...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, but there can be unexpected costs as well. While it can be both a benefit to a customer it can also be a reason to avoid doing business with a company due to it. The decision to outsource is certainly not one that any organization should enter into lightly. There are many reasons to consider outsourcing to foreign countries. A few of the most significant advantages of outsourcing include the most well-known reason to consider outsourcing is to access cheaper labor. Workers in developing countries are paid far less than workers in developed countries due to the lower cost of living. Often these workers are not unionized as well, which further helps with cost cutting. At the same time outsourcing U.S. jobs to a foreign country can create a detrimental blow to the reputation of a company. In 2002 when T-Mobile was established the television spokesperson was Catherine Zeta Jones, a very classy and beautiful actress. Customer service call centers were based in the United States and there was never an issue that could not be...
Words: 1277 - Pages: 6
...Outsourcing – A Global Challenge MBA-700 International Economics Abstract The choice to outsource is a major strategic decision not made lightly by companies in today’s global marketplace. Though it brings probable results of cost reduction, loss of control in your product or the quality of service rendered makes this a decision that should not be taken lightly. Though a concept decades old, outsourcing is a topic that brings out fervor in individuals fighting for or against it. It’s a debate centered on moral, economical, and political aspects, with feelings that intensify during economic downturns because of the This paper will discuss theories of outsourcing, while comparing and contrasting the disadvantages and advantages (SWOT Analysis – see Appendix 1) of a concept that is growing in global business. The paper will conclude, most importantly, with discussions on three outsourcing alternatives and their potential to re-invent the status quo. Introduction The advent of globalization has proven that outsourcing is not a hypothetical situation; it is a major strategic business decision growing in popularity that our American workforce must now face in the decline of our U.S. economy. Some believe that outsourcing has become a serious issue not only for our workforce, but also in our major corporations, and the political arena. Issues such as the security of our nation have become debate topics, with critics arguing that outsourcing has weakened national security...
Words: 4072 - Pages: 17
...Outsourcing Running a business requires many decisions to be made, one decision is whether a company should perform work internally or outsource job duties. Outsourcing is the technique used by companies to reduce cost by transferring portions of work to third party suppliers as opposed to performing the job internally. Outsourcing can be very beneficial in reducing cost, but there are also issues that surround outsourcing in general. In order to understand the benefits of outsourcing, one needs to fully comprehend the issues involved with outsourcing, the benefits that a company may experience from outsourcing, how to truly determine whether outsourcing a specific job is necessary or beneficial, and how outsourcing is relevant in today’s workplace. First, it is important to understand what outsourcing is. According to Robert Handfield (2006), outsourcing, which became a formally indentified business strategy in 1989, can be defined as “the strategic use of outside resources to perform activities traditionally handled by internal staff and resources” (para. 5). Outsourcing, sometimes referred to as facilities management, is the strategy that involves an organization to contract out certain aspects of a business to both specialized and efficient service providers. Handfield (2006 points out that subcontracting and outsourcing, although similar in nature, are different because outsourcing “involves substantial restructuring of particular business activities including, often,...
Words: 1711 - Pages: 7
...Outsourcing Yet Another Service: IT Ryan S. Pavlak BRIT (R)(MR) Independence University Outsourcing Yet Another Service: IT In the world today saving the ever so precious dollar bill is the most important thing to almost every business. The outsourcing if information technology services is just another way for a company to potentially save money. Information technology services is not the first service to be outsourced and it is surely not the last. The reason it seems so beneficial is typically because of how mismanaged the internal information technology services, like what was taught earlier in this course. But is it really beneficial to outsource information technology services and who are really outsourcing their information technology services? The cons along with other pertinent information about information technology outsourcing will be discussed further. Who is outsourcing As technology has advanced over the past few decades the age of the internet and information has blossomed. With this developing industry came the need for a service to keep it up and running smoothly, that’s where an information technologist specialist comes into play. This can include any organization from a hospital to a flower shop, if the organization uses technology the need to service those serves will be there. So who is actually outsourcing this service? An article written in the Journal of Accountancy explains that large companies are outsourcing their information technology services...
