customer support and service desk support. The rationale for outsourcing for Microsoft is that by outsourcing these jobs the company successfully maintain low headcount resulting in cost reduction. Microsoft is famous for using a talent pool which is specialized in nature when it needs technical support and software development work to be done.