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Outsourcing has made great controversy within a number of industries lately. Essentially, outsourcing is "the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees" (Conjecture Corporation, 2012). Yet, this movement is not as easy or pain free as it sounds. Yes, outsourcing can help keep costs down and allow a company to remain globally competitive; however, outsourcing can also cost domestic jobs here in the United States among other problems -- making it a questionable business strategy.
There are numerous advantages to the practice of outsourcing. One of the first and most obvious is the cost savings. Outsourcing helps keep costs way down because workers in other countries do not make as much as their American counterparts. Thus, "the labor savings from global outsourcing can still be substantial" (Engradio & Arndt, 2006). This helps American companies make more profit and…
Baker, S., Kripalani, Hof, R.D. Kerstetter, J. (2004). Software: Will outsourcing hurt America's economy? Business Week. Web. http://www.businessweek.com/stories/2004-02-29/software
Cassidy, Mike. (2012). Apple, White Leaf show the pros and cons of outsourcing. Mercury News. Web. http://www.mercurynews.com/mike-cassidy/ci_21966379/cassidy-apple-foxconn-white-leaf-factory-outsourcing-pros-cons
Conjecture Corporation. (2012). What is outsourcing? Wise Geek. Web. http://www.wisegeek.org/what-is-outsourcing.htm
Engradio, Pete & Arndt, Micheal. (2006). The future of outsourcing. Bloomberg BusinessWeek. Web. http://www.businessweek.com/stories/2006-01-29/the-future-of-outsourcing
Outsourcing is a business strategy that firms employ to reduce costs and sharpen their competitive advantages. ith intention to increase revenues, reduce costs, and achieve performance improvement, large number firms are continuing outsourcing part of their business processes to focus on their core business activities. ith pressing demand from the stakeholders, corporate executives area constantly looking for strategies to deliver better short-term and long-term results that could enhance corporate market advantages. (IBM). hile some firms believe that it is better to in-house all their business activities, some firms believe that it is better to outsource part of their business process in order to concentrate on the core competence of their business in which they could derive competitive advantages. Thus, some businesses believe that in-house all their business processes is inefficient and excessively expensive. (Roy and Benoit 1).
A notable organization is pondering whether to in-house all its advertising department…
IBM. Business impact of outsourcing- a fact-based analysis. IBM Research Paper. 2005.
Lankford, William M. And Faramarz Parsa, "Outsourcing: a primer." Management Decision. 37.4: (1999): 310-316.
McIvor, Ronan. The outsourcing process: strategies for evaluation and management. UK, Cambridge University Press, 2005.
Rishi, Meenakshi and Saxena Sweta C. Is Outsourcing Really Bad as it made to Sound? A Reassessment and some Perspective. Social Science Electronic Publishing, Inc. 2004.
Outsourcing is generally conducted for the benefit of the individual firm, but often creates negative outcomes for the economy at large. The best way to understand the economic issues surrounding outsourcing is to understand the economic tradeoffs at play. Two case studies will help in fostering this understanding. Fishman discusses the experiences of al-Mart suppliers, struggling to compete in a global marketplace. Friedman discusses some of the non-economic factors involved in outsourcing, looking at the issue from the other side of the ocean.
al-Mart is often criticized for outsourcing American jobs, Fishman notes, and he presents evidence that it does facilitate this practice. al-Mart's mission is to offer low prices to customers as a matter of competitive policy, and do to this is must find goods from the lowest-cost producers. Given the factor input costs in the United States, this usually means outsourcing production to low-cost countries, where the prices…
Fishman, C. (n.d.). The Wal-Mart you don't know. In possession of the author.
Friedman, T. (n.d.) 30 little turtles. In possession of the author.
Outsourcing Shipping Management
Outsourcing is a process by which an organization takes the services of an external party to perform some of its operations or functions. Outsourcing is also done by shipping firms all over the Globe (Outsource Freight, 2012). Ship owners generally outsource their operations and management functions to the external parties against for a particular period of time and against a specific sum of money (Lorange, 2009). Outsourcing of the shipping management enables the ship owners to focus on their core competencies and hand over the strategic decision making and policies to the outsourcing parties (AB Crewing, 2012).
