This website uses cookies to ensure you have the best experience. Learn more

Outsourcing Essay

1687 words - 7 pages

Offshore Outsourcing

In 1973, a monumental shift was prevailing where U.S. companies were sending low skilled jobs within the manufacturing industry to offshore countries to reduce labor cost while maximizing profits. Outsourcing a variety of American jobs overseas has become common practice during the last decade or so. American wages are higher than offshore wages, and it saves American companies money. The effects of outsourcing began to be noticed in a wide area, from customer service to job loss. Outsourcing overseas may save companies money, but in the end, it places them in a negative light and indicates their lack of interest in protecting and enhancing America and the ...view middle of the document...

For example, call center employees are displaced when jobs move to India, which effect the economic position of the country. They could lose their home, their car, or go bankrupt, which has an affect on the national and local economies as well. This might not affect the economy if it only touches a few workers, but the numbers indicate that hundreds of thousands are affected, and the numbers are rising. In the future, the workforce will be severely affected and social services such as unemployment, welfare, and medical services will be affected.

Many people look at offshoring jobs as a cost saving measure; however, these views may be easily refuted. As one expert notes, "For one thing, there are governance and management issues involved in offshoring. Implementing both process and procedural controls as well as compliance controls costs money, which takes away from the savings of the cheaper labor markets seen overseas" ("Globalthink"). Set-up costs can be major in some industries such as call centers and training can be extremely costly. So can maintaining quality and security at offshore sites. For example, one company who processed credit cards in Juarez, Mexico found it had additional costs in auditing, regulation, and security in the Mexican location in order to ensure customer privacy and credit card security ("Regulators").

There is another cost to companies' offshoring, and that is the company's reputation. Offshore call centers have continuously come under fire from offshoring critics because of the level of service they sometimes provide. Consumers speak of difficulty understanding some call center employees, of not receiving high-quality service and even being disconnected if the employee cannot solve the problem. This gives companies engaging offshore call centers a bad customer service reputation, and some consumers will avoid purchasing products and services, if they know overseas workers operates the company call centers. In addition, the quality of some foreign-produced products has come under fire from consumers, leading to distrust of some brands that rely heavily on offshore production.

Offshore outsourcing is also extremely controversial because of the very reason companies choose to outsource – low wages. The Nike Corporation is just one company that has come under fire for paying oversees workers incredibly low wages that do not allow them to escape poverty or better their economic situation. Two authors write, "According to the Nike Corporation, the advantage of locating in Indonesia is that a pair of shoes selling for $80 in the United States will involve direct labor costs in Indonesia of only $2.60. Although subcontractors sell their services to companies like Nike, they are pressured to pay a minimum wage of $52.50 per month." (Cypher, and Dietz 409). This is not an isolated case; the same type of low wage work has been chronicle around the world, as U.S. companies attempt to reap...

Other Essays Like Outsourcing

Outsourcing Essay

1108 words - 5 pages Outsourcing BUS 630 Jessica Ankney Professor Havens November 19, 2012 Introduction Outsourcing is seen in many different business areas in today’s market and can range from outsourcing personnel or entire projects. When determining if outsourcing is the right decision for an organization, costs and revenues must be analyzed to make an informed and smart decision. Should this step be overlooked, the organization could make a costly mistake by

Outsourcing Essay

3957 words - 16 pages CQUniversity Australia | [Type the document title] | [Type the document subtitle] | | Sandeep Rauniyar | [Pick the date] | [Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.] | Contents 1. Definition of outsourcing 3 2. Functions outsourced by HR


2433 words - 10 pages Abstract This paper discussed and explained outsourcing, identified effective techniques and methods, and why outsourcing is utilized. Outsourcing can be an effective method for improving an organization’s functionality. While outsourcing advantages can reap benefits of improved productivity and lowered costs, the disadvantages must be taken in consideration to reach success. Analyzing the different aspects of: why is outsourcing necessary

Outsourcing - 572 words

572 words - 3 pages facilities to outside from countries (mostly in developing countries) which is called offshoring. (Wiener, Vogel, & Amberg, 2010) But long distance supervision is difficult for any company to operate; it increased demand for low wage labors internationally. This lead to new and more recent aspect called Outsourcing. Outsourcing: There are four powerful factors which influenced economic operation. These factors are demand, supply, interaction of

