Discussion Market Structures and Cost Management
In the business environment, managing costs is one of the major problems and focuses. If there is anything that worries the business is the fact that they can manage the costs. You cannot pass during one week where you read that a business is laying off some of their workers because they are "managing costs" or they like to call it "organizational restructuring". Anytime you hear the term "organizational restructuring" that means that the company is considering laying off people and getting rid of some of the positions. One of the methods to control for costs is to outsource. Whether we like it or not, outsourcing is proving to have significant impact, and sometimes survival, or the company. To maximize profits, we need to have either increase revenue or decrease costs and the later seems easier in many cases. The question is what are some of the industries that you can outsource in and what are the ones you cannot? How can you balance between outsourcing (cost reduction) and keeping the workers in your homeland happy to avoid media issues? And finally (and the most important question) does the outsourcing ability the derivation is mainly based on the market structure (monopoly compared to perfect competition)?