Ship owners select the outsourcing parties by analyzing the different aspects of their operations and business environment (Outsource Freight, 2012). There is a full fledge selection criteria which helps the ship owners throughout the outsourcing party selection process (National Freight Management, 2012). The process starts with analyzing the business environment…
AB Crewing, (2012). Technical outsourcing. Retrieved on February 28th, 2012 from
Cariou, P. & Wolff, F. (2011). Outsourcing ship management: Implications for the logistics chain. Retrieved on February 28th, 2012 from
Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2009). Strategic management: competitiveness and globalization: concepts, 8th Edition. Mason: South-Western, cop.
Knickerbocker Maritime, (2003). Technical Ship Management's Effect on Owner's Profitability. Retrieved on February 28th, 2012 from
Outsourcing: "The Effects on Pratt & Whitney vs. Other Global Airline Vendors"
Aviation maintenance is the basic issue. Therefore the process of aviation maintenance and its issues have to be seen in the light of outsourcing. There are many systems in the regular maintenance of aircrafts other than mere issue of parts and replacements. It is in this light that the problems and position of the airline vendors ought to be considered. The many components on the ground include a proper workforce with perfect training and the maintenance issues of civil craft are part of key factors in aviation safety. The actors in the system not only include airlines, airports, manufacturing organizations, air traffic control, and corporate entities not directly involved with flights. The field under study is very broad, and hence there are many smaller specializations. For example even accident investigation comes under this broad span. The major failures…
Billings, Charles E. (1997) "Aviation Automation: The Search for a Human-Centered
Approach." Lawrence Erlbaum Associates: Mahwah, NJ.
Czepiel, Edward. (2003) "Practices and Perspectives in Outsourcing Aircraft" U.S.
Department of Transportation Federal Aviation Administration, Final Report Office of Aviation Research.
Outsourcing is an appropriation of particular business operations to a professional foreign service provider. (Haugen, Musser, & Lovelace, 2009, p. 34) Most often then not, businesses and organizations have trouble handling all aspects of a business process privately or in this case, domestically, and need to seek professional assistance elsewhere. Additionally, some processes do not need permanent in-house professionals, allowing for outsourcing to be the cheaper alternative. Once a job or assignment is outsourced to a service provider, (often foreign) the service provider will then assume responsibility for carrying out the tasks and maintenance of the business/organization's assets.
Before undertaking outsourcing and incorporating it into a business, it is important to understand the advantages and disadvantages involved in outsourcing. Outsourcing offers a number of benefits to a business/organization. It could also pose complications if not outsourced to a suitable service provider. The most commonly outsourced streams of business include: IT…
Haugen, D.M., Musser, S., & Lovelace, K. (2009). Outsourcing. Detroit: Greenhaven Press.
Johnson, M., & Institute of Management (Great Britain) (1997). Outsourcing. Oxford: Butterworth-Heinemann.
Firms outsourcing clinical research for a number of different reasons. The theory of comparative advantage underlies CO, as firms in other countries might be able to do the research more effectively, or more efficiently. Often, CO done in order to save money, as is particularly the case with India. In other instances, the outsourcing is done to firms that have developed particular specialties in research (Piachaud, 2002).
In India, firms are competing for jobs doing clinical research, and that competition has driven down costs. This is important for the industry, because the cost of new drug approval has reached over $1 billion, in part because of the high costs associated with clinical research. So greater competition in research, and using lower-cost labor, has helped companies contain that cost (Jayaraman, 2004). Different payers also make it easier to recruit people for trials in some countries, thus lowering the time spent…
Jayaraman, K. (2004). Outsourcing clinical trials to India rash and risky, critics warn. Nature Vol. 10 (2004) 440
Piachaud, B. (2002). Outsourcing in the pharmaceutical manufacturing process: An examination of the CRO experience. Technovation Vol. 22 (2) 81-90.
Singh, M. (2008). Should clinical trials be outsourced? Time Magazine. Retrieved December 11, 2014 from http://content.time.com/time/health/article/0,8599,1830334,00.html
Initially an output of the 1990's outsourcing has now become a significant part of doing business by corporate America. With businesses throughout the country looking for augmenting their competitive rank in an more and more worldwide marketplace, they are observing that they have the potential to reduce costs and keep up the quality through the greater dependence on foreign service contributor seen as subsidiary to their mainline functioning. Currently, outsourcing relationships have advanced from unsophisticated agreements based on lowering of expenses to multidimensional partnerships which sustain the mainline activity of client companies. The new pattern is towards outsourcing relationships to operate increasingly as partnerships. The service providers of outsourcing are assuming increased jobs in domains which were conventionally performed by the employees within the organization like corporate strategy, information management, business investment and internal quality proposals.
