Preview

Outsourcing and its Benefits

Best Essays
Open Document
Open Document
2643 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Outsourcing and its Benefits
It Takes Two to Tango As society progresses so must its people. In today’s globalized economy, companies are continuously looking for new and innovative ways to sustain revenue in this competitive environment. Companies may raise or lower the price of their goods to stay competitive and most importantly, in business. However, if a company were to outsource its work it would have to do neither of the two. Outsourcing calls for the process of obtaining goods from a foreigner outside source. Almost every organization outsources in some way; typically, the function being outsourced is non-core to the business. By choosing to outsource jobs in developing countries, businesses can attain massive benefits while simultaneously strengthening the economies of the two partners. To some outsourcing may seem as a choice, but in reality its cost saving factors may be the only option. In America, almost every person has seen or bought a product of an outsourced company. Volkswagen, Nike, Apple, and other commonly known brands are only a small fraction of the many companies that choose to outsource production. Thanks to globalization, companies in China, Vietnam, Mexico, and other developing countries are able to keep and improve quality control through a skilled workforce. The products created by the outsourced workers are far from the stereotypical shoddy “Made in China” quality plastics. Contrary to common belief outsourced workers are not random people looking to do a job, but instead they are trained workers specializing in a specific task. For instance, a Chinese employee who assembles iPhone software is skilled in doing just that, and he/she would not be familiar with other assembly methods (Cunningham 32). Similar to the specialized iPhone maker, the factories are also specialized to create a specific product, as it would not make sense to assemble bicycles in a cotton factory. By focusing on and mastering one job, workers are able to focus their attention and skill to


Cited: Childs, Carson. "It Takes 3 to Run a Business." Entreprenuer.com. Entreprenuer.com, 30 Mar. 2010. Web. 06 June 2015. Crill, Rosemary. Textiles from India: The Global Trade. Calcutta: Seagull, 2006. Print. Cunningham, Sharon. Outsourcing. London: Euromoney Institutional Investor PLC, 2002. Print. Eltschinger, Cyrill. Source Code China: The New Global Hub of IT Outsourcing. Hoboken, NJ: John Wiley & Sons, 2007. Print. Maidment, Fred H. International Business. Dubuque, IA: McGraw-Hill, 2007. Print. Mankiw, N. Gregory. Principles of Economics. Fort Worth, TX: Dryden, 1998. Print. Staff. "Outsourcing Sourcingmag.com - IT and Business Process Outsourcing." Sourcingmagcom RSS. Riverwood Solutions, 2 May 2012. Web. 04 June 2015. Wonnacott, Paul, and Ronald J. Wonnacott. Economics. York: McGraw-Hill, 1979. Print.

You May Also Find These Documents Helpful

  • Powerful Essays

    Tegan Hrad Write Up

    • 3041 Words
    • 13 Pages

    Yet, when concerning one’s self or a company’s self with such an area as information technology, outsourcing must be looked at with meticulous contemplation in order to guarantee the best possible outcome. Experts, on both sides of the aisle, the customer / purchaser and the outsourced business, must exhibit exemplary communication between the two of them.…

    • 3041 Words
    • 13 Pages
    Powerful Essays
  • Powerful Essays

    Recently, there have been many debates over the important issue on how companies and governments in the past decades have been increasingly sourcing a wide range of tasks to offshore sites. A group member of ours is an overseas buyer for his company. He is fortunate enough to experience what that is like firsthand. As a buyer, he is required to travel to different countries where large labor and talent pools are available at lower costs to try to procure goods and services at the lowest price, in order to help his company reach higher profits. Many Americans believe that outsourcing is one of the main reasons that the unemployment rate has been increasing in the United States, so they complain and publicly criticize the companies and governments who outsource jobs abroad. Also many U.S. workers (from white- collar well educated individuals to semi-skilled workers) have become more concerned about the security of their jobs due to increasing global economic integration since the early 2000s.…

