I think it is interesting to know the positive and negative arguments about outsourcing. On one hand, there is the current uproar about illegal immigrants swarming in to the U.S. to do the jobs that Americans don’t want to do. And on the other hand, there is the continuing outcry about jobs going overseas. This would be the outsourcing of jobs that Americans would be willing to accept if the corporations were not so adamant about improving their bottom line for their stockholders.
So, what is outsourcing and offshore outsourcing? By definition, “outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production ...view middle of the document...
S. economy is at a decline. Consumers are used to the fact that manufactured goods are produced overseas and imported to the United States, but now these consumers must accept the fact that these services are also being outsourced. I believe that more companies are beginning to try to outsource and offshore their labor and services in hopes to lower their operating costs. The morale of U.S. workers has been destroyed and a sense of fear has been injected into many American families.
The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of worldwide labor, capital, technology and resources. I would have to say that the most important reason for a company to outsource is to reduce operating costs and increase profits.
Some economists will argue that outsourcing is good for the economy, that it is just another form of free trade, which increases wealth in the economy (Otterman, 2004). The standard case for free trade holds that countries are best off when they focus on areas in which they have a comparative advantage, which is areas that have the lowest opportunity costs of production. This allows countries to specialize accordingly to increased productivity across all countries, in return transfers into cheaper goods, and a greater variety for all consumers (Drezner(2004 & May, June). For instance, some worldwide companies such as IBM, Microsoft, Novell, Oracle, AT&T, Fujitsu, Motorola, General Motor and Sears are keeping ahead of their competition by outsourcing to some of the best software companies in India(Drezner(2004 & May, June).
Another example of a company that outsources is DuPont, who was known as one of the most innovative American companies of the 20th century. DuPont now sells only less than a third of its products in the United States. “DuPont’s workforce reflects the shift in its growth: In a presentation on emerging markets, the company said its number of employees in the U.S. shrank by 9 percent between January 2005 and October 2009. In the same period, its workforce grew 54 percent in the Asia-Pacific countries” (Gogoi, 2010).
Although reducing operating costs and increasing profits sounds great, there are some disadvantages to outsourcing as well. An example might be not allowing management to fully monitor the activities of employees, primarily due to location. They are limiting their scope of observation based on their own efforts of managers assigned in the same remote location. Assessment of potential workers are limited, because management can only conduct online interviews or provide short tests to determine the efficiency of workers (Gislason, 2009).
Another disadvantage would be language barriers. When a function that needs handling of calls is outsourced to a foreign location and the first language is different from the nation which outsources the function,...