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Effect of outsourcing
Essay on outsourcing and unemployment
Effect of outsourcing
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The term outsourcing refers to the act of contracting out business activities and procedures to a third party. The act of outsourcing sometimes involves the transfer of assets from one organization to the other. The term is also used to describe the act of handling the control of public services to the private corporations. Outsourcing mainly involves both the local and foreign contracting. At times, the term is used to describe relocation of business organizations to another country which is a also known as off shoring. This term is very popular in the U.S especially in the 21st century (Davies, pg. 21). The main motivation for the activity of outsourcing is the financial saving due to the reduced international labor market rates. The opposite of outsourcing is in-sourcing which is the act of bringing the business process that are handled by the third party back to in-house or the local areas instated of contracting it to another country.
The issue of outsourcing has been one of the major component that is affecting the labor market and the economy of the U.S as the big companies that which employees a large population of the United State employees has now shifted their operations oversees where they can find a large demand for cheap labor and low taxes. This issue has complicated the situation of the U.S economy considering that the rate of unemployment is increasing day by day. The issue of outsourcing must be behind the increased rate of unemployment in the country as this jobs that are outsourced to the foreign countries would have been occupied by those skilled Americans who can now find no job or end up getting jobs that which do not fit to their skills (Hira, pg. 63). There is a relative demand for skilled workers in t...
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...g to service oriented market. The impact would be adverse if no precautions are taken to balance the rate of outsourcing and in-sourcing as well as strengthening the local service industries such as health services, education, transport, communication, technology, entertainment, social and economical services. However, outsourcing will have little impact on the overall labor market as it will ensure there is stability in the employment sector. This is because, it is causing decline of the manufacturing sector and at the same time it is associated with increased labor stability in the service sector. Therefore, outsourcing will affect the individual workers who will have to redirect their skills from manufacturing or technical to serve industries. Consequently, the semi-skilled and non-skilled will have quit the labor market or acquire the skills that are in demand.
But First, Training Foreign Replacements” reveal the importance of the article to an international marketer. Outsourcing and offshoring prove to be the few topics one can learn in this article. An international marketer gains a better understanding of outsourcing and offshoring by recognizing the effects on the company, business, and economy. An important aspect of an international marketer’s career is to assess the market from a global perspective. An international marketer needs to know whether a company is outsourcing it’s employees incase they do not and need to market and appeal to potential employees for the company. An international marketer needs to understand the effects and how the topics outsourcing and offshoring work to gain a better grasp the company or business as a
...hored, individuals, families, and communities suffer the negative economic consequences due to limited job availability. Most people who work in these industry sectors are blue collars, who are not professional or academically qualified to work in other fields, as a result their job choices are limited, especially when the main industry in that community is to work in the stage of manufacturing. When there is massive unemployment within a single community the loss of manufacturing jobs can threaten consumers, creating other problems in the society that result in economic costs. Such problems may spiral into the loss of one's car or home, personal debt, and the lack of economical means to afford a child's education, thus continuing the cycle of economic poverty. These aforementioned consequences are indirect and important economic effects of offshoring American jobs.
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
Recently outsourcing has been in the news, especially during political election years. It seems to be a phenomenon that is causing much concern among the population. But exactly how is outsourcing effecting both workers and businesses? And is it as big of a problem as politicians describe?
Outsourcing is a complicated and a multifaceted subject that involves a “business[’s] purchase of parts or labor from another company rather than maintaining a sufficient enough number of its own employees to do the same work in the country where the company is already based” ("Outsourcing"). The first practice of outsourcing was in medieval times when “nation-states called in soldiers-for-hire to help their own military forces during ongoing conflicts” ("Outsourcing"). Many think of outsourcing as a one way trade of production facilities moving outside of a companies locale but in actuality it is a two way trade that also involves companies from other areas moving their factories to local areas where conditions are beneficial for the specific business. Outsourcing has evolved but the main idea has remained the same. The recent increase in outsourcing “was initiated by Wall Street pressures on corporations . . . . for increased profits . . . in the production of goods and services marketed in the U.S."(Roberts).
As the problem of job outsourcing becomes more of an issue in politics, elected officials like the President and Congress will no longer be able to ignore the dilemma. The war in Iraq has been at the forefront of the presidential race but the importance of outsourcing American jobs seems to have been slightly overshadowed. If the issue of outsourcing is not watched carefully and a definitive plan hammered out, a trickling down of negative effects may occur within the U.S. economy. However, there is a polarized opinion on the effects of this “phenomenon”.
Outsourcing emerged on the financial arena during the 1980s and has since then been spreading. Outsourcing production was furthered with the process of globalization which provided a new component leading to the strengthening of resources, skill and labor specializations across the world. The process of outsourcing is using the skill and abilities of a third-party to accommodate society on the foundation of labor. As stated earlier, it was during the 1980s that the process kicked off mainly due to the efforts of corporations when they began to hire labor forces across the world. Even though outsourcing has come out from its developing stages, there are still following effects on the US economy.
Both sides can agree that outsourcing can be desirable for a business do to the potential profit. It allows goods to be made cheaper, management to run smoother, and money to be made faster (Salanţă 270). Both sides can also agree, however, that U.S. jobs are lost as a result of outsourcing (Ahmed 192), as well as environmental damage being cause due to corporations taking advantage of loose environmental regulations (Marquis 39). Upon digging deeper into this debate, one can find that both sides present very convincing arguments.
“5 Facts About Overseas Outsourcing.” Center for American Progress, Center for American Progress, 9 July 2012,
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
Outsourcing, the practice of transferring certain job functions to companies whose employees perform them for less money overseas, is not something that only happens in the corporate world. Following in the footsteps of corporate outsourcing, some state governments, including the state of California, are also beginning to outsource state-funded projects, departments, and services.
We can define that outsourcing is a practice that having a done certain job functions outside a company instead of having an in-house department or employee handle it. We can outsource it either to expert company or an individual. We must use a strategic solution to less the impact on stability of finance and company growth.
Outsourcing has been around for many years. In this paper, I will discuss some of the history of outsourcing, the good things about outsourcing, and the bad things about outsourcing. Outsourcing is important because many companies rely on it in order to get many different products and services to their facility on time and in good shape. Outsourcing is a huge part of the business industry today. Any business can be affected by outsourcing.
...urcing services, the company operation will be became a mess. This is because one organization can’t run a lot of task or project at one time. Therefore an organization need outsourcing in the way to help their organization run smoothly.
When Americans hear the word “offshore outsourcing”, they automatically assume that Americans are losing their jobs to foreign countries. Most of these jobs that companies outsource such as the garment industry jobs are offshore outsourced because they are labor intensive jobs. According to Timmerman