With the recent boom in technology and the increase in global trade and interaction, the world's companies are experiencing completely new ways to operate business. One of these new ways has created a large amount of controversy around it as it has become more and more prominent, and that strategy is Outsourcing, or obtaining goods or services from an outside or foreign supplier. While this might not seem controversial from the definition, what makes it such a hot topic is how it is applied. Typically, the company under question will obtain the product or service they need from a foreign company, due to cheaper costs of labor as well as less government regulation than in their current country. A great source to really learn more about the controversy is a thesis written by economist Gwen Vanderweerdt.
Why be for Outsourcing?
One of the biggest reasons people will support outsourcing is because it is apart of free trade, and to ban it would limit companies freedom. The idea is that companies should be allowed to do whatever they can to ensure profit and revenue which, at every businesses core, is the main goal. To ban their ability to ensure their profit is seen by supporters of outsourcing as a violation of their freedoms and an attack on their businesses welfare. Another reason to support outsourcing, as described by Vanderweerdt, is the positive effects on productivity. Outsourcing, especially in terms of workers, causes your current workers to feel more pressure and having to show more of their worth instead of slacking off. For those workers who remain unproductive, it also favors the company for they have a much wider group of possible replacements how can be more productive as well as in some cases work for less.Why be against Outsourcing?
The immediate reason people will oppose outsourcing is, in terms of the United States as well as many other countries, is the immediate loss of jobs for the home country. This is a major concern for many, seeing as unemployment has been dangerously high and many point to outsourcing as the culprit. Along with this fear of losing their jobs, as mentioned in the thesis, a fear of lower wages is another reason to oppose outsourcing. The idea is that if there are more people competing for your job, the company doesn't "need" you specifically seeing as there are more people with your qualifications and therefor don't need to pay you as much. What is typically highlighted the most is the difference in regulations between the original country and the country being outsourced too. Countries like China and India, where labor laws like safety conditions and minimum wage are much more lenient opposed to other countries, so companies will take advantage of this in order to pay their labor less as well as have to spend less on safety and benefits. As shown in the image above, tech support companies are one of the biggest users of this strategy, and many people find it unethical that they create the idea that who they are talking to is American when in actuality they are outsourced jobs from all over the world.Why does any of this matter?
Outsourcing is something that has become very big in recent years, and has effected the lives of millions, whether positively or negatively. Knowing that this exists and either fighting for or against it is key to the development of business. We are in an important stage of development, where technology has allowed us to do things we couldn't have imagined. It is a state similar to the Industrial Revolution, but now it is a technology revolution. Much like they did in the Industrial Revolution with the new idea of monopolies, we must determine if we should ban outsourcing. Either we get rid of it like we did with monopolies, or learn to live with them and shape the world of business around this new idea. Whatever we as a people choose, one thing can be sure and that is the world is transitioning, and we need to come to agreements on these kinds of topics if we are going to improve for generations to come.
Source:
Vanderweerdt, Gwyn. Analyzing the Debate over Offshore Outsourcing in the Service Industry: Is There a Reason for Concern? Thesis. 2006. Print.
Pictures:
1st One: World with arrows around it that have different transporations. Digital image. Www.Rapidsofttechnologies.com. 10 Feb. 2016. Web. 21 Feb. 2016. <http://www.rapidsofttechnologies.com/blog/index.php/lets-make-sense-outsourcing-mobile-application-development-project/>.
Outsourcing is a great idea for business. Since so many company use outsourcing for saving money and time. This blog very orderly. First it explain what is outsourcing detailed, and then it talking about the advantage and disadvantage of outsourcing. And the picture is fit to this topic. An excellent post.
ReplyDeleteThank you for the feedback! It's interesting to see how both arguments see the entire situation. When weighing the pros and cons it is hard to dictate what is true good but at the very least we are learning more about it.
DeleteSince outsourcing labor is such a pressing, current issue, it is good to see a blog post discussing the repercussions of outsourcing at a basic level as to appeal to all readers.
ReplyDeleteSince outsourcing labor is such a pressing, current issue, it is good to see a blog post discussing the repercussions of outsourcing at a basic level as to appeal to all readers.
ReplyDelete