Words: 1003 - Pages: 5
...The Trend of Outsourcing Jobs Did the major companies in America not think of global competition as they started to expand their operations and increase the salaries of the workers? Why is it such a hot topic now, why didn't this act of outsourcing start long ago? What effect does outsourcing have on the American economy, will we be able to stop this trend, and if so what will be the effect. In this paper I will be looking at and discussing why companies are outsourcing the jobs overseas. What benefits that companies are getting out of it, and the problems that face management, as outsourcing seems to be the trend of big business. INTRODUCTION Outsourcing is the delegation of tasks or jobs from internal production to an external entity (such as a subcontractor). Most recently, it has come to mean the elimination of native staff to staff overseas, where salaries are markedly lower. There has to be a reason that companies are going to outsourcing rather than hiring people within their own country. The bottom line, the single thing that drives every company in the world. What ever can increase the bottom line you can expect that companies will do everything possible to reach higher profits. Living in Michigan almost my whole life, and being feed from the hand of General Motors outsourcing hits close to home. I feel that the one thing that has increased outsourcing is the results of the union. Back in the time when the union started I believe what they were doing was something...
Words: 3275 - Pages: 14
...Introduction Before any company starts outsourcing any part of a company it should be investigated and analyzed thoroughly in order to achieve maximum success. The decision to outsource a part of a company should not be taken lightly but rather seriously. There are many advantages to outsourcing, however, with that some disadvantages come in as well. The following information in regards to advantages and disadvantages was taken out of articles about IT offshore outsourcing. Advantages There are many good reasons to consider outsourcing. Some are listed below. Cheaper Labor – workers in developing countries are paid less Cut Operating Costs – the outsourced work has to be paid for, but this payment is also cheaper than having your company performed the operation itself. Lower Labor Training Costs – training new employees is expensive. Each employee might need one to three weeks of training and that is expensive. When the customer service or IT department is outsourced the training is cheaper. Increase Productivity – Your Company can have employees working on site 24 hours a day. It becomes harder to attract talented employees to work less desirable shifts, however with outsourcing your company can provide service 24 hours a day, with workers around the globe operating in the best shifts available. Focus on Core Business – the outsourcing of the IT department can leave some space for other important departments within the organization. Disadvantages As discussed above...
Words: 635 - Pages: 3
...Outsourcing Information Technology services is when a company hires the services of another company and/or individual to perform the work that would have been performed by that company’s employee or employees. The usual information technology services companies outsource are website design and maintenance, help desk services, and application development and software maintenance. Outsourcing is done to save the company money, improve quality, share knowledge, and the flexibility of utilizing the company’s resources for other activities. With how much technology and software has improved throughout the years with the help of information technology, things that were once done manually are now done by operating systems. With these information technology systems companies are able to receive up to date information constantly throughout the day, in turn this keeps the companies running more efficient. Outsourcing information technology services allows companies to customize products and services based on the company’s requirement, access to the latest technology and updates, less risk of errors and higher quality services. Outsourcing information technology services has a few advantages such as: 1) Cost effective - Information technology outsourcing can cost the companies less than what it would cost them if they were to do all the work on their own time and effort. Information technology systems help a company be aware of everything going on minute by minute, which in turn...
Words: 623 - Pages: 3
...Timmy Throntveit Organizational Theory September 21, 2014 Research Paper: Outsourcing Outsourcing is the practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally (Investopedia). Why do many organizations outsource their business overseas to countries like China or India? Outsourcing is an effective cost-saving technique when used properly. Outsourcing is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce their products internally. China and India are the fastest growing economies around. The most obvious reason is the reduced costs. Wages for skilled workers are lower in developing countries such as China or India. The outsourcing of American jobs has become one of the biggest topics in the United States. The country's working class faces pressures which they have not experienced since the Great Depression of the 1930s (Magdoff, Foster). Outsourcing continues to have several different opinions from many individuals. On one side of the topic, many are in support due to the low cost for companies. The main reason is outsourcing boosts the United States economy. On the opposing side, many are opposed to outsourcing because of the reduction of jobs in the United States and a variety of other factors. The focus on outsourcing has led to many companies being shipped to foreign countries like China and India. With the rise of technologies...
