Track: Global Manufacturing

Abstract

In today’s rapidly evolving market, it is difficult for startup companies to survive if they do not have a high-growth profile. Scholars believe that either the startups expand rapidly to capture major market segment or they slowly die out. Large companies usually outsource non-core activities to invest additional resources in the core activities, whereas, expanding startups have limited flexibility and have to outsource business activities in order to survive the high-growth expectation of the market. With limited resources at the entry level, startups certainly have no other choice except outsourcing business activities. There are various advantages and disadvantages of outsourcing depending on the business the company is operating in. Various companies fall into the trap of outsourcing activities that are important to keep inhouse. The present study offers a decision tree comprising the most critical parameters that enables the user to differentiate activities to be kept in-house from those to be outsourced. These parameters include measuring the business activity on the basis of standardisability or specifiablity, receiving input for innovation, establishing proper barriers to entry in place, and keeping correct contract agreements setup with the suppliers.