Essay On Outsourcing

726 Words2 Pages

Gone are the days when merchant ships would take months and planes would take days and weeks to sail or float around the world from one seaport or airport to another or travel from one part of the country to the other. Science and technology have shrunk distances. Outsourcing is the transfer of production of goods and services by one company to another independent company usually for cost benefits (Keat & Young, 2009). The practice has been around for years and is also known as offshoring when it involves a company in another country. Many large explore the financial advantage of outsourcing as far as to other countries where separate specialized companies located overseas handle different tasks and services. Outsourcing has revolutionized business in all areas, from manufacturing to human relations and promoting rapid business growth. I have personally experienced the benefits of outsourcing where housekeeping and security were always a problem at my former school but when the university authorities contracted those activities to an outside company there was immediate and lasting improvement probably due to their expertise in handling such business. There are many reasons that companies outsource various jobs however, the most important advantage is to save money. Many of the companies that provide outsourcing and offshoring services are able to do the work for considerably less money either because they do not have to provide benefits to their workers have fewer overhead expenses or have cheap labor as prevalent in China. Thus it is often more cost effective to outsource to China and other countries that are more affordable. Outsourcing also allows companies to concentrate on other business issues such as new product developm... ... middle of paper ... unexpectedly pulls out on their contract. In addition there may be hidden costs that could become a problem in future. Recently, labor rates and benefit packages in China are increasing as well as shipping rates, taxes, customs services and duties all of which must factor in when deciding on offshoring to the country. Likewise, the value of foreign currencies is appreciating, making overseas production less profitable (McCormack ,2011). Fortunately, the global economy is now technologically driven and even more, with the use of Internet where payments are guaranteed prior to incurring physical costs associate with exporting or outsourcing products, payments would have been guaranteed. Therefore, most of the disadvantages can be addressed by e- monitoring and proper research prior to outsourcing and in-service training to bridge language and cultural differences.

In this essay, the author

  • Explains that outsourcing has revolutionized business in all areas, from manufacturing to human relations and promoting rapid business growth.
  • Explains the advantages of outsourcing to china, such as low rates, low attrition, large pool of talent, and flexibility of contract arrangements.
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