Words: 2329 - Pages: 10
...Hire A Literature Review The study investigates the evolution, pros and cons of outsourcing as business function. Many researchers have identified various reasons to outsource an activity following a set process. The review proposed a well defined integrated outsourcing process model for effective outsourcing. Using an example of a global company this study detailed the benefits of externalization process and concluded that outsourcing is successful if activity selected is correct. Hire OUT-Sourcing 2 Global Procurement (BMO 5307) Assignment 1 Hire OUT -Sourcing A Literature Review Hire OUT-Sourcing 3 Contents Introduction ............................................................................................................................ 4 United Technology Corp. (UTC) ................................................................................................... 5 Rise of an Era - History & Evolution ......................................................................................... 5 Why Outsourcing? ................................................................................................................... 5 Procurement Outsourcing & UTC................................................................................................ 6 Where To Begin? ..................................................................................................................... 7 What UTC Was Willing To Achieve? .................
Words: 5031 - Pages: 21
...Does Outsourcing Save Money COM/156 October 7, 2006 Jacqueline Lance In this day and age, we wonder why major companies outsource and whether they are really saving money. A website named investors.com said, “More than 1.3 million additional Western jobs will vanish by 2014 due to outsourcing”. Outsourcing to foreign countries can help save larger companies money, by reducing cost and increasing revenue. Companies are finding more ways to save money and increase productivity. Outsourcing might not look like the best decision to consumers in reality it is the best choice for a business. Even though a lot of American workers are out of work, there are still several benefits to outsourcing. The main benefit to outsourcing for most companies is saving money. In this current economy it is hard to save money in America with the cost of just about everything increasing daily. Companies have no other choice but to outsource, or they might have to close down. In order to keep up with consumer demands, major companies are outsourcing to foreign countries, were they are able to get tax breaks and cost reduction on materials. With the cost savings that the companies receive they are able to produce a better product. There are several things that must be completed prior to determining if out sourcing is the best option for your business. Outsourcing in foreign countries is becoming the new way for companies to save money. Before a...
Words: 1563 - Pages: 7
...Abstract The report is an analysis of the various benefits of outsourcing against the disadvantages associated with it. It highlights the benefits and clears the misconceptions that are associated with it. Outsourcing According to C.W. Axelrod, Outsourcing is, “the provision of certain goods or services by third party specialists in direct/ indirect exchange for money” (Axelrod 2004, pg 1). It means hiring specialist organizations which may be located overseas to carry out some of the activities of the business in return for money. The outsourcing industry started in the 1980’s in India when few airlines began their back-office operations; and since then, there’s been no looking back. Today this industry is synonymous with ‘sunshine industry’ or ‘youth oriented industry’. Its constantly increasing importance can be gauged from the fact that the government is planning a separate ministry to look into the affairs of this sector. Outsourcing: The Need of today The government’s decision to have a separate ministry for this industry, itself speaks volume about the vitality of this sector. This industry has truly proved to be a beacon of hope for professionals who are unable to find a full time job and at the same time it has also helped the young graduates gain experience and business skills before embarking on a full- fledged career. A major reason supporting outsourcing is the significant savings of costs, specifically on labor which on usual basis represent 60-100 percent...
