A major concern with outsourcing is that the company may lose <u>intellectual capital</u> by being forced to reveal proprietary trade secrets.
A developing business concept that has shown to be quite successful for companies trying to save expenses and boost productivity is outsourcing.
Loss of control, loss of innovation, loss of organisational trust, and higher-than-expected transaction costs are the four main risk categories linked with outsourcing. Giving a third party direct control over a business process or function is known as outsourcing.
Intellectual capital is the value of a company's employee knowledge, skills, business training, or any proprietary information that may provide the company with a competitive advantage.
The possibility of losing secret information and sensitive data is possibly the biggest drawback of outsourcing corporate procedures. When outsourcing divisions like human resources or customer service, the third party is frequently informed of sensitive information (proprietary trade) that can be readily stolen or provided to the wrong people.
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