Several theoretical frameworks are currently available when it comes to evaluating the benefits of outsourcing. Outsourcing is merely the practice of a company to obtain consultation, services, and goods from an organization that might not be under the managerial hierarchy of the obtaining company.
Studies have established that airline industry stands a better chance to benefit from outsourcing since the industry is cyclical. One of the main reasons for outsourcing is cost reduction which forms the primary advantage of outsourcing in the airline industry since specialized providers would perform most of the repetitive jobs. The firm would thus save on both salaries and benefits in addition to enjoying the economies of scale achieved by a contracting company that performs one type of work for various airlines. The other advantage of outsourcing is the drive for the firm to focus on essential functions which would increase their productivity. Through outsourcing, the company will then focus their efforts on primary businesses and diversification opportunities.
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Despite the massive economic advantages that have been associated with outsourcing in the aviation industry, there are some significant concerns related to the impact of outsourcing on the airline employees, pride, and loyalty or even the safety of operations. Studies have pointed out that outsourcing has dramatically complicated the current situation further through eliminating the functions that were previously performed by the airline staffs. Despite the fact that majority of the airline has attempted to relocate their teams in the company or even hired by an outsourcing firm, the majority of the employees have been forced to lose their jobs or also accept jobs with an outsourcing organization at lower salaries.
According to Gabriel (2005), there is a close correlation between outsourcing and employee dissatisfaction. Airline staffs understand the value of their current jobs for the airline‘s image and the competition with other major carriers. However, such an attitude might be different for the staffs of the outsourcing firms. Since the outsourced functions are typically carried out by the contracting company for most airlines with staffs being paid significantly low salaries, one would not expect them to value their services to the airing company nor would they demonstrate pride and loyalty. Arguably, such a case is a non-quantifiable are of the probable disadvantage of outsourcing. Nonetheless, based on the fact that this might not be measured, it does not necessarily prevent it from affecting the overall outcome of the airline carrier decision to outsource most of their works. Further outsourcing exposes the aviation firm to numerous business agreements that might end up damaging the company from the perspective of product quality, delivery in addition to service monopoly.
In this analysis, the debate put forward on the cons and pros of outsourcing in the aviation industry entirely focuses on the overall benefits the company stand to enjoy when they adopt outsourcing at the expense of employees hence raising ethical concerns. Ethics revolves around what is considered to be right and wrong because outsourcing would eliminate the need to have certain employees since their work would be taken by outsourcing companies. The analysis focuses on how the aviation industry would greatly benefit rather than how it would improve the company and employees at large. An action taken by the firm should result to greater good of the greater majority as Mills states but this would not be the case with outsourcing.
I firmly believe that the aviation industry is highly competitive besides being subjected to intense regulations that ultimately impose constraints on their strategies. Therefore, outsourcing stands as one of the most effective business strategies for cost efficiency in addition to other significant advantages. Outsourcing will thus cut down the cost and improve productivity where the company will focus on profitable activities. Before, deciding on whether an aviation company should outsource, it would be important to weigh the benefits and risks associated with and the long-term impact on the success of the business. However, I would recommend that these companies should outsource since as a strategy the firm would gain competitive advantage and economies of scale.
