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 ... ...er 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.
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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.
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...
Many people think that outsourcing is jobs that were held in this country going somewhere else. That is not entirely accurate. Outsourcing is actually one company paying another to do some work for it. Outsourcing can be as simple as paying a company to paint your building. Or it can be as complex as paying a company to control your human resources department.
Outsourcing is a complicated and a multifaceted subject that involves a “business[’s] purchase of parts or labor from another company rather than maintaining a sufficient enough number of its own employees to do the same work in the country where the company is already based” ("Outsourcing"). The first practice of outsourcing was in medieval times when “nation-states called in soldiers-for-hire to help their own military forces during ongoing conflicts” ("Outsourcing"). Many think of outsourcing as a one way trade of production facilities moving outside of a companies locale but in actuality it is a two way trade that also involves companies from other areas moving their factories to local areas where conditions are beneficial for the specific business. Outsourcing has evolved but the main idea has remained the same. The recent increase in outsourcing “was initiated by Wall Street pressures on corporations . . . . for increased profits . . . in the production of goods and services marketed in the U.S."(Roberts).
There are many benefits to outsourcing, many reasons that company has to outsource some of its business. According to Robin Gareiss, “The No. 1 reason companies turn to outsourcers is to save money--64% say that’s the main goal of their outsourcing contracts” (3). Companies are able to save money because they outsource to another country, and the third party that is in the outsourcing contract, runs the business in that country and is able to pay wages in accordance with that country’s laws, which for the most part there are none. The business usually outsources to a developing nation, and as a result can pay much, much lower wages than if it were to stay within the US. This cost-saving idea has become a much strong reason for outsourcing since the economy has been in a recession, a...
Outsourcing has become a very popular issue, and it has reached an all-time climax. Firms are starting to do this a lot more than than in the previous decade. What is outsourcing? Outsourcing is defined as “The procuring of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs.” And it has become a big issue in our country. There are thousands of articles and books written on it, and you can attend numerous classes and speeches on the subject. The use of outsourcing is quite simple really… Either pay an American worker $15 an hour, or pay someone in India to do the same job for $2 an hour. There are lots of other advantages and disadvantages to outsourcing but I will address those later in the essay. So what does an average American really know about outsourcing? Most people would say sending our jobs to another country in order to save money isn’t justified. It would cost a lot of people jobs, which would send them into distress and possibly debt. But that’s not the whole story behind outsourcing. People hear about outsourcing and automatically decide that it is bad for our economy. What about the good things that outsourcing brings to our economy? We are sending jobs to India, their consumers will start making more money, and in return buy more of our goods and services. In this essay I will show you both points of the debate and you can decide for yourself whether or not outsourcing is bad for our country.
The obvious pro of outsourcing is the lower cost of production and labor. Since some United States businesses are going overseas for products, the cost of that product is greatly reduced. In the United States the government monitors how much employees get paid, and the U.S has even set a minimum wage of $7.25 for one hour of labor. In other countries their economies aren 't monitored like this, so their
There are many reasons why company decide to do and there are many places where companies could go to take advantage of cheaper labor cost. For examples, China, India, Poland, or Romania. Offshore outsourcing is desired by numerous companies considering the premier facts like quality, access to resources and tools, time, cost etc.
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 (...
“The rights of every man are diminished when the rights of one man are threatened” (Kennedy, 1963). Continuous improvements in technology capabilities have provided companies with tools to more easily conduct business on a global scale. However, when conducting business with different cultures, you risk different ethical standards. Companies should be accountable for ensuring their product or services can be received by the consumer in good conscience, void of human ethics violations, regardless of where the product or service originates; and consumers should not patronize companies that cannot ensure this trust.
Whilst there are clear risks involved with outsourcing, it remains rather simple to see why more and more companies are attracted to this current business model. Cost saving, and lots of it! Comedian Woody Allen once so eloquently said, "Money is better than poverty, if only for financial reasons". It seems that the owners of big businesses today have taken that message to heart. They only care for their business and not their nation or fellow countrymen.
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).
The practice of outsourcing jobs is not a new concept. People have been outsourcing jobs for decades. Some people even offshore outsource jobs. There are many opinions to offshore outsourcing based on how it influences the economy. Some people are in favor of outsourcing jobs and some people are against outsourcing jobs. People need to get educated about the great impacts that offshore outsourcing does to an economy. The global economy has started to thrive and offshore outsourcing has profited the consumers as companies want to cut costs and competition, which is why I support offshore outsourcing jobs to foreign countries.