GLOBAL OUTSOURCING: PREREQUISITE TO SUSTAINABLE COMPETITIVE ADVANTAGE WITHIN THE OIL INDUSTRY

Charles A. Briggs
Southern University at New Orleans

ABSTRACT

Global outsourcing has clearly made the structure of international competition and consequent labor market adjustments more intense. Typically, firms today are embracing outsourcing as a means of reducing cost, and in the process, alter their essence as competitors and their ability to exercise the same level of market power in the future as they previously did. As part of corporate strategy to lower cost, improve service, acquire expert skill, improve processes, improve focus on core activities, and gain competitive advantage, firms delegate their major non-core functions to specialized and efficient service providers. The continuous fluctuations in oil prices are constantly pushing the oil industry to find ways to cut cost. As a result, companies in the oil industry took the outsourcing idea one-step further and found that one way of outsourcing their logistics functions is to ally and collaborate with competitors. The purpose of this study is to explore some oil industry mergers and acquisitions, the oil industry outsourcing and trends and finally identify some potential risks and benefits of outsourcing decision.
Keywords: Global outsourcing, outsourcing risks, competitive advantage, cost reduction and containment