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Paper Topic:

Outsourcing (Feed or Farm Out)

Case Study 3 : Outsourcing (Feed or Farm Out

Review the strategic issues presented in the case

There are various interlinked strategic issues discussed in the Harvard Business Review case Feed R D or Farm It Out ' by Nitin Nohria . The case is about RLK Media and its managerial dilemmas . The case presents strategic issues related to outsourcing and its relation with marketing human resources , research and development and overall managerial decision making processes . Company 's external environment has changed tremendously from the past and this has impact on its internal environment

as well . Competition has increased from various competitors like Japanese giants and others . One section of management considers outsourcing as a viable option as it can help in maintaining cost and time whereas other section of management believes in expanding manpower in research and development area

The main strategic concern comes from the market in the form of increased competition and decreased sales and profit margins . The brand has its good market value . Stakeholders associate the brand RLK with high quality and high-end audio video design . High brand value is not sufficient enough to encourage consumers to buy the products of RLK . Low sales are one of the prime concerns for Keith Herrington , the Chairman of RLK , whereas for Lars Inman , the CEO of RLK innovation is the prime strategic tool . There is a growing trend of outsourcing services of different company for various operations of an organization . This provides an opportunity to cut cost but lowering fixed and operative costs . Competitors of RLK like Pycosonics are outsourcing their research and development services from the Asian companies . It is costly to hire celebrity engineers inside America . Lars himself is not convinced with the idea of outsourcing whereas the circumstances like the financial limited time and pressure from chairman has forced him to consider this aspect as well

As Azim Premji rightly identified Lars has gotten himself into a tough situation . It seems that his company 's survival depends on the success of a single product that it doesn 't have the expertise to develop

Five experts have covered different issues from the incapability of Lars to the challenges of outsourcing . Two core issues to be considered are marketing and organization behavior . Lars as a CEO has multiple responsibilities and accountability for the organization 's performance In this case , organization is in crucial stage and any wrong strategy can result in disaster . Within the organization , there are visible differences among people at top management levels . These differences are results of communication gap and lack of identical goals . There are issues on consumer behavior , organization culture , cultural differences of these two companies and nations and retaining the talent within the organization and encourage people to work for common interest or goals There are different perspectives to research and development of CEO Chairman and Ray Ketner , RLK 's founder and chief scientist . Each of the perspective is important for the organization . It is important to understand consumers ' needs and requirements , cost is...

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