The Pros And Cons Of Outsourcing

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Outsourcing is obtaining goods or services from a foreign supplier in place of going in the country for these things. There are many debated effects of outsourcing on the economy, and there are several pros and cons to this practice. Even though there are many pros, the overall economy of America would be better off with minimal outsourcing. 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…show more content…
The quality of products sold are very low because they are made in mass production, and made as cheaply as possible in order to make more money. This has caused more and more people to become dissatisfied with the market today. In What 's Wrong With Outsourcing?, an eBook by Ernie Zibert, Zibert conducted a survey that posed the question “what 's wrong with outsourcing?” The results showed that over 50 percent of respondents replied that “low customer satisfaction” was the main issue with outsourcing.This means that the quality of the product or service they receive did not amount to the quality they wanted in this outsourcing deal. Zibert also analyzed the value of business transactions with corporations not in the United States. His conclusion was that over time “you have a 50% chance of not being happy with your outsourcing relationship.” Many outsourcing business relationships tend to end badly because of the financial risk involved with outsourcing; and the risk between the businesses American companies are being involved with. For an outsourcing partnership to work effectively one must have an in depth contract stating how each will do business. Without this the partnership has a high probability of…show more content…
Outsourcing provides products we may lack the resources to produce in America. We could buy technology that hasn 't been developed yet, or services our nation does not offer. But in excess outsourcing will cause more problems than benefits. In Michael Dennis Scott 's book Scott on Outsourcing: Law and Practice Dennis evaluates the trouble it takes to have a successful outsourcing contract. He points out that “the parties must continually work to ensure that the relationship continues in a mutually satisfactory manner” to be successful in the long term. For outsourcing to work both parties must be very flexible as unexpected circumstances are likely to emerge. When outsourcer relationships go wrong a huge number of problems could occur. One major risk is that there is a risk of losing confidential data to partner, this could hurt the business greatly and cause safety concerns for the company. Also the products may take much longer than anticipated to be produced and arrive since many outsourcers may have several partners. There also may be hidden legal problems and costs if the partnership contract isn 't reviewed in depth and conditions are left undefined. There is also the major risk of the other business going bankrupt, if this happens the financial loss to American companies could be out of
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