...Abstract This paper will discuss what outsourcing is about and the impact of outsourcing information technology to China. It will take a look at the benefits, challenges and risks faced when a company makes the decision to outsource their information technology functions to China. As globalization accelerates and competition intensifies, outsourcing has become a strategic solution for many corporations and governments around the world. More companies are outsourcing their goods and services to other countries. It has become a way for many companies to gain cost savings, increase productivity by outsourcing their information technology goods and services. Outsourcing of information technology services is one area that companies are taking more and more advantage of. Companies that outsource see increase productivity and quality improvement in their information technology services. China is starting to make advancements in their information technology outsourcing services, in the goal of one day being the number leader in this outsourcing area. Outsourcing Information Technology to China The world of outsourcing continues to grow with different goods and services being sent to other countries. Outsourcing of goods and services has been around for some time now. According to Patterson, Gott & King (2011), “IT and BPO offshoring are early manifestations of a larger trend that, in the long run, means that more functions can and will be located outside the countries...
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...Running head: OUTSOURCING TO MEXICO OR CHINA Outsourcing to Mexico or China Kimberly Griswold Southern New Hampshire University Many companies decide to outsource to save on costs. China is one of the most popular countries to use for outsourcing. The outsourcing in China has helped China and the businesses. The lower cost of outsourcing to China has helped many companies obtain a competitive advantage. More companies are now looking to outsource in other countries. Another county that is getting a lot of attention is Mexico. There are advantages and disadvantages to both China and Mexico. There are many advantages to outsourcing in China. The first advantage is experience, China has been used my many companies for an extended amount of time so they already have standards in place. Another advantage is China has extreme inexpensive labor. The employees in China are also educated and learn fast and work very hard. “Through-put is clearly better in China than in Mexico. Attendance, punctuality, and productivity bonuses are not needed” (Amter, 2011). Many retailers are also now growing “less dependent on brand names in part because they, and their suppliers, demand and receive good value from Chinese suppliers” (Advantages of Outsourcing in China, n.d.). There are also disadvantages to outsourcing in China. China is a communist government and is very prone to piracy and counterfeiting. There...
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...Outsourcing : Outsourcing is the process of contracting with another company or person to do a particular service/job. Compared to 1998, in 2005 manufacturing employment was 19 percent lower in The United States, even though manufacturing output was 10 percent higher . The drop in manufacturing employment coincided with an increase in outsourcing to domestic contractors, including staffing services and an increase in outsourcing of materials and services inputs to foreign companies or affiliates which is also known as offshoring. A number of companies had recently signed or were expected to sign billion-dollar outsourcing deals. Topping the list were Xerox Corp. with a $4 billion plus outsourcing deal, and McDonnell Douglas and General Dynamics,with $3 billion deals. Advantage of Outsourcing to Other Countries : China Over the years China has become the choice of destination for manufacturing and supply chain outsourcing and material supply for many organization in America, Europe and Asia. Companies continue to receive several key benefits when outsourcing current business processes to China, such as: Gowth in Economy - China is the fastest-growing major economy in the world, and has had the fastest growing major economy for the past 30 years with an average annual GDP growth rate over 10%. Cost: The main reason U.S. businesses give for outsourcing is to remain competitive by cutting costs, especially wages. With China’s population well over one billion, the...
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...INTRODUCTION Information Technology (IT) outsourcing is the contracting out of part or all of an organization's IT activities (Duarte & Snyder, 2006). Global Tech Corporation is an Information Technology (IT) outsourcing firm that provides help desk and customer support functions. Global Tech specializes in taking the work that other companies do not have the resources to complete on their own and helps them to get the jobs completed. Product deliverables include software consulting, website design and maintenance, e-mail servers, help desk and customer support functions. The company is headquartered in the United States, and has four branch offices in China, India, Philippines and Ireland. In order for Global Tech Corporation to function profitably all over the world the company must learn what the cultural barriers are in each country they have an office located, what leadership barriers there are and what leadership styles would work best in each country. The following will discuss how Global Tech has overcome cultural barriers, the organizational makeup, leadership styles, and production of the corporation. ORGANIZATIONAL DESCRIPTON When entering the corporate world in the 21st century it is important to realize that we are at an incredibly turbulent part in history. The world is experiencing natural disasters, wars, terrorism, approaching limits on natural resources. It is not an easy time to enter the global landscape and try to be a competitive company; however...
