From raw materials to semi-finished components, from consulting to detail engineering and from direct sales to distributor/retailer networks – there have been avenues for outsourcing as a part of strategic management of operations. The new twist to this has been the phenomenal growth of outsourcing from overseas resources as opposed to the conventional local outsourcing, resulting in significant job losses at home and the public outcry.
Business surpluses or profits seek avenues of investment with high returns. Multinational firms in the developed nations with high surpluses and operating in saturated markets look to developing and underdeveloped nations with high populations for investments. The latter countries, on the other hand have the problem of high unemployment or surplus labor and low wage structure. These factors result in overseas investments, actively supported by the globalization process. In the process, the benefit of low cost production not just for the overseas market but for the home market itself
Loss of jobs for locals is a sensitive issue for politicians and the public spirited. President Obama’s famous statement, ‘Say no to Bangalore and yes to Buffalo’ reflects the chasm between political and business compulsions. Multinationals like Nokia, IBM, Microsoft, Wal-Mart, General Motors and Levy have set up production facilities overseas with local employees while even in the US thousands of jobs in the technology industry are contracted to foreign workers (CNN.com; Rai, New York Times Feb.22, 2004; Case study, Rugman & Collinson, 2009, pp.30 &31). The debate surrounding the ‘sweatshops’ of Asian countries with both the supporters and opponents holding out valid arguments, is another angle to the phenomenon of outsourcing. In the ultimate analysis, outsourcing has to be viewed as a trade off between high-cost local manufacture vs. low-priced but standard quality foreign-made products vs. job losses at home vs. expanding demand ...
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This paper begins by defining outsourcing and then describing the different forms of outsourcing. Next it outlines why organizations opt to outsource and how they select what to or not to outsource. The paper then dwells on the advantages and disadvantages of outsourcing from two perspectives: from the point of view of a company and from the point of view of the country.
Many people know that outsourcing has been a way to save money in the long run. When information systems problems happen, it is easier to bring an expert in to fix the problem because it is less costly. One of the reasons it is less costly is because a consultant can be hired for a short time and the company does not have to pay overhead or pay a regular salary and benefits to an employee.
It is a task or an operation that can be done by employees of the internal organization but are instead contracted to a service provider for a significant period of time. The service provider can be offsite or onsite but the most common method of outsourcing is off shoring of activities to different developing countries like India or China.
As a result, outsourcing has been increasing in the healthcare industry over the recent years particularly in nuclear medicine, ophthalmology, dental services, radiology and imaging, and oncology. The increasing cost of technologically advanced equipments is the major factor enhancing outsourcing approach in the healthcare sector.
While in all markets executives think outsourcing is better for the world economy rather their own markets, the issue has become politically sensitive in America (P&P, 2004). The issue has become highly emotional
There have been many reasons for the companies to outsource there is business and some of them are trying to cut costs of IS services, the demand for good quality systems and the inability of the company to establish complex computer systems. The major hurdle in
They have been able combine their professional activities with the operation of the firm. According to usatoday, most of small businesses lack the ability to employ permanent workers. Thus, they prefer outsourcing their portions of work to people online.
This led to numerous effects on the American populace as well as the economy. In this case, a company that bases in South Carolina plans to outsource its call center to Asia. This will lead to the loss of 120 jobs in South Carolina. Such a move raises concerns on whether