    • 3058 Words
    • 88 Pages
    Powerful Essays
  • Better Essays

    The pros and cons of outsourcing varies by industry, size of organization, organizational structure, and many other components. The pros and cons are highlighted and the fall of Satyam to encompass a full range of accounting aspects. All size organizations outsource a portion of his or her business. Therefore, taking time to reflect on the points identified in this paper may enlighten or create ideas for consideration regarding outsourcing.…

    • 2422 Words
    • 10 Pages
    Better Essays
  • Good Essays

    While outsourcing may be beneficial to some of the companies partaking in it, the general consensus is that it ultimately proves to be harmful to the American workforce. The act of outsourcing and shifting many company call centers and technical support teams, or “low skill service jobs,” to foreign countries reduces jobs for those that could truly benefit from them within our own country. The unemployment rate has dramatically increased, and continues to rise, compared to what it has been in years past; yet there are numerous companies which still insist on handing over these “low skill service jobs” to people in other countries such as India. The most obvious and logical reason for outsourcing is reducing costs; people are working for a smaller fraction of the pay compared to that of their American counterparts. Outsourcing is used by many companies both in and out of the United States; it has proven to be beneficial to the companies that choose to partake in it, while other companies do just fine without outsourcing.…

    • 1938 Words
    • 8 Pages
    Good Essays
  • Powerful Essays

    Office Supply Incorporated (OSI) is a company in crisis, with challenges in its cost structure and poor IT performance. Outsourcing to Technology Infrastructure Solutions (TIS) is an opportunity to both reduce costs and complexity for the firm, but first must consider whether outsourcing is a good strategic fit for OSI. Outsourcing is known as the practice of turning over responsibility of some or all of organizations information systems to a foreign firm in order to stay competitive. Outsourcing is not new to the business world, as it dominated the manufacturing sector the past couple of decades. There are various advantages and disadvantages. Advantages include lower costs, better quality, and downsizing to focus on the core competencies, highly motivated workforce, and Information System performance problems. Disadvantages include loss of jobs and its effects, hidden costs that are often not calculated security and confidentiality issues, cultural barriers, and lack of control over the supplier. Companies need to effectively research for to be successful in an outsourcing relationship because outsourcing failures are very costly and are difficult to reverse. Outsourcing is a now a popular strategy for many organizations as the worldwide market for computing services are projected to grow yearly. In the future, new outsourcing destinations such as Eastern Europe are expected to pop up. It is essential to carefully weigh both the advantages and disadvantages before heading into an outsourcing relationship with another party.…

    • 1610 Words
    • 7 Pages
    Powerful Essays
  • Best Essays

    Outsourcing a business process requires careful planning and considerations. This report will cover the elements required to make sure the client’s and vendor’s business is protected developing a contract and formalising a relationship, requirements that need to included in a contract in order to achieve a successful business outcome, issues surrounding staff displacement,the effects it will have on the company and staff and how to deal with these issues.…

    • 3964 Words
    • 16 Pages
    Best Essays
  • Powerful Essays

    Offshore IT Outsourcing

    • 5393 Words
    • 22 Pages

    They work to find ways to reduce costs without considering the economical or social impacts. The use of Offshore Outsourcing is one of the methods companies are using to increase their profit margin. Offshore outsourcing is the practice of hiring an external organization to perform some or all business functions in a country other than the one where the product or service will be sold or consumed. Reducing operating costs requires finding cheaper sources of labor, and these sources usually reside outside of the United States. Offshore Outsourcing is no longer the wave of the future it is the current direction most businesses are focused. While companies are rewarded for reducing their costs, it has resulted in the displacement of a large percentage of U. S. technical workers. This study proposes strategies that should be put in place by Corporate America to re-skill or refocus Information Technology personnel in other areas of the company instead of displacing them. Acknowledgement I like to thank God the author of my faith for designing me to be an African American female. No other country allows you to live out your dream to its fullest potential. More amazing, no other country allows you to have unlimited dreams with each being…

    • 5393 Words
    • 22 Pages
    Powerful Essays
  • Good Essays

    With unemployment rates increasing and new jobs seemingly nonexistent, outsourcing has become the center of a lot of hate in the Unites States. In 2011 alone, over two million jobs were outsourced to different countries. I can see why this has upset workers who don’t look forward to the not-so-upper-middle-class type of lifestyle. They can grumble and argue all they want, but the truth is, outsourcing isn’t going to go away, and is in fact the future of business and production.…

