Traditionally, companies kept as many departments in house as possible. In today's market this is not possible. There is too much competition, management's paychecks are TOO high and not enough loyal customers to sustain these operational costs.
In order for a company to remain competitive and make profit, restructuring will have to take place. You will see in house departments shrinking. Companies now can outsource: human resources, payroll, IT, sales forces, marketing strategies, advertising and various manufacturing needs. The Bush Administration has been trying to encourage this insentive with his Small Business Agenda.
Don't worry, a lot of good does come from this.
- First and foremost, it brings back the small business owner.
- Second, competition is kept. More businesses will be able to compete in today's market with less overhead.
- Third, the large corporation will have to survive through performance covenants rather then creative accounting.
- Lastly, it makes taking a business or idea international a lot easier and more cost effective.
This is called Outsourcing. A business strategy that started getting more play in the late 90's. And it will take a little time to transition into. Greed has left many of the publicly traded companies with dismal financial reports and broken performance covenants.
Excellent 2 cents ;-) Thanks!