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...We should to first know outsourcing Definition: The practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual (encyclopedia, 2012) in business. Outsourcing is a practice which involves transferring parts of a company’s business processes to outside suppliers rather than completing it internally (Investopedia, 2013). It is the process of subcontracting a process, such as product design or manufacturing to a third party company (Venture Outsourcing, 2013). Outsourcing could be sub-divided into two which is off-shoring and home-shoring (home sourcing). Off shoring is moving business processes overseas in order to leverage opportunities such as cheap labour expenses, entrance into new markets, skilled labour and availability of resources (Sourcing Mag, 2003). Home shoring (home sourcing) on the other hand, is “the transfer of business processes to companies within the same country” (Brunelli, 2013). The form of outsourcing to be analysed in this report is off shoring because it is one of the effects of Globalization. Outsourcing became popular in the United states as at 1980s when critics began to raise eyebrows about it as they felt multi-national corporations (MNCs) where exporting a large portion of American jobs to other countries (handfield, 2006). Some MNCs that were popularly known and criticized for outsourcing were Boeing, AT&T, Coca-Cola...
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... Group Written Assignment 1 Global Trends: Manufacturing and Outsourcing Over the past decades various businesses across the globe have made shifts in the way manufacturing is handled in their companies. Some have outsourced the full scope of their manufacturing. While others have done partial outsourcing, where partial assembly is returned to the US industry. When manufacturing is outsourced, whether for goods or services, many companies downsize their work force. This creates a loss of jobs for the American industries while increasing jobs in places such as China, India and Indonesia, just to mention a few. Outsourcing, undoubtedly has its comparative advantages as far as having lower wages but it also has risks such as rising costs and trade barriers. It is some of these challenges that is believed to have created a slow re-routing of manufacturing to return to the US Industry. The global trend in manufacturing and outsourcing is that many countries rely heavily on China and other developing nations for manufacturing. For this reason many countries outsource their manufacturing to China. In the article, “The end of cheap China,” the writer reminds us that, “China is the world’s largest manufacturing power and they account for a fifth of global manufacturing.” The primary reason for this trend is due to the cheap labor. It should be noted that global manufacturing is also advantageous to China and other developing nations, since it facilitates economic freedom...
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...benefits to Apple of outsourcing the assembly of the iPhone to foreign countries, and particularly China? What are the potential costs and risks to China? The benefits to Apple of outsourcing to foreign countries is that labor costs are sometimes lower there, especially in China. Moreover, Chinese subcontractors are able to respond very quickly to requests from Apple and it is much easier to hire engineers over there than in the United States. Besides, many factories in China provide components for the iPhone, that is near, which takes fewer time. On the other hand a potential risk for Apple could be that the subcontractors could use the information they have about the parts they make for Apple. They could sell the information or the parts to other companies. Another thing is that in China the working conditions are poor, they could be charged for that later. Moreover, they have to pay more, because of shipping the parts from all over the world to China. 2. In addition to Apple, who else benefits from Apple’s decision to outsource assembly to China? Who are the potential losers here? The employers and employees of the hired factories in China benefit from Apple’s decision to outsource, because now more jobs are available for them. The potential losers here are people in the United States, because they lose jobs because Apple is outsourcing to China. 3. What are the potential ethical problems associated with outsourcing assembly jobs to Foxconn in China? How might Apple...
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...1.) OUTSOURCING JOBS AND ITS IMPACTS Outsourcing jobs from developed countries to undeveloped or developing countries is on the rise. Outsourcing is a very controversial topic and its impacts are large, varying from business to business. Logistics management, software development to design everything these days is being outsourced to countries like India, China mainly due to cheap labor and cost cutting being the prime reasons behind it. Outsourcing however as it may seem as a loss of opportunities in the countries outsourcing the jobs, it is incredibly beneficial to the countries the jobs are outsourced to. The positive impact of outsourcing outweighs the negative impacts of it. How is it positive and why is it necessary? In...
