International concepts and applications

International: The Outsourcing of IT

In the U.S., there are several interest groups that have been lobbying for legislation that would control outsourcing. Specifically, this legislation would focus on business processes and IT, and would target China and India. Lobbyists could choose to do this for several reasons, one of them being that American jobs are allegedly lost when companies outsource to other countries. Another reason for lobbying against this kind of behavior is that quality can be questionable and may not meet the standards that are set by American companies, which can result in faulty products. I agree with this type of lobbying, and feel that outsourcing should be controlled. However, it is not because of the potential loss of jobs in the U.S. Instead, I feel that the quality of the items that are provided in other countries is often not acceptable, and that something should be done about this. Outsourcing can benefit companies because the labor is less expensive (Barrera, 2004). In spite of the lower costs, though, there are many risks that are taken when a company outsources some of its operations to people in other countries (Pagach, 2004).

Companies choose to outsource to China and India most commonly, because those are the countries where labor is very inexpensive but some standards of quality can still be met (Barrera, 2004; Pagach, 2004). It is also possible to find many people who want to work for an American company and who will do a large amount of work for a very low price. Because wages are low in those countries but cost of living is also low, an American company can pay a living wage in those countries that would be far less than what it would have to pay as a living wage in the United States. Some people may feel that those companies are being cheap, but they are simply trying to make goods at a lower price so that they can sell them in today's very competitive marketplace.

Making things less expensively is not always a good business practice (Pagach, 2004). Ideally this should be left up to companies, but at some point there needs to be a form of governmental control. If there is no control of outsourcing, companies will simply be able to use the cheapest parts and the cheapest labor possible, import goods into the U.S. that were made somewhere else, and not have to worry about quality standards. Governmental regulations exist to protect consumers when it comes to issues such as quality, and the best way to protect consumers with those kinds of regulations is to ensure that companies do not use inferior parts or sell inferior goods that could potentially be dangerous. These goods could be made in the United States, but they are most often created in India and China. That is why the government is targeting outsourcing, and specifically targeting the outsourcing of products to those particular countries. Too much governmental regulation is intrusive to the American people and bad for business, but there must be enough regulation to ensure that the people are being protected from harm.