... Offshore Outsourcing: Reducing Cost, Sacrificing Quality Nick Blasetti AMBA 600 Ralph Masi May 12, 2015 Executive Summary Offshore outsourcing is a growing trend in today’s business world. Many large, fortune 500 companies are sending a majority of their low skilled jobs overseas to reduce labor costs. This process is leading to many negative impacts on consumers and workers. Consumers are now being put at greater risks and experiencing poorer service, while workers are losing their jobs and struggling to find new ones. Workers are also now forced to interact with many foreign employees. The language barrier between domestic and international employees hinders working relationships, and even decreases productivity. Many companies who initiate outsourcing have received negative reactions from employees and reductions in morale. Even with the very apparent negative impacts of outsourcing, companies are continuing to outsource more and more work. The reason: reductions in labor costs outweigh everything else. Companies may be sacrificing their integrity for increased profits, but with so many companies outsourcing, they really have no other choice. Their workers and consumers may be unhappy, but in order to remain competitive they must follow suit. Consumers and workers will be forced to adapt with the changing times by increasing their skills to avoid losing their jobs. Offshore outsourcing is not going anywhere, and...
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...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...
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...Shalone Brown Professor Carol Bruzzano English 101 30 September 2013 Outsourcing “Our great history has been that people came to Michigan because you didn’t have to have a college degree to get a good paying job. Consequently, we have got a larger number of our population that right now are facing outsourcing, et cetera, without higher or advanced degrees.” Jennifer M. Granholm the former Governor of Michigan made this statement. In the past many Americans were able to provide for their families with low skilled jobs. However, during current times, these particular jobs are rapidly leaving our economy and entering the world economy. A simple definition of outsourcing is to obtain goods or services from an outside or foreign supplier. Outsourcing is beneficial to the world economy and companies but its having a reverse impact on the American economy and its citizens. America is one of the main contenders in the outsourcing arena, and many of our low skilled jobs were given to struggling countries. Although we lost these jobs the higher end jobs were to say here in America. Companies usually send customer service jobs, claims processing job, transcription jobs etc. to foreign economies. But, higher end jobs such as IT positions and journalism opportunities are also leaving us and going into the global workplace Outsourcing allows individuals in other countries employment opportunities. By sending these jobs to foreign lands we are helping to boost their economies, and raising...
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...Outsourcing Outsourcing has been a consistent problem in the United States for years now. It has always sparked a flare of controversy when Americans now there is a job shipped overseas for cheaper labor. People bash on outsourcing saying that it is bad for or economy, however, businesses love outsourcing. The main reason why it is good for businesses is because it reduces the cost for labor. Businesses are willing to give someone a job overseas because it doesn’t cost the company as much money rather than giving a job in America. Since America has minimum wage and other countries don’t, corporations are willing to ship jobs overseas to save money. Outsourcing is also has disadvantages as well. For businesses, the quality of a product from the result of outsourcing kind of takes a nosedive. Since many firms that provide outsourcing quickly cut the quality of component parts in order to increase their margins. Eventually customers who are accustomed to believing your brand promise begin to notice that your once-great products are suddenly cheap. Also since most of the third party service providers excel at the services they provide, businesses are guaranteed of better quality than an in-house employee would give. Additionally, any service provider will always look to give the best of services since their reputation is at stake. Also another reason why outsourcing is bad is that companies may be supporting slave labor and child labor. Offshoring agreements typically involve...
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...countries have a negative impact on U.S. job opportunities. Free trade is a form of business cooperation in which different countries share their resources and trade with each other with free or lower tariffs (Eiras, n.d.). Free trade can be presented in the forms of importing products such as 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...
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...Is Outsourcing Beneficial or Not? Tanya Billings BUS 644 Operations Management Dr. Gail Hoskyns-Long May 28, 2013 Abstract Outsourcing refers to utilizing outside suppliers to obtain goods as opposed to using internal suppliers. Companies that use outsourcing may benefit from low costing and increased profits. Outsourcing may be beneficial to the company by lowering costs. However, there are negatives associated with outsourcing such as the depletion of American jobs. Within the following text, some pros and cons of outsourcing will be discussed such as job loss, financial implementations, potential recognition, and profitability. Is Outsourcing Beneficial or Not? Introduction Companies are constantly striving to secure the success of their business. There are many different strategies that companies use to ensure longevity such as planning for the future with capital investing or cutting costs with outsourcing. According to Keeling (1999), outsourcing is described as obtaining goods or services from an outside supplier in place of an internal source. Outsourcing is gaining popularity as it proves to be extremely cost efficient and takes away all of the problems with internal suppliers (Oza & Hill, 2007). However, there can be negative impacts from outsourcing as well such as the depletion of American jobs and disruption of the supply chain. This paper will examine the advantages and disadvantages of outsourcing to low labor-cost countries. Outsourcing:...
