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Effect of outsourcing
Effects of outsourcing in america
Effect of outsourcing
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What are the best ways for businesses to maximize profits? Businesses in the U.S. have answered this question with a very simple answer: make products overseas. This business tactic of using labor services from a third party is known as international outsourcing (Brecher 996). Within U.S. borders, there are certain regulations and restrictions on many aspects of the manufacturing process (Stephanie para 2). However, production is cheaper if they are made countries where regulations are less strict (Wood 25; Stephanie para 1). Despite the profits made from this technique, it can have some repercussions on the U.S. economy and the environment of nations occupying those factories (Marquis 39; Ahmed 192; Zhang 776). This springs a debate to whether more concern should be held for the outcry of Americans to bring jobs back to the U.S. (Ahmed 192; Stephanie para1) or to the freedoms of the businesses and their right to seek a profit (Salanţă 270).
Both sides can agree that outsourcing can be desirable for a business do to the potential profit. It allows goods to be made cheaper, management to run smoother, and money to be made faster (Salanţă 270). Both sides can also agree, however, that U.S. jobs are lost as a result of outsourcing (Ahmed 192), as well as environmental damage being cause due to corporations taking advantage of loose environmental regulations (Marquis 39). Upon digging deeper into this debate, one can find that both sides present very convincing arguments.
In many cases outsourcing has proven to be beneficial for businesses. It can help a business’s management by allowing executives to focus on the core structure of the firm rather than every specific element. Production, manufacturing, or additional servic...
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Wood, Joel. "The Effects Of Environmental Regulation On The Competitiveness Of US Manufacturing." Fraser Forum (2012): 25. Business Source Complete. Web. 6 Mar. 2014.< http://eds.a.ebscohost.com.gatekeeper2.lindenwood.edu/ehost/pdfviewer/ pdfviewer?sid=232efdbd-1043-415b-af6f-5a75b828a29a%40sessionmgr4003&vid= 5&hid=4111>.
Zhang, Ting. "International Outsourcing And Unemployment In A Minimum-Wage Economy." Review Of International Economics 19.4 (2011): 776-786. Business Source Premier. Web. 11 Mar. 2014.< http://eds.a.ebscohost.com.gatekeeper2.lindenwood.edu/ ehost/pdfviewer/pdfviewer?sid=b295036e-d1cf-4835-97be-785c1702a15c% 40sessionmgr4001&vid=3&hid=4208>.
[5] "Increasing Number of Regulations Challenge Manufacturers." Industry Week. N.p., 24 Oct. 2013. Web. 11 Dec. 2013. .
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
...nges that may have once been a regulation, but that still effects the environment. Other larger plants and companies are beginning to change the way that they take care of certain waste products because they have been brought into the public light and some groups have begun to campaign against the larger companies that are dealing with the regulations. The environmental push that is being created is affected by the ‘race to the bottom” even though regulations may be decreased the problem is already out in the public so it seems that since there used to be such stringent laws. The increased competition that can be created by the companies which are similar plays into interest groups. State policies are changing the way that larger companies are dealing with the environment as well as aiding in the improving the environment after there has been major damage done.
Mankiw and Swagel (2006) argue outsourcing is not as large a phenomenon as the media describes. Their research indicates outsourcing accounts for very little of job loss in the United States, nor has it made a distinct contribution to the slow rebound of the labor market. They go on to propose that increased overseas employment has actually contributed to higher employment in parent United States companies. They reported that while 30,000 jobs were lost per month in 2004, two million job changes per month were happening as well. They reference the Bureau of Labor Statistics when they report that in 2015 there are expected to be 3.4 million jobs outsourced, but 160 million jobs gained here in the United States. They also claim that there is a rise in net US income by 12-14 cents per dollar of outso...
The U.S. has approximately 119,000 companies involved in the environmental technologies and services industry, which is a $782 billion market. Also, firms must offset new or additional emissions with emission reductions by a 5-to-1 ratio. This means any firm who increases their emissions output in one area by one ton must reduce their emissions output in another area by 5 tons (McKee, 1991). Finally, new emissions producing companies will have to start up with state-of-the-art equipment.
