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Although companies may perceive outsourcing as an alternative to reduce costs as a result of access to economies of scale and improve performance as a result of unique expertise that a large outsourcing vendor can deliver (Roodhooft and Warlop 1999 cited by Jiang and Qureshi 2006), outsourcing has many hidden cost and risks that can lead to create various financial and non financial problems. This essay will discuss whether outsourcing achieves economies of scale. More specifically this essay will explore current trends in outsourcing. Then it will discuss how outsourcing vendors achieve economies of scale and cost reductions...
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