Of late outsourcing work has received interest due to the hastened…
Barrera, Albino. "Fair Exchange: Who Benefits from Outsourcing?" Christian Century. 21
September, 2004, 27-31
'Beyond the Border: Do What One Do Best, Outsource the Rest?" Federal Reserve Bank of Dallas. Issue 6, November/December 2003. Available from http://www.dallasfed.org/research/swe/2003/swe0306c.html Accessed 30 April, 2005
Buckner, Catherine. "Ordering Out" Operations and Fulfillment. 1 June, 2004. 23-26
In addition research has found that estimate that nearly 252,000 computer programming and computer software engineering jobs could be outsourced 2015(Zarocostas). However, 1.15 million new IT jobs could be produced by 2012 (Zarocostas).
In addition to the increased number of jobs that are being outsourced. Such outsourcing impacts the economy in many ways. Although many argue that outsourcing has a positive effect in the long run, for many workers outsourcing means the end of well paying jobs that are often being replaced with lower paying jobs (Taylor). However those that are proponents of IT jobs assert that the U.S. economy has experienced growth in productivity as a result of outsourcing (Taylor). The article explains that in recent years the American economy has experienced a great deal of productivity growth (Taylor). The article asserts that when determined by output per hour in the business sector, productivity growth was 4.4% in the…
Anderson, Stuart. "Outsourcing Saves Money: Sending Jobs Overseas Can Increase the Productivity, Profitability and Competitiveness of U.S. Companies." State Legislatures June 2005: 30.
Bernstein, Jared. "The Young and the Jobless: Why Those New to the Workforce Stand to Lose the Most." The American Prospect Oct. 2003: 17+.
Borthick, Sandy. "Outsourcing Trends: Customers and Market Mature." Business Communications Review July 2001: 28.
Dulebohn, James H. "Outsourcing America: What's Behind Our National Crisis and How We Can Reclaim American Jobs." Human Resource Planning 28.3 (2005): 46.
ZeusCorp is known for its effective and efficient outsourcing practices. The cost of labor is examined to elevate at a very high pace ever since the global inflation has taken roots in the contemporary market place. By comparing the currency rates and the cost of labor the fact become vivid that outsourcing from third world and other developing countries is a cost effective solution to successfully penetrate the market of United Kingdom.
ZeusCorps is an outsourcing intermediate organization that is supported by the equity based investors in Australia as well as United Kingdom. The organization irrespective of being entirely equity-based enjoys a sound financial standing and worth. The concept and studies pertaining to outsourcing and off shoring is taking deep roots in the developed parts of the world and owing to the increasing importance of this phenomenon the young entrepreneurs joined hands to form the ZeusCorps.
Currently all the…
A Bem, D.J. (1967). Self-Perception: The dependent variable of human performance. Organizational Behavior and Human Performance, 2, 105-121
Battin-Pearson, S., Newcomb, M., Abbot, R., Hill, K., Catalano, R., & Hawkins, J. (2000) Predictors of early high school dropout: A test of five theories. Journal of Educational Psychology, 92(3), 568-582.
Billman, N., Geddes, C., & Hedges, H. (2005). Teacher-parent partnership: Sharing under-standings and making changes. Australian Journal of Early Childhood, 30, 44-49.
Bogdan, R., & Biklen, S.K. (2007). Qualitative research for education: An introduction to theories and methods. (5th ed.). Boston, MA: Allyn and Bacon.
It is to be understood that outsourcing would result in an improvement in market performance and not its reduction. The advantages of outsourcing come with experience. So with each outsourcing activity adds experience which enables to improve upon the advantages and to work upon the disadvantages which opponents argue that outsourcing would offer.
Public sector institutions and firms have reconsidered the issue as to where the limit of their institution/firm needs to be placed, and moved over the responsibility of third parties for several activities relating to business. Several firms consider outsourcing to gain the advatages which outsourcing offers such as to minimize the costs as well as to benefit from the non-financial advantages so as to enhance the efficiencies. Offshore outsourcing is an excellent option for businesses and the U.S. economy as a whole as long as the firm which plans to outsource understands and makes an objective…
Gilley, Matthew. K; Rasheed, Abdul. Making more by doing less: An Analysis of Outsourcing and its effects on firm performance. Journal of Management, vol. 26, no. 4, 2000, pp: 763-790.