Jim is a upstanding, hard working, American computer programmer who recently lost his job to a man who doesn’t provide the correct code or patches for the computer programs he builds. This man is living in a far off country providing money that doesn’t benefit Jim or America, now Jim has a nice spot in the unemployment line. This is not how any good employee should be treated, but now many companies are dropping their good employees for cheaper foreign employees. Recent outsourcing is factor in the recent downturn in the U.S. economy.
Since the concept of outsourcing was introduced it has been a subject of debate between politicians and citizens of the United States. Remarkably, it was the United States who supported outsourcing and now it is the United States that feels its economic progress is being threatened by outsourcing. One may argue that the financial situations that existed two decades earlier are not the same as they are today, thus the change of time, business priorities of economies have also changed.
As the problem of job outsourcing becomes more of an issue in politics, elected officials like the President and Congress will no longer be able to ignore the dilemma. The war in Iraq has been at the forefront of the presidential race but the importance of outsourcing American jobs seems to have been slightly overshadowed. If the issue of outsourcing is not watched carefully and a definitive plan hammered out, a trickling down of negative effects may occur within the U.S. economy. However, there is a polarized opinion on the effects of this “phenomenon”.
Do you ever wonder what our nations underlying focus is? The answer is simple and should be fairly easy to guess… Money! Outsourcing originated from someone coming up with the idea that we can make products for practically nothing in other countries and make very high profits. Although it seems like a great idea to businesses, it negatively affects our country. American consumers are buying these products that are made in other countries and the companies profits are continuing to rapidly increase. At the same time, people that are in the production field of work in America are losing their jobs because producers would rather pay foreign workers to get the job done for a much lower wage. When it comes down to it, one of the reasons our economy is suffering is because of outsourcing. Basically, it all comes down to money. The consumers don’t pay close enough attention to where the products are made. Therefore, consumers are spending extra money and are causing outsourcing to thrive. The lack of knowledge Americans have on the subject of consumers affecting outsourcing is leading our country to economic stress but if we begin to recognize the issue, the jobs we could potentially save may be our own.
Kibbe, C. (2004, 07 09). Outsourcing: the good, the bad and the inevitable. New Hampshire Business Review, pp. 1A-21A.
Outsourcing has been around for many years. In this paper, I will discuss some of the history of outsourcing, the good things about outsourcing, and the bad things about outsourcing. Outsourcing is important because many companies rely on it in order to get many different products and services to their facility on time and in good shape. Outsourcing is a huge part of the business industry today. Any business can be affected by outsourcing.
Outsourcing is morally wrong, outsourcing is not fair, outsourcing allows for fair taxes to be avoided, only corporations benefit from this practice, outsourcing is contributing to the economy’s fall, and outsourcing is damaging the already damaged economy. There are just too many negative aspects in outsourcing, in the respect that it continues to benefit only particular groups, while the rest are left to unfairly deal with this custom. Outsourcing is having an adverse reaction with the economy; although it may be fine now, it may prove to be a problem in the future.
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
Outsourcing may help whatever country the factory is ending up in, but in America, it causes substantial job loss. The US has lost at least six million jobs since 1980, both in manufacturing and white collar work. This causes a mass decrease in the US’s national GDP (Gross Domestic Product) by 18% in the last six or seven decades. People can be fired at any given point to be replaced by someone willing to do the work for less money, making jobs less secure. Reliance on imports increases as the outsourcing does. These are a few of the major issues with globalization (Collins).
Regulations provide the baseline environmental standards that industry is required to follow. Without environmental regulations, industry would not be able to meet the same standards by themselves. Environmental regulations may not always be in the best interest of the industry due to their costly and sometimes prohibitive nature. In response to these concerns, the establishment of incentive programs increases the likelihood of industry complying with and potentially exceeding the minimum environmental standard. Incentive programs motivate industry to meet and exceed environmental standards by allowing them to benefit financially by aiming for higher than regulation