In this report I will discuss what Outsourcing is and explain the various theories, frameworks and models that can be used by organisations. Furthermore I will look at the new pharma model ‘The network approach’ and explain it in depth and how it can affect the pharma organisation and the industry as a whole. Finally this report will look at a small section on how GSK uses the Network Approach.
Introduction
There are various ways of defining out sourcing however they all come to the same conclusion which is a strategic use of outside resources. Griffiths defines outsourcing as “the strategic use of outside resources to perform activities traditionally handled by internal staff and resources” (Griffiths); Investopedia also describes it as an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce the good internally. An example of a manufacturing company outsourcing would be Dell buying some of its computer components from another manufacturer in order to save on production costs. Alternatively, businesses may decide to outsource book-keeping duties to independent accounting firms, as it may be cheaper than retaining an in-house accountant (Investopedia). Lastly Marty Pine describes outsourcing as “the strategic use of outside resources...