Words: 881 - Pages: 4
...historical development of outsourcing: the latest fad? Chris Lonsdale University of Birmingham, Birmingham, UK Andrew Cox University of Birmingham, Birmingham, UK Few management practices have attracted as much attention as outsourcing is enjoying at the present time. That firms should aggressively adopt the practice is almost becoming a given, and consultants' Abstract presentations talk of a ``revolution in Notes that outsourcing is just one outsourcing''. The academic literature on the of the means by which the subject has grown in kind. boundary of the firm can be What is often lost in the hype surrounding adjusted. Considers various other means such as conglomeration the concept, however, is that outsourcing is and horizontal and vertical just one way in which the boundary of the integration. Focuses on firm can be adjusted in response to changing outsourcing and its place in this economic pressures. Indeed, any history of bigger picture and discusses the history of outsourcing. Outlines the concept should recognise this, as the concerns for managers and gives recent trends in its favour have very much case examples from Rank Zerox been set in the context of a general movement and BP. towards more ``focused'' business strategies. This article investigating the development of outsourcing is in three main sections. First, it sets outsourcing in the wider context of the boundary of the firm issue. Second, it then proceeds to discuss the history of outsourcing, and its place in...
Words: 5110 - Pages: 21
...Outsourcing of outsourcing the IT function Introduction Outsourcing is contracting with another company or person to do a particular function, (Schaffhauser, 2005). Outsourcing of almost every department of a business is a real option for all businesses. In today’s world of business, most companies have an IT department; however, management may consider the option to outsource the IT function for various reasons to include increasing the bottomline. This paper will address the reasons to outsource in addition to the risks and rewards. Determining Factors in the Decision The first question that management must address is “Why outsource?” Outsourcing enables companies to reduce and control operating costs by eliminating costs related to talent acquisition. When a company hires an employee, they usually provide a benefit package that includes health insurance and vacation time. In addition, companies are responsible for for training, employment taxes and other related costs. And by outsourcing non-core business functions, more capital funds are freed up to spend on items that are directly related to its product or service. Outsourcing also enables companies to gain superior talent. Instead of just the knowledge of one person, the company would benefit from the combined experience of a team of IT professionals. Outsourced IT companies usually require their IT staff to have proper industry training and certifications as well. The cost of keeping up with technology is another...
Words: 716 - Pages: 3
...DECLARATION I Musubika Narigisi, declare that this Research report is my original work and has never been submitted to any university for examination, where other people’s work has been used, due acknowledgement has been made. Candidate signature............................................. Date................................................. Musubika Narigisi i APPROVAL This Research report complied by Musubika Narigisi has been under my supervision and guidance her work is now ready for submission. Signature................................................ Date.............................................................. MR SSAJJABBI VINCENT ii DEDICATION I dedicate this piece of work to my parents Mr. and Mrs. Kampere Ramadhan and the entire family not forgetting my friends who have helped me during this study I also dedicate it to my dear sister Mrs Lugoloobi Zahirah and her entire family for the great assistance they have given me during my stay at campus and through this study as well. I cannot forget to dedicate it to my sisters, Kampere Fahima, Kampere Madiha, Kampere Afraa and my brothers Kampere Hamuzah and Kampere Adiham. iii ACKNOWLEDGEMENT I wish to extend my sincere appreciation to my supervisor Mr. SSajjabbi Vincent for his guidance and technical advice during the study without him this study would not be a success. I must acknowledge the contribution of all my brothers and sisters plus my friends throughout my stay at the university...
Words: 5146 - Pages: 21
...Outsourcing: The Government, the People and the Companies Jeffrey W. Coleman Webster University Abstract Making a decision about whether or not to move these activities offshore is a decision of far-reaching consequences. Developing countries have been unable to radically alter their industrial structure due to numerous internal institutional and external technological barriers. Consequently, they have sought global participation through outsourcing activities. This is indeed a break from the traditional self-reliant way of doing business. Outsourcing arrangements are technologically and organizationally complex, and present a variety of challenges to manage effectively. Outsourcing benefits include cost savings, quality improvement, and the ability of the organization to concentrate time and resources on its core business. Outsourcing trends change from year to year, and usually involve changes such as progressive outsourcing, cloud sourcing, mergers between organizations from different parts of the world and protectionism. In this paper we will look at a few of these areas such as the how in recent years the business practice of outsourcing jobs has been considered both a blessing for American business and a concern for the American worker, the amount of outsourcing being done and why, the affect on the economy in the United States, and the role government plays in outsourcing. The paper concludes, however, that the trend is just beginning and how our country...
Words: 4404 - Pages: 18