    • 410 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Essay Offshoring

    • 1893 Words
    • 8 Pages

    These days we hear a lot about offshoring. But offshoring has become a hot topic that it was even discussed in the recent presidential debate. There are so many questions come to us when we talk about outsourcing. Sending jobs to countries who don’t ask for much is easier than paying Americans who ask for what will get them through the day. Workers in countries such as china and India are hard workers. Many people do not realize that outsourced jobs leave many Americans unemployed. Another problem is that we have more than Americans relying on us. Outsourcing affects everyone. That’s why many young Americans are going to other fields that are the less likely to be offshored. Information Technology jobs overseas also run a security and privacy risk. Risks such as these cause a negative impact on outsourcing.…

    • 1893 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Many corporations are experiencing significant cost savings by outsourcing work to developing countries across the globe. Some advantages of global outsourcing are: technically skilled, inexpensive labor;…

    • 3249 Words
    • 13 Pages
    Powerful Essays
  • Good Essays

    Is Outsourcing Good

    • 693 Words
    • 3 Pages

    Outsourcing has been practice for decades, it happens when companies or business contract a third party, someone outside the business, to produce goods or provide services. Outsourcing can be local, within the same country or offshore, outside the country. Some of the job areas companies outsource are Accounting, Customer Services, Human Resources, Information and Technology and Payroll. Outsourcing supporters affirm that this activity provides substantial cost savings to businesses, through paying less to others do their job, at the same time they can lower prices of goods and services. Although outsourcing brings benefits to a company, this activity may limit the quality of products and the availability of…

    • 693 Words
    • 3 Pages
    Good Essays
  • Best Essays

    Us Steel and Globalization

    • 2821 Words
    • 12 Pages

    Globalization, defined as a “trend away from distinct national economic units and toward one huge global market” by Hill and McKaig in Global Business Today, has provided companies around the world with the opportunity to effectively reduce the…

    • 2821 Words
    • 12 Pages
    Best Essays
  • Good Essays

    American Outsourcing

    • 1669 Words
    • 7 Pages

    Experts on the topic argue that outsourcing allows for more corporate profitability, which in turn shows that companies are solely outsourcing their jobs in order to achieve this profitability. In fact, in a recent study it was shown that if items can be produced for cheap, then they could be sold for cheap and also more profit since the item cost so little to produce. Panos Mourdoukoutas from Forbes acknowledges that outsourcing does in fact lead to corporate complacency in many instances. He says “Outsourcing is easy to be replicated by the competition; it leads to fragmentation and disintegration of the supply chain, inviting new competitors into the industry. It also nurtures corporate complacency; and it undermines a company’s relations with its labor, customers, and the domestic and local communities” (Mourdoukoutas). This is saying that outsourcing is easy to be replicated and can very much help a business produce a profit, so it causes many businesses in a given field to replicate the same process. When this same process is replicated, it shows many other people who want to begin a big business that they can just outsource all their manufacturing jobs and make a great profit in the same field of work, therefore causes a rapid growth of more businesses in this field. What readers must understand is that this instance can occur in almost any field of…

    • 1669 Words
    • 7 Pages
    Good Essays
  • Satisfactory Essays

    When the U.S. companies outsource it helps them be a lot more competitive in the global marketplace. It is easier for them to sell to foreign markets because they have overseas branches. It also allows them the added benefit of paying lower wages, to workers the reason is over there is a lower standards of living. Which allows them to place lower prices on the goods they ship back to the United States.…

    • 324 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Ethics Of Outsourcing

    • 903 Words
    • 4 Pages

    The Ethicality of outsourcing manufacturing work from a local community to a developing country can be devastating, from the worker, to the family and community it is leaving behind, “Outsourcing work from American companies to foreign workers is not a new phenomenon in the United States. The “first wave” of outsourcing to foreign countries hit the American economy in the late 1980’s” (Woffinden, pg. 483).…

    • 903 Words
    • 4 Pages
    Good Essays

Related Topics