Case Analysis
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Case Analysis
Description/Major Facts
The case of Marshall Insurance Company proves to be among the most popular and controversial issues that is covered in the business field. To understand the elevated popularity, it is important to reflect on credible information regarding the history of the company. Marshall Insurance Company was launched in 1948 with about $73.5 billion assets. Arguably, during that time, the company was one of the largest companies in the insurance field considering the diverse personal lines of property and public recognition. To supplement the company insurance level, the business was associated with the Marshall Automobile Club (MAC) that sought to provide roadside services to the clients across different regions. The automobile sector operated through the day covering about 750, 000 consumers that included personal residents and companies within different supply chains. Among the major clients that were in association with MAC included the original equipment automotive manufacturers (OEMs) and other clients. The automotive company also offered additional services that included planning of trips, reserving transport expeditions and trip interruption insurance.
Major Problem
Changing business operations to counter existing contracts often render the business at a disadvantage especially during the operational phase. The present major problem that was visible in the case of MAC was the desirable changes that could be experienced in outsourcing management of the storeroom operations and kit assembly. Initially, the procedure for ordering materials and maintaining the inventory records in the case of MAC proved to be strenuous considering the exuberant premium prices of the office space at Marshal. Outsourcing through other companies would imply changing the operational procedures for the company. For instance, in this case, Gilmore would take charge over the printing business for MAC. Gilmore was among the reliable suppliers that had proved its credibility by providing about 30 percent of the printing purchases that MAC required. Such a procedure would warrant the exit of other printing suppliers and render Gilmore in charge of the printing sector dictating companies that would supply MAC.
Possible Solutions
Gilmore proposed to manage the forms and printed material for MAC proving to be a considerable venture that Kara may exploit. However, the issue for outsourcing management as well as other services can be approached through a variety of ways. Contract formation and identification based on the business concepts is among the effective methods of realizing credible operations in terms of business and management. Arguably, Kara identifies that outsourcing based on fabricated assumption often leads to undesired adoption of roles and responsibilities. An outsourcing contract defines the scope of activities and requirements that each party is required to meet. Any outsourcing contract examines the complex operational activities, agreements and exit strategies that MAC is likely to take once the outsourcing contract proves satisfactory or limited. It defines the consequences of violation of the highlighted rules ensuring that each party meets the desired standards.
The advantages of contract outsourcing are tremendously valued across different avenues. MAC stands to benefit from the venture considering that the company will experience reduced costs in the operational procedures as well as the allocation costs involved with identifying workers in the printing sector. Such staff members will require training in the kit fulfilment to perform exemplary as desired. Contract outsourcing ensures that the company meets the required confidentiality standards offered within the scope of the contract. However, the outsourcing contract offers Gilmore complete jurisdiction over diverse suppliers that limits access and growth in relationships.
One of the most effective solutions that may apply in this case involves implementing a human resources management program that will ensure employees are trained on the operational procedures involved in printing, kit assembly that is critical to MAC and document management. Often, the issue of confidentiality that Kara encountered is of great consideration considering that it builds or breaks business relationships. In this case, the implementation of outsourcing leads to uncertainty among the present workforce forcing them to desire greener and better challenges. It destabilizes the human resources sector by rendering the business disable. Therefore, by internally developing levels of excellence for personal and general domains will ensure that MAC covers the issue of confidentiality for its clients. Similarly, concentrated workforce that works in teams is likely to yield timely results in printing the client membership cards. In this case, MAC can outsource training services from Gilmore.
A human resource management-training program proves to be effective in the end since it will enable MAC to control the costs incurred in outsourcing services from companies such as Gilmore. Once the company staffs are trained on the management and design of the Kit assembly and the membership cards, it is likely to ensure comprehensive operational procedures through team cohesion. However, training staff proves to be a disadvantage in the short run since it will require MAC to meet the training costs for all the employees. Similarly, the company is likely to spend more time in training that could be employed to other sectors of business to realize the objectives of the company.
Choice and Rationale
Based on an evaluation of the possible solutions, it is likely to achieve contract outsourcing from Gilmore owing to the benefits accrued from limiting the number of suppliers to deal with the operational procedures. It is impossible for Kara to manage the operations of the entire company particularly the 3,000 square foot storeroom that ensures printing material are kept safe and confidential. Equally, outsourcing will offer MAC the opportunity to experience professional, expert and high-quality services from a reputable company. Similarly, outsourcing from Gilmore ensures MAC of maintaining the operational procedures owing to the fact that Gilmore has identified with the needs and activities of the company. Generally, MAC is able to ascertain a cost advantage in the supply chain. For instance, once MAC chooses an alternative solution such as training its workforce, they are likely to use more time in the planning and implementation phase that derails realization of the company objectives.
Implementation, Monitor, and Control
Contract outsourcing requires a strategic advance if MAC is to accommodate the services rendered by Gilmore. Setting clear objectives and goals that are in accordance with the business and helping Gilmore understand the concerns of the company proves to be a move in the right direction. Identifying the scope of outsourced services beforehand and highlighting them in the contract form come as an advantage to the company. The contract should be well-defined determining the scope of performance and requirements for each party and highlighting the consequences. A significant aspect of the contract is the legal requirements that need to be considered as well as the duration for outsourcing. Clarity in the delivery of such factors offers significant guidelines on the efficiency and adaptability of the outsourcing process. The termination process should be identified precisely in case Gilmore services are no longer needed.