The document discusses various topics related to outsourcing and downsizing, including: - Definitions and examples of outsourcing, as well as advantages like increasing expertise and disadvantages like loss of control. - The importance of identifying core competencies to develop competitive products and services. Flexibility and innovation are discussed. - Downsizing is defined as reducing company size by eliminating workers/divisions to cut costs and increase efficiency. Advantages include labor cost savings but disadvantages include skill/knowledge loss and employee stress. - Examples of companies that have significantly downsized include HSBC, GM, and Toyota which avoided layoffs during an economic crisis through strategies like reduced hiring and intermittent production schedules.

1. Enes BOLFİDAN 1013.16015
Feyyaz AKKAYA 1213.16032
İsmet BOYACILAR 1213.16030
Mert AYHAN 1213.16002
Ozan KARABAYIR 1213.16006

2.  What is outsourcing
 Advantageous &Disadvantageous
 Examples of Outsourcing
 Types of Outsourcing
What is core competency
Core Products
Developing Core Competencies
Definition of Downsizing
Why do firms Downsize?
Advantageous & Disadvantageous
Examples of Downsizing
Contents

3. What is Outsourcing?
• Outsourcing is a strategic decision to give a task or activity to
an independent contractor who determines how best to do the
task or activity.
• The firm and the independent contractor become partners and
may establish a long-term relationship.
• Examples of outsourced activities: IT, HR, Legal services,
Manufacturing, R & D.

4. • Why Outsource?
– Provide services that are scalable, secure, and efficient, while
improving overall service and reducing costs

5. Outsourcing Advantages:
• Increasing expertise
• Better quality people and knowledge
may be applied to an activity or task
by the outsourcing firm.
• Reduction in administrative costs may be possible when
certain tasks are outsourced.
• Outsourcing certain activities and employees that do not fit
with company culture may be used to preserve a strong culture
or employee morale.

6. Outsourcing Disadvantages:
• Outsourcing may lead to loss of control of certain activities
which may be a problem on time sensitive projects for
example.
• Outsourcing an activity may result in loss of the opportunity to
gain knowledge and information that may have general
application to other key processes and activities.

7. Examples of Outsourcing
 Call centers for Brazil in Angola
 Legal and finance service in the Philippines
 IBM providing travel and
payroll for P&G
 ADP processing payroll
for thousands of firms
 Blue Cross sending
patients to India

8. Types of Outsourcing
Purchasing
Logistics
R&D
Finance/accounting
Service management
Human resources

9. Desirable Outsourcing Destinations

10. Outsourcing may not be appropriate when:
1. The task is a core activity critical to strategy or technology.
2. Task is highly interdependent with core activity due to
technology or work design.
3. Task requires great deal of firm specific human capital or
access to proprietary information.
4. Tasks where the employees work in close proximity to regular,
core employees and are similar socially to them.

12. What is Core Copmetency?
Core competencies are the skills and processes that are used
to develop a company's core products and services -- those
products and services that give the business a competitive
advantage over other businesses and are important for the long-
term growth of the company.

14. Importance
Core competencies create value and cause a customer to
chose your company's products over another. These
competencies are most likely to be in core areas of the
company.

16. Innovation
Innovative companies have a competitive edge in the
marketplace.
Companies should never stop innovating. Small businesses
have become successful against bigger competitors when they
are nimble and relentlessly innovative.

18. Quality
Quality means reliability and performance. Japanese
automakers gradually took over market leadership by making
quality one of their core competencies. They deployed new
concepts such as just-in-time manufacturing and total quality
management to incorporate quality in all stages of design and
manufacturing.

20. Identifying Competencies
Core competencies are generally not a single process but a
combination of processes, technologies and skills. Core
competency arises from the integration of different parts of
the business, such as design with technological innovation.
Core Products
Core competencies are used to develop core products.
These products may not be sold directly to consumers but are
used in products that are sold to consumers.

22. Flexibility
A company's core competencies are not fixed. They change
over time as a company adapts and changes to a changing
business climate. Core competencies should enable a company
to create new products and services.

23. Customer Service
Small businesses
that provide
exceptional
customer service
have a competitive
edge in the market.

24. Other Competencies
Other core competencies
that give organizations
competitive advantages
include strategic customer
targeting and a superior
Internet presence.

25. Developing Core Competencies
Core competencies do not
always develop on their own;
putting a plan in place to
develop and leverage your
personal and organizational
core competencies is the key
to fully realizing the benefits
of this concept.

28. DEFINITION OF
DOWNSIZE
Reducing the size of a company by
eliminating workers and/or divisions within
the company. It is sometimes referred to as
"trimming the fat".
When a company downsizes, it is
attempting to find ways to improve
efficiency and increase profitability.

30. Why Do Firms Downsize?
-Reduce costs.
-Reduce layers of management to increase decision
making speed and get closer to the customer.
-Generate positive reactions from shareholders in
order to valuation of stock price.
-Increase productivity.

31. STAGES OF DOWNSIZING
Stage 1; the decision to downsize
Stage 2; planning to downsizing program
Stage 3; making the announcement
Stage 4; implementing the downsizing program.

33. Downsizing has its set of advantages and
disadvantages for both the owner and
employees.

34. ADVANTAGES OF
DOWNSIZING

35. Advantage on Management
A single owner cannot manage a larger company
or be active in all decisions, tasks or projects.
Downsizing gives an owner more control of the
management team, of the individual projects and
creates more opportunities for the owner to
interact with employees at all levels

36. Labor Cost Saving
The primary motive for laying off employees is to
reduce company labor expenses.Cutting jobs is
therefore one of the quickest ways to significantly
lower costs.

37. Assets Sale
By downsizing an entire store, you don’t only
deduct employee costs, but you also have assets
that you can sell. For instance you can sell the
building, equipment, supply, furniture and
decor to raise funds as part of a sizable
downsize

39. DISADVANTAGES
OF DOWNSIZING

40. Public Image
A downsizing business may be viewed negatively
in the public. A business firing employees and
decreasing the amount of clients and production
may look like a failing business

41. Skill and Knowledge Loss
Eliminated employees retain knowledge that is
often lost during downsizing. many critical
skillsets and business information will still be
forfeited when employees leave the company.

42. Employee Stress
Employee positions are eliminated during a downsizing, but
the quantity of work generally remains consistent.
Remaining employees are saddled with additional
responsibilities and requirements that can impact the
amount of work they are expected to perform. Initially,
employees may be more productive since they still have a
job, but the stress due to workload increases quickly and can
erode the initial productivity boost.

44. EXAMPLES OF
DOWNSIZING

45. HSBC Holdings
HSBC Holdings, an international banking and
financial services concern, laid off 5,000 people in
2011 and has plans to lay off 25,000 more. HSBC
Holdings has already shut down its operations in
Russia and Poland, the site notes, and closed 195
branches, many in New York.

46. General Motors
General Motors and rivals Ford and Chrysler comprise the "Big
Three" American automakers. The sweeping layoffs GM and
other automakers implemented in response to a drop in sales were
a devastating blow to their workers and to local economies. The
Street.com website cites various sources that calculate a GM
layoff of between 75,000 and 100,000 workers in a 11 year
period between 2008 and 2010, depending on whether closed car
dealerships were taken into account.

47. Toyota
Toyota even though manufacturing 7000 car in a year,period of
2001 crisis no personal was layed off.
-How did Toyota lay off no personal?
The answer is saving and recruitment. It didn't employ new
employees. In some particular days production process worked,
the rest of week manufacturing process was not active.
According to management department of Toyota, employees
were most important value of factory. Today workers of Toyota
proud working in this company and they are working to get the
corporation to top of sector