Outsourcing makes businesses more competitive, increasing their exports and their profits and placing more investment surpluses in their hands which can be deployed to make more jobs -- Indian Prime Minister Atal Bihari Vajpayee (1)
Outsourcing is a business trend that has shown great growth over the last few years. Outsourcing in the United States dates back decades, but did not become a major movement until the 2000’s after NAFTA was formed, with the biggest growth seen in recent years, as stated before. Outsourcing is defined as an arrangement in which one company provides services for another company that could also be or usually have been provided internally. Outsourcing happens for a variety of reasons. Among them are ; Reducing and controlling company cost, improving cost company focus, gaining access to world-wide capabilities, freeing internal resources for other purposes, insufficient resources are available internally and sharing the risk with a partner company. Despite how many of the above reasons for outsourcing do look entirely beneficial, there are many negative side effects of outsourcing that trouble the American workforce. More and more Americans are starting to fear that their jobs might be at risk due to outsourcing. In the beginning, outsourcing was used for menial, factory jobs that offered low pay and had a strenuous schedule. However, in recent years, jobs that are more prestigious have been outsourced as well. For example, many engineering and computer technician jobs have been outsourced. These computer technician and engineering jobs are jobs that require a four year bachelor’s degree in engineering, computer science or computer information systems. It does not just end with those fields, either. Dr. Paul Craig Roberts of Globalresearch states: “In what might be an underestimate, a University of California study concludes that 14 million white-collar jobs are vulnerable to being outsourced offshore. These are not only call-cente...
Canadian companies are beginning to outsource more and more jobs outside of our borders to foreign countries. Outsourcing out of the country comes with a lot of benefits and risks for both the companies and the economy. There are a multitude of different jobs and services that can be outsourced; a few of the main ones include IT services, technical and customer support services, manufacturing, and legal services. Even though outsourcing saves companies a lot of money and makes it easier to keep your business running, it still poses a very large treat to our economy since it leaves Canadian citizens out of the job and instead gives them away to foreigners. Even with this problem however, I still strongly believe that outsourcing to other countries outside of Canada is a wise business decision and should be allowed to continue. I will demonstrate this belief by contrasting the advantages and disadvantages of outsourcing outside of Canada.
As the world has observed over the years rising levels of poverty in various countries thanks to a mixture of rapid globalization, changes in technology, the desire of expansion and higher profits of giant multinationals, and the inequality that already exists thanks to other sociopolitical and economic problems; a nation's economy can definitely find itself hurt pretty easily in a fatalistic chain of events once a local company opts to use outsourcing as a way to increase f...
“Did you hear the news? No, what happened? We are shipping all of the IT jobs to India …” Water cooler conversations are beginning to sound more and more like this. Outsourcing of jobs has become a major concern for employees at large corporations (technical or financial). The economic drought that the United States faced in 2000 to late 2001 led to numerous cost-cutting measures, but none more effective than that of outsourcing. The outsourcing of jobs is now a necessity in the United States, so companies are forced to send jobs to places such as India to keep costs down, all the while trying to balance the advantages and disadvantages of the move.
The issue of outsourcing has been one of the major component that is affecting the labor market and the economy of the U.S as the big companies that which employees a large population of the United State employees has now shifted their operations oversees where they can find a large demand for cheap labor and low taxes. This issue has complicated the situation of the U.S economy considering that the rate of unemployment is increasing day by day. The issue of outsourcing must be behind the increased rate of unemployment in the country as this jobs that are outsourced to the foreign countries would have been occupied by those skilled Americans who can now find no job or end up getting jobs that which do not fit to their skills (Hira, pg. 63). There is a relative demand for skilled workers in t...
For advocates of global business, the hope is that outsourcing will help lift the United State’s economic growth and development by lowering the input cost of services (i.e. labor and materials) and by opening new markets abroad. Mainstream economists believe that outsourcing will have ...
Before acquiring its current negative connotation, outsourcing referred to the practice of turning over parts of a business to a company that specialized in that activity. For instance, Cisco Systems, Brocade Communications, and other leading original equipment manufacturers (OEMs) outsource their manufacturing to Solectron Corporation, where I was a summer intern. By partnering with Solectron, OEMs can gain access to the latest equipment, process knowledge, and manufacturing expertise without making substantial capital investments. In essence, outsourcing to Solectron enables OEMs to focus on their core competencies of research and development and sales and marketing. OEMs have found that the benefits they have gained from outsourcing their manufacturing to Solectron could also be acquired from offshore outsourcing their computer programming to lower-wage countries such as India, Russia, China, and Eastern Europe. The difference lies herein at the heart of the offshore outsourcing debate; when OEMs outsource their manufacturing work to Solectron, the jobs still stay in America, but not so when they offshore outsource software programming to India. A similar debate raged in the 1980s and ‘90s, as employers pulled manufacturing jobs out of the United States and moved them to Mexico, China, the Dominican Republic and other countries where workers were cheap and regulations were loose. However, the economic boom of the late ‘90s eased the pain of those job losses. These days, the movement of low-skill jobs is so commonplace it barely sparks an argument. The latest migration of jobs overseas is more stark because it takes the most desirable positions ...
Due to the lack of employment in foreign countries, companies that outsource work overseas are not only beneficial to themselves but also to the service providers being employed. The initial benefit that catches the public’s eye from outsourcing is a cost reduction on the company’s part. But that is not the only benefit from outsourcing or even the key benefit that causes companies to outsource, on the other hand, outsourcing has its disadvantages as well. Outsourcing, like every developing idea being implemented into our economy, has its pitfalls and drawbacks such as staff cuts and information leaks, there are also cases of breach of contract. Despite all the advantages and disadvantages of outsourcing, it is a wheel in motion and is becoming more than just a question of whether or not a company will outsource but it is a question of how much or how little of the company’s work will be outsourced offshore. This having been said; let us discuss the benefits and pitfalls of offshore outsourcing.
Outsourcing is nothing new. It is a difficult issue to handle and tackle, supporters and detractors agree on one thing. That outsourcing will not be eliminated to a complete. That is why I wrote on what is outsourcing, how it affect the economy, and can it be stop.