Outsourcing - 2111 words

2111 words - 9 pages The Sourcing/Purchasing Design Matrix Strategic Sourcing Continued • A request for proposal (RFP) is used for purchasing items that are more complex or expensive and where there may be a number of potential vendors • Vendor managed inventory: when a customer actually allows the supplier to manage an item or group of items for them What is Outsourcing? • Outsourcing: the act of moving a firm’s internal activities and decision

Offshore Outsourcing

1731 words - 7 pages Abstract This paper will discuss offshore outsourcing and the effects it has on the American worker in a technology environment. We begin with the scope of the problem and how it has changed the economy for better and for worst. Various figures representing miscellaneous data about off shoring will be represented. The topics include the background and nature of offshore outsourcing, reasons for outsourcing, why trading promotes gain

Outsourcing Characteristics

1459 words - 6 pages Running head: Outsourcing Characteristics Outsourcing Characteristics Name CMGT 578 23 September 2013 Professor Scott Goodman Outsourcing Characteristics In this paper, the Outsourcing features will be talked about in great deal and the features will consist of what are the influential aspects in a company determining to outsource. One reason that most companies select to outsource is that they have

Outsourcing Jobs

1053 words - 5 pages Outsourcing Jobs from America: A Large Cause of Discontent They are seen everyday, long lines of men and women standing in the unemployment lines. These same long lines are lining the walls at the welfare offices. What is causing this epidemic in our country? Our nation’s corporations are continuously making a negative impact on American families by outsourcing its jobs to countries overseas. What is outsourcing? Outsourcing occurs when a

Boeing Outsourcing

2064 words - 9 pages A Dream Interrupted at Boeing By Christopher Drew, New York Times News Service Sure, outsourcing converts fixed costs into variable costs, as sound theory suggest. The question is: how much is too much? Did Boeing get it right with the Dreamliner? [pic] In Boeing’s cavernous plant here, temporary scaffolding rises alongside several of the first 787 Dreamliners ever to be built. Workers climb steel steps to slip everything from wiring

Outsourcing - 1313 words

1313 words - 6 pages What a manager does and how it is done can be categorized by Henri Fayol's four functions of management: Planning, Organizing, Leading and Controlling. Through these functions managers can be catalysts for change or by definition change agents. Weather performing the role of the change agent or not, change is an integral part of a manager's job. Change is an alteration in people, structure or technology. Change occurs within and around

Outsourcing - 1347 words

1347 words - 6 pages Automating a Support System Needs Document An organization should have an established system to facilitate improvement in the efficiency of their company. Whether the improvement is in the marketing department, human resources department, accounting department, or any other department, the process of building a support system is of utmost importance. Kudler Fine Foods (KFF) is a food service company that started in San Diego and currently

Related Papers

Outsourcing Essay 665 Words

665 words - 3 pages Outsourcing - What is Outsourcing? Bookmark This Page Bookmark This Page Email This Page Email This Page Format for Printing Format for Printing Submit an Article Submit an Article Outsourcing Article Archive Read More Articles Related Tools & Articles What is Offshoring? How to Respond to an Outsourcing Challenge A Crash Course in Outsourcing Outsourcing Quick Poll Are you currently outsourcing a process

Outsourcing Essay 1296 Words

1296 words - 6 pages Outsourcing is an important part of Globalization. The choice to outsource U.S. jobs should be taken into great consideration as there are many segments into which it effects greatly. Also, outsourcing is a great option for a company who needs a certain project completed who do not have the man power or the money to hire a new employee, companies can outsource based on projects in the U.S.A. or abroad. Often outsourcing is a way to save money

Outsourcing Essay 2739 Words

2739 words - 11 pages TITLE OUTSOURCING TABLE OF CONTENTS TABLES OF CONTENTS 2 EXECUTIVE SUMMARY 3 CHAPTER1. Introduction-Outsourcing 1.1 What is Outsourcing? 4 1.2 History of Outsourcing 4 1.2.1 Outsourcing in Indonesia 4 CHAPTER2. Money Today 2.1 The Types of Outsourcing 5 2.1.1 BPO (Business Processing

Outsourcing Essay 2082 Words

2082 words - 9 pages INDEX 1 Outsourcing industry Objective Introduction Importance of outsourcing Classification of outsourcing industry Advantages of outsourcing Disadvantages of outsourcing 2 WIPRO BPO Comparative sheet of wipro Ratio analysis of wipro 3 INFOSYS BPO Ratio analysis of infosys Comparative sheets of infosys 4 GAPS OUTSOURCING INDUSTRY OBJECTIVE The objective of this report is to focus on the outsourcing