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...Outsourcing: What’s the true Impact? Cameron D. Rafford MGT 580: Intro to Organizational Behavior University of New Hampshire INTRODUCTION Outsourcing has quickly become one of the most controversial business tactics in the United States. Nowadays, if you call the customer service line of a major business or corporation, there’s a good chance you’ll end up talking to someone thousands of miles away. If you go shopping for new clothes, it’s likely that some of the shirts and pants you try on were manufactured by people from foreign countries, in shops far less glamorous than the ones the finished products end up in. Outsourcing is so commonplace in certain industries, we don’t even think twice about it anymore. But over the past few years, the trend has spread to practices far beyond call centers and apparel manufacturing. In fact, you might be surprised at the industries that rely on outsourcing now (Divine, 2010). This paper will examine the effects that outsourcing has already had on business, as well as look a little bit into the future to see what it holds for us down the road. It will focus on how it has affected our economy and society as a whole, as well as the individual organizations and their employees. There are both positive and negative impacts of this way of doing business that need to be realized and accounted for in order for the economy and American business to remain strong. We will reflect...
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...report is written in efforts to evaluate ethics of outsourcing and the dilemmas involved. | Ethics of Outsourcing Outsourcing has been the target of many positive as well as negative topics amongst many Americans. The United States economy has taken many hits and efforts to reduce costs have resulted in increased outsourcing in labor as well as service industries. The ongoing debate of whether outsourcing is unethical does not fall only in the act of outsourcing itself but also in the terms to which outsourced employees are treated. The question of whether mass layoffs are justifiable or ethical toward employees who are dedicated to corporations for so many years and whether resorting to illegal labor is ethical are also derivatives of outsourcing. We continue to ask ourselves if this form of cost reduction and its effects on the U.S. employees morally ethical? In these challenging economic times, there has been a large array of speculations towards the subject of outsourcing jobs to other offshore destinations. Outsourcing has been going on around the world for a large amount of time before now. Though it seems to be more of a negative topic of discussion during the fall of the American economy, it is important to realize the positive global impacts it has created. It is still considered a morally challenging topic, but there are both advantages and benefits that are being reaped around the world from outsourcing. Outsourcing has been a leading marketing tool for allowing...
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...Economics for Managers Assignment Assignments Program: MBA (2 Years) Sem-1 Subject Name Permanent Enrollment Number (PEN) Roll Number (SEN) Student Name Managerial Economics INSTRUCTIONS a) Students are required to submit all three assignment sets ASSIGNMENT DETAILS MARKS Assignment A Five Subjective Questions 10 Assignment B Three Subjective Questions + Case Study 10 Assignment C 40 Objective Questions 10 b) Total weightage given to these assignments is 30%. OR 30 Marks c) All assignments are to be completed as typed in word/pdf. c) All questions are required to be attempted. d) All the three assignments are to be completed by due dates (specified from time to time) and need to be submitted for evaluation by Amity University. ( √ ) Tick mark in front of the assignments submitted Assignment ‘A’ Copyright@Amity University Assignment ‘B’ Assignment ‘C’ Page 2 Economics for Managers Assignment Assignment: A Q.1. What are indifference curves? Explain the consumers’ equilibrium under the assumptions of ordinal approach. Q.2. Examine the concept and relationship of Total, Average and marginal costs with the help of suitable diagram. Q.3. Differentiate and elaborate the concepts of returns to scale and law of variable proportions. Q.4. Why is demand forecasting essential? What are the possible consequences if a large scale firm places its product in the market without having estimated the demand for its...
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...Adversity of Outsourcing: Outsourcing from the Employee’s Perspective Schillen & Steinke Mitigating the Adversity of Outsourcing: Outsourcing from the Employee’s Perspective Sarah J. Schillen Seattle Pacific University USA sschillen@gmail.com Gerhard Steinke Seattle Pacific University USA gsteinke@spu.edu ABSTRACT This paper explores how outsourcing activities and decisions put the well-being of the remaining employees at risk, ultimately affecting productivity and creating further costs to the employer. It highlights four potential threats to remaining employees: trust, job satisfaction, motivation, and stress. The paper provides several suggestions for mitigating these impacts, including communication to retain trust, acting ethically to ensure satisfied employees, seeking an understanding of employee perspectives to build employee motivation, and providing good planning along with training and development to reduce employee stress. INTRODUCTION Globalization provides organizations with more options than ever before. Business leaders are continuously encouraged to adapt, reevaluate, and strategically improve processes and approaches. Best practices are reinvented rapidly in attempt to keep up with market trends. The quest to recognize new methods for increasing revenue has become the inspiration for exploring new management techniques and strategies. One such rising trend in the advent of global markets is that of outsourcing. Common purposes for outsourcing include improvements...