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...Mattel’s Motivations for Outsourcing Companies outsource for a variety of reasons. Most companies primarily outsource manufacturing, labor-intensive jobs to companies located in developing countries at a lower cost. If quality level is maintained, outsourcing can be a great value-added strategy. Through outsourcing, companies can achieve flexibility and are able to focus on their main business. Outsourcing may also enable companies to have access to resources and technology, which may be not have been available locally. Furthermore, expertise in risk management, financial management, and other fields can be contracted through outsourcing. As far as Mattel is concerned, the key motivation for outsourcing is to have access to cheap labor, reducing manufacturing cost significantly. Causes of Mattel’s Recall Problem There are three main causes for Mattel’s toy recall: manufacturing problems which refers to the use of lead paint by Chinese manufacturers; design problem as a result of increasing use of small, powerful magnets that have the risk to be swallowed by children if detached, and; product misuse by young creative children which may cause potential danger to them. Among those three reasons, only manufacturing problems are potentially the result of outsourcing. The design and product misuse issues were not the responsibility of contract manufacturers. Outsourcing Pitfalls While outsourcing can reduce costs for companies, it can also give rise to a series of problems if...
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...Another thing is that in China the working conditions are poor, they could be charged for that later. Moreover, they have to pay more, because of shipping the parts from all over the world to China. 2. In addition to Apple, who else benefits from Apple’s decision to outsource assembly to China? Who are the potential losers here? The employers and employees of the hired factories in China benefit from Apple’s decision to outsource, because now more jobs are available for them. The potential losers here are people in the United States, because they lose jobs because Apple is outsourcing to China. 3. What are the potential ethical problems associated with outsourcing assembly jobs to Foxconn in China? How might Apple deal with these? One of the biggest ethical problems associated with outsourcing assembly to Foxconn is that the employees have been targeted for their poor working conditions. This is of course an ethical problem, because Apple knows about the working conditions, but has not done anything about it yet. Apple might consider to talk to the executives of the firm, to create better working conditions for the employees. They could say that if they will nog create better working conditions that they have to produce their parts of the iPhone somewhere else. 4. On balance, do you think that the kind of outsourcing undertaken by Apple is a good thing or a bad thing for the American economy? Explain your reasoning? I do not think that outsourcing undertaken by Apple is a good...
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...coffee and vegetables directly from other countries and outsourcing process to other countries. Although it is possible for one country to produce all goods efficiently, it will be more productive for this country to trade with other country. Both countries can benefit from trade because each country specializes in what they have a comparative advantage. Free trade offers more advantages to each country since there are no trade barriers between countries. Nowadays, with the trends of globalization, free trade is becoming more and more commonplace. Some people argue that free trade creates job opportunities while increasing the growth of economy. Riley (2012) states that total U.S. employment significantly increased after the U.S. signed the North American Free Trade Agreement (NAFTA) and joined the World Trade Organization (WTO). However, opponents focus on the negative impact which is job losses inside the country. Column (2011) points out that it cost 2.8 million jobs for trade between the U.S. and China. Trade deficit between countries and outsourcing during free trade lead to job losses eventually. Therefore, with the integration of global economy, the impact of free trade on job opportunities has become increasingly severe for countries to consider. Signing free trade agreements between the United States and other countries have cost considerable U.S. job opportunities. The loss is mainly due to outsourcing. Outsourcing means that more and more companies prefer distribute...
