Mcdonald's Outsourcing: Pros and Cons Term Paper

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The downside for UPS in outsourcing is that the outsourced customer service may be less familiar with the culture of the typical consumer, may be removed from the processes taking place, and also because the packaging and delivery industry is a service-driven business. Many companies and even the U.S. Postal Service can ship goods, but quality and reliability of service separates competitors. A customer may wish to select the company to use because of a good 'feeling' that the company gives personalized service, and wants to know that the company's customer service goes the extra mile to show an interest in their business as a customer.

As a product-driven business, Nike does not have the same problems as UPS. It also can benefit from being able to produce shoes in greater volume and at cheaper economies of scale, by using cheaper outsourced labor in its factories abroad. Also, the inability of the production line staff to understand American's fascination with Nike's high-end fashion or running sneakers does not affect consumer demand in other nations of the world, because Nike sneakers are still seen as a very special commodity, regardless of who makes them or where they are made -- the appearance of the shoe is not affected by where it is manufactured.

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However, as with UPS, only perhaps more so, the workers at a factory unlikely to feel a sense of Nike 'pride' or an investiture in the company's future success because the company's culture and tangible assets are so far removed from the location of the manufacturing plant. Nike's relatively youthful status as a company may make the company more flexible to using new opportunities to outsource as a way of eliminating ineffective, traditional processes, but outsourcing too many processes threatens the cohesion of an otherwise tightly-knit company with a strong corporate culture and image, and has also injured the company's image because of the negative publicity conditions in its outsourced factories have generated. Outsourcing has not affected the quality of Nike shoes, but it has hurt Nike's image in a style-driven business.

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