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...companies. Some of these companies practice outsourcing in third world countries, bringing in cheap labor, cheap suppliers and lower quality products when available. This type of globalization and outsourcing affects local culture in different ways, positively and negatively. Many cultures look down on global stratification and the effects it has on the local culture. Western nations, particularly the United States, tend to impose cultural values through media and popular culture- such as the expansion of McDonalds. Critics view this as the west stating they have more worth or being more correct than other regions’ cultural values. Western society like the United States maintain influence over local culture through media influence and internet services. Positive Impact Global stratification impacts local culture by influencing the people’s sense of economic well-being and ability to afford expense. The addition of a multinational corporate can either stimulate or hinder the local culture and economy. The positive impact is an overall growth in the country’s income. English is also becoming the largest globalized language overall, where economist find this as a positive and negative impact on culture. This globalization of language gives communities the opportunity to do business with other countries, but some languages could end up dying out because of the heavy use of the English language. Another positive impact is that McDonalds supplies jobs to populations around the world, not...
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...“Outsourcing-Offshore” Outsourcing is said to have emerged a few thousand years ago with the production and sales of food, tools, and other household appliances. As soon as small communities and societies began to form, people with specialized professions began to trade with each other for goods and services. It can be said that each worker was outsourcing some activities to others. Research shows that even in the industrial age, a few thousand years later, very few companies outsourced any of their operations. Companies in the 1800s and 1900s were vertically integrated organizations, taking care of their own production, mining, and manufacturing from raw materials to finished goods as well as then shipping the goods to company owned retail outlets. These companies often handled their own taxes, employed their own lawyers, as well as designed and built their own buildings without outside assistance. This model does not apply to all companies during that time period, but it gives a general idea of the time. The history of outsourcing portrays that as onshore outsourcing continued manufacturing outsourcing of low-tech items such as toys, shoes and apparel goods began to take place. After this manufacturing higher value items like high-tech components and consumer electronics began to appear. In fact outsourcing history demonstrates that manufacturing was the first activity that began to move to offshore destinations in a quest for lower costs. Globalization began during...
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...Impacts of a borderless society Unit 6 Assignment Professor Robert P Black, MS I am a serious bargain shopper. I try to save wherever I can. That usually means buying products from a mega chain, whose items are usually from outside of the U.S., verses buying from a local “mom and pop” store. The local stores usually have higher prices than most of the larger chain stores. I have never really understood why. For my family, buying all our food locally can be a challenge sometimes. My husband is Asian and he refuses to let go of some of the Asian food items he loves. For example, he has to have bok choy instead of green cabbage from right here. Rice is another issue for us. It has to be jasmine rice from a South East Asian country. He swears there is a difference. In my opinion, it all tastes the same….bland. List all of the components of two of your meals. Meal 1: For breakfast I had eggs, Conecuh sausage, peaches, and iced sweet tea. Meal 2: For lunch I had a ham sandwich with Sargento Colby- jack cheese, Lays brand sour cream and onion potato chips, and a Jell-O pudding cup. I had a bottle of Aquafina water to drink. A. Where did each component of your meal originate? List the country that each part of your meal came from. (i.e., Did that glass of red wine come from Australia? Is the cheese from France?) Meal 1 – Breakfast My eggs Eggland’s Best eggs came from Jeffersonville, PA. My peaches came from Clanton, Al, which is about an hour north of my home...
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...their long term workforce. Global Communications has to take action and respond to the external threats in the telecommunications industry if they are to remain competitive. Whereas these changes may bring success they are full of challenges. Examples of these challenges include implementing the new strategies so they succeed in improving the company’s current position in the telecommunication industry and effectively deal with pending litigation from the Union who strictly opposes the outsourcing of call centers to Ireland and India as this will contribute to laying off employees in the United States. The corporate cost cutting and layoffs will have a negative impact on moral, thus affecting the productivity of the remaining employees. To mitigate these risks Global Communications will conduct a strategic analysis that will assist the firm in improving and developing their strategic plan. The analysis will include an examination of the firm’s performance in the current market, their impact...
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...Outsourcing jobs may lead to a weakened economy Anne Onyambu ENG 1000 Ms. Lorrinda Khan November 11, 2011 A popular theory states that something is not worth doing if it earns you less than your hourly wage, imputed or otherwise. For example, if you make $120 an hour and you can hire someone experienced to mow your lawn for $20 an hour then, you should go ahead and pay for the service instead of doing it yourself. This will leave you free to use your time where you can earn $100 an hour hence create more value for yourself and many others. Of course, you can mow your own lawn, but you will be losing a value of $100, if there is an opportunity to earn $120 an hour and can get someone experienced, who earns $20 an hour to do your lawn. This is the essence of outsourcing, to save costs and hence create increasing value for stakeholders in organizations. The prevailing trend of outsourcing to foreign countries has become an issue of major concern of all representations of the common people all over the world. Specifically, in America, outsourcing of American jobs has become a big topic. Many jobs are being outsourced to other countries, like China, India, resulting in job scarcity and leaving the American population unemployed. Outsourcing refers to the practice of contracting with third companies or vendors outside the organizations, usually in another country, to deliver products and services to local customers at a cheaper price. The practice of outsourcing is a...
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