0 as well as 2.0, is the loss of managerial control over the performed operations. Managers find it more difficult to control virtual teams than the employees that work in the direct sub-hierarchy. In order to regain some of the lost control, managers could delegate internal workers to the vendor and charge them with the supervision of the foreign team. However, this solution increases the costs, as the delegated managers have to be paid extra for having been sent away from home; also, the company has to insure accommodations for them. Nevertheless, the economies made through outsourcing should more than cover the expenses registered with the delegated managers.
Other issues brought about by outsourcing are business confidentiality, diminished and slow communications or hidden costs. In order to solve these problems, the outsourcer has to implement highly selective criteria, he has to know his partner extremely well and he has to…
Tech Web, the Business Technology Network, Outsourcing, 2007
http://www.techweb.com/encyclopedia/defineterm.jhtml?term=outsourcing , last accessed on September 9, 2007
Johann Kunz, Five Steps to Outsourcing Success, it Web, the Technology News Site, March 22, 2002 http://www.itweb.co.za/sections/columnists/in2outsourcing/kunz020322.asp?a=COL&S=Columnists&T=Columnist&O=a , last accessed on September 10, 2007
Sitex Design, Outsourcing - Advantages, http://www.sitexdesign.ro/en/outsourcing_advantages.php , last accessed on September 10, 2007
Ltd., 2007). Furthermore, by 2008, real GDP is expected to be $124.2 billion higher than it would be in an environment without it software and services offshore outsourcing (Flatworld Solutions Pvt. Ltd., 2007). Finally, over the last 10 years, the economy has created an average of 3.5 million new jobs a year, and the vast majority of displaced workers are re-employed within six months.
According to Flatworld Solutions Pvt. Ltd. (2007), between 1983 and 2003, two million manufacturing jobs were lost in the U.S., with the creation of 36 million new jobs in services. Forrester estimates that despite the headlines on offshore outsourcing, it jobs in the U.S. grew in 2003 and will continue to grow at three per cent from 2004 to 2008. Critics of outsourcing argue that it is dangerous to assume that the U.S. has better trained, harder working or more innovative workers capable of higher value…
Baily, M. & Farrell, D. (2004). Exploding the Myths of Offshoring. McKinsey Quarterly, June.
Belenkiy, M. (2004). The Determinants of Outsourcing from the U.S.: Evidence from Domestic
Manufacturing Industries 1972-2002. White Paper from the Department of Economics at UC of Davis.
CNNMoney.com. (2004). Outsourcing Creates Jobs, Study Says. Retrieved August 7, 2007 at http://money.cnn.com/2004/03/30/news/economy/outsourcing/ .
This particular example makes it quite clear that outsourcing is incredibly useful to corporations, and its availability means that it must be utilized if a company wishes to remain competitive in the fast-paced world of technology and innovation (Intertek 2011). In this example, the workforce remains largely unharmed, as well, demonstrating the possibility that jobs really will come back around in the developed world, only shifted up the socioeconomic ladder (BOO 2009).
Ultimately, only time will tell whether or not outsourcing will prove as beneficial to the workforces in developed nations as corporate heads and many politicians claim. It is clear that outsourcing is of enormous benefit to corporations, however, and because of this it is clear that business will not be able to compete on an international level without some degree of outsourcing. Balancing cost savings with overall benefits needs to be the work of all three interested…
BOO. (2009). Outsourcing effects. Accessed 5 April 2011. http://www.benefitsofoutsourcing.net/outsourcing-effects.html
Handfield, R. (2006). A brief history of outsourcing. Accessed 5 April 2011. http://scm.ncsu.edu/public/facts/facs060531.html
Heffner, T. (2010). History of outsourcing in America. Accessed 5 April 2011. http://www.economyincrisis.org/content/history-outsourcing-america
Intertek. (2011). Laboratory outsourcing examples. Accessed 5 April 2011. http://www.intertek.com/outsourcing/laboratory/examples/
Outsourcing some part of business operations can have benefits in the supply chain, as shown for example in the Darden supply chain, where the cutting of salmon to the proper sizes for its restaurants and the peeling of shrimp are both outsourced to offshore companies because those companies provide what Darden requires at higher quality, to specifications and at lower cost than can be had at domestic suppliers or domestic restaurants (Heizer, Render & Munson, 2016). Thus following a strategy of outsourcing can reap benefits for a business that understands the options that globalization opens up for the company. With transportation and technology so advanced today, oversight and on-time delivery are much more readily achievable than in days past.
Supply chain issues that are unique for a company sourcing from 35 or more countries include transportation issues, freshness at time of delivery, cost, quality of product, and specifