The Benefits of Offshore Outsourcing

976 Words2 Pages
bulb-icon

Recommended: Brief introduction of outsourcing

If offshore outsourcing has such a negative impact on the economy, then why are businesses practicing it? Is it just because of greed? Actually, offshore outsourcing can promote economic growth in some ways. First off, what exactly is offshore outsourcing? Simply put, offshore outsourcing is a business tactic where a company sends a part of their service to another country to be run by a different company. Offshore outsourcing has been seen as a negative business tactic. However, it affects the economy in some positive ways, such as it fuels business competition, it helps business growth, and it opens up new and different types of jobs. One effect of companies’ use of offshore outsourcing is that it fuels business competition, and business competition is good. It is important because it gives one company an edge over another. According to Winston Pepito nowadays if companies do not use outsourcing they will lose ground against the competition (Pepito). If we look at figure one on the previous page we can see this by examining an illustrator’s depiction of offshore outsourcing. This clever illustration suggests that if a company does not use offshore outsourcing that company may fail. This is noted by the personified factory holding a sign that says, “China or bust.” Winston Pepito writes that some say outsourcing helps companies stay in business while others say it is a “disease” ruining the lives of American workers (Pepito). However, it is more important that businesses stay competitive than losing a few low-end jobs in America. Cyber Futuristics claims that competition forces a business to improve the quality of their products or services as well as provide them for cheaper prices (Cyber Futuristics). The fact... ... middle of paper ... ...ore outsourcing. Offshore outsourcing not only brings about economic growth but it also brings about new job opportunities for Americans. In conclusion, it is a fact that offshore outsourcing has its benefits. It is also true that it has its downside. The main downside is the fact that when a company outsources a service to another country American workers do get laid off. However, this is only a short term effect, and it is nothing to worry about it. Most will not even be affected. The long term effects of offshore outsourcing are that it promotes business growth, it encourages business competition and it is a factor in the development of new jobs. All of which outweigh the downside. It is important to see that offshore outsourcing is not something to be afraid of. It is actually a good business tactic and it has many positive effects on the economy.

Show More
Related

  • Offshoring from a Societal Viewpoint and Its Impact on Canada

    2916 Words  | 6 Pages

    Globalisation is a growing phenomenon that is the result of various developments in the global environment, each of which merits an individual analysis of its social impacts. For the purpose of this analysis, the focus will be placed upon arguably its most controversial aspect, offshore outsourcing. Offshore outsourcing, or offshoring, is becoming an increasingly common business practice as a result of a combination of the recent technological advancements in the areas of transportation and communication, and the increased competitiveness of the business world. From the perspective of firms, tapping into cheap labor from less developed countries is a very logical business decision to reduce costs and maximize profits. This has not only motivated businesses to engage in offshoring, it has sometimes been critical to their survival in fiercely competitive environments. Before making judgments regarding the righteousness of offshoring from different perspectives, its impact on stakeholders must first be evaluated.

    Read More

  • On How American Companies Started Offshoring White and Blue Collar Positions to Other Countries with Low Pay since the 1960's

    2192 Words  | 5 Pages

    Offshoring American jobs have positive and negative consequences to the American community. Some of those consequences of offshoring American jobs include Amer...

    Read More

  • Outsourcing: Pros and Cons

    527 Words  | 2 Pages

    Mankiw and Swagel (2006) argue outsourcing is not as large a phenomenon as the media describes. Their research indicates outsourcing accounts for very little of job loss in the United States, nor has it made a distinct contribution to the slow rebound of the labor market. They go on to propose that increased overseas employment has actually contributed to higher employment in parent United States companies. They reported that while 30,000 jobs were lost per month in 2004, two million job changes per month were happening as well. They reference the Bureau of Labor Statistics when they report that in 2015 there are expected to be 3.4 million jobs outsourced, but 160 million jobs gained here in the United States. They also claim that there is a rise in net US income by 12-14 cents per dollar of outso...

    Read More

  • Defining Moments in American History

    1903 Words  | 4 Pages

    ...hnology and advancements in construction and others that will help the American economy. Americans are always trying to push to achieve the better and easier way of life. In the future I believe that there is going to be an economic struggle that will have a major effect on the economy. I believe this is going to happen because of the way that gas price are rising. If there are not major adjustments with the oil companies and the cost of fuel, our country is going to end up in a bind. I thing that the way the economy is going to be able to get back on its feet, is going to be from some new advancement in technology on how cars can run on minimal fuel. I believe that we are going to have political leaders that are going to rise the occasion of the fallen economy and are willing to make the changes necessary to bring our country out of this possible economical crisis.

    Read More

  • The Impact of Offshoring on the U.S. Economy

    1143 Words  | 3 Pages

    In the U.S., critics of off-shoring argue, it eliminates jobs and exploits poor conditions in low wage countries. Others contend this practice has drained public tax coffers; eroding cash strapped Social Security, Medicare, workers compensation and other payroll-deduction funds (Konrad, 2004). Proponents of off-shoring believe it improves employment opportunities and overall domestic wealth. Their rationale, allowing other countries to produce and export complementary/intermediate products into the U.S., allows the U.S. to focus resources and capital on “higher” value added steps within the overall value chain. Higher value added steps, create jobs that pay more and make better use of resources. Greater, more effective utilization of resources enhances the nation’s overall w...

    Read More

  • History of Foreclosure

    1947 Words  | 4 Pages

    The only option is to get the jobs back. Having major manufacturing in the United State once more will give more people the opportunity to work, feeding the unavoidable supply and demand money cycle. The more jobs there are, the more revenue the government makes, and the more money that goes through the economy.

    Read More

  • The Outsourcing of American Jobs

    1024 Words  | 3 Pages

    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”.

    Read More

  • Labor in the United States and Outsourcing

    1040 Words  | 3 Pages

    Since the concept of outsourcing was introduced it has been a subject of debate between politicians and citizens of the United States. Remarkably, it was the United States who supported outsourcing and now it is the United States that feels its economic progress is being threatened by outsourcing. One may argue that the financial situations that existed two decades earlier are not the same as they are today, thus the change of time, business priorities of economies have also changed.

    Read More

  • Restoring American Competitiveness by Gary P. Pisano and Willy C. Shih

    963 Words  | 2 Pages

    The U.S. industries have been outsourcing manufacturing for several decades now. U.S. companies thought they were reducing costs by outsourcing development, manufacturing, and process-engineering abilities. Consequently, U.S. corporations’ knowledge, skilled workers, and supply chain, which are the necessities to producing advanced products, have vanished. For example, almost all notebook computers, cell phones, and handheld devices, which were once created in the U.S., are now designed in Asia. When a major U.S. company outsource, it pressures their rivals to do the same thing. They also lose the expertise of process engineering, which would interact with manufacturing on a daily basis. Minor companies and skilled workers go to where the jobs and knowledge networks are no matter where they are geographically in the world. This decline of trade in the U.S. has caused a negative chain reaction to their suppliers of sophisticated materials, tools, production equipment, and components. U.S. industries do not have a way of coming up with new ideas for the next generation of high-tech products...

    Read More

  • How Consumerism Affects Outsourcing

    883 Words  | 2 Pages

    Do you ever wonder what our nations underlying focus is? The answer is simple and should be fairly easy to guess… Money! Outsourcing originated from someone coming up with the idea that we can make products for practically nothing in other countries and make very high profits. Although it seems like a great idea to businesses, it negatively affects our country. American consumers are buying these products that are made in other countries and the companies profits are continuing to rapidly increase. At the same time, people that are in the production field of work in America are losing their jobs because producers would rather pay foreign workers to get the job done for a much lower wage. When it comes down to it, one of the reasons our economy is suffering is because of outsourcing. Basically, it all comes down to money. The consumers don’t pay close enough attention to where the products are made. Therefore, consumers are spending extra money and are causing outsourcing to thrive. The lack of knowledge Americans have on the subject of consumers affecting outsourcing is leading our country to economic stress but if we begin to recognize the issue, the jobs we could potentially save may be our own.

    Read More

  • United States Foreign Oil Dependency

    918 Words  | 2 Pages

    ...ss with other countries. Instead of importing oil, the U.S should invest in clean-energy technology innovation, which would boost growth and create jobs. Investing in a clean-energy economy is the clear path toward re-establishing our economic stability and strengthening our national security. (Content, T. 2011).

    Read More

  • The Pros and Cons of Outsourcing

    1607 Words  | 4 Pages

    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.

    Read More

  • Service based economy in the U.S.

    354 Words  | 1 Pages

    We say that we are heading toward a more global economy because of the fact that competition in today’s markets is global. This means that corporations in the United States can compete in foreign markets and vice versa, therefore U.S. corporations and foreign corporations become interdependent and thrive off each other. This can have a good impact on the United States because it allows U.S. corporations to seek materials and labor outside of the U.S. in countries such as China, India, and Mexico, where workers are paid a lot less money than U.S. workers, thus allowing them to sell their products for significantly cheaper than if they were produced in the U.S.; however, the tradeoff is that many American workers in the industrial sector lose jobs due to this shift of labor to overseas. In the long run this will be beneficial for the U.S. and although some percentage of workers are losing work, new jobs in the services sector, in fields such as computer technology, telecommunications, and language skills are opening up and experiencing growth because of this change.

    Read More

  • Offshore Outsourcing Essay

    1873 Words  | 4 Pages

    People need to get educated about the great impact that offshore outsourcing has on an economy. The global economy has started to thrive and offshore outsourcing has profited the consumers as companies want to cut costs and competition, which is why I support offshore outsourcing jobs to foreign countries. What does it mean to offshore outsource? Let’s first start by explaining what outsourcing means. The basic meaning of outsourcing is to obtain goods or services from an outside source.

    Read More

  • Essay On Factors Of Production

    815 Words  | 2 Pages

    Besides the externalities, shifting the production possibility frontier outwards will create more jobs in the economy and that is a very good thing indeed.

    Read More

More about The Benefits of Offshore Outsourcing

Open Document