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...Introduction Off-shoring and outsourcing have become especially prevalent in recent years due to the shift in foreign labour markets becoming more competitive, and even favourable in some sectors. It should be noted that domestic examples of outsourcing do not shift the labour market because within the country itself, there are no structural changes. As a result, this paper will focus on outlining the various off-shoring and outsourcing implications and effects on international labour markets. Outsourcing vs. Off-shoring Companies have been able to implement off-shoring and outsourcing because of the phenomenon of lower transportation costs and instant communication across barriers of the world. Outsourcing and off-shoring are often grouped together and defined similarly, however they can be understood and interpreted in many ways. Outsourcing is a division of labour by contracting foreign third-parties abroad. In comparison, off-shoring is a more extreme form of outsourcing. It instead relocates key production sectors abroad, but not core innovative activities. Companies will often setup their own facilities which results in a decrease in foreign unemployment. Specific examples related to off-shoring and outsourcing will be discussed throughout the paper. In a wider spectrum, firms use off-shoring and outsourcing to remain competitive with the ongoing globalization that is present. Both countries involved are able to raise their nation’s GDP by shifting labour...
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...------------------------------------------------- Apple IPhone ------------------------------------------------- Table of contain Introduction I. History and product line II. Some figures III. Apple as part of the Globalization process A. Benefits of outsourcing B. Inconvenient C. Final consequences on the American Economy Conclusion Reference ------------------------------------------------- Introduction Apple Inc. is an American high-tech multinational corporation engaged in researching, designing and producing electronic technology products. Apple Inc. is popular for its unique innovation and mind-boggling development rate. The products include the Mac line of computers, the Apple TV device, the iPhone smartphone, the iPod music player, the iPad tablet and the iWatch smartwatch. In addition, Apple Inc. has developed over 850,000 kinds of unique App software. In recent years, Apple has been a hot topic of concentration for people all over the world. It will be analyzed why and how Apple has become a successful media institution through analysis of the globalization and ideology of Apple. Furthermore, it will be discussed the situation of Apple in China. I. History and product line Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976, to develop and sell personal computers. It was incorporated as Apple Computer, Inc. on January 3, 1977, and was renamed as Apple Inc. on January 9, 2007. ...
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...highlight that impacted a native non-western culture is the growth of outsourced IT and business outsourcing (BPO) services in Indian. The event has resulted in new and expanded employment opportunities for young college graduates. India has about half of the market share for business outsourcing. Before the event (the expansion of outsourcing) the new college graduate would have had a difficult time finding a job that pays as well as a typical BPO firm. (Kuruvilla & Ranganathan, 2007) Another example of globalization I would like to highlight is the growth of the western fast food business/restaurants into China. Before the event (growth of fast-food business/restaurants) the Chinese population was healthier and had limited options for eating out which included your typical Chinese restaurant, wontons sold on the side of the street and local food merchants. After the event (growth of fast food restaurants) the Chinese society/culture has had many changes, including obesity, change in types of food choices which in turn affected the Chinese overall health and economy (Cheng, T, 2003) Part B The growth of the fast food business/restaurants into China is a great example of globalization on a native non-Western culture. Fast food restaurants found that global business expansion would be a way to grow business and increase profits. Fast food was only introduced into China in 1987, with opening of the first KFC. They become successful overseas by adapting to the local...
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... What are the benefits to Apple of outsourcing the assembly of the iPhone to foreign countries, and particularly China? What are the potential cost and risk to apple? - The benefits to Apple of outsourcing the assembly of the iPhone to foreign countries particularly targeting China is that the labor cost and cost for production is much lower in China allowing them to mass produce their product, though that is not the main focus and that it’s a small factor of the total value of the product. Apple says that one of the most important things for their business is the ability for Chinese contractors to respond quickly to request from their business to scale production. Steve jobs was an innovator and always looked to the most advanced technology to reflect in his product. An advantage that Steve Jobs found when it came to China is that the factories in China were ahead of what was thought about as advance technology and what Steve Jobs thought would improve his products, China was already forward thinking and implementing this ideas. The factories where dedicated to maintaining a current working system to keep up with the demand and Apples production schedule. This allow Steve Jobs to quickly mass produce his ideas and products. With Apple being a huge company that involves a lot of dedication to keep the product up to date, having high employment rate for the company was also huge. It was easier and quicker to higher engineers to work in China. Stated in the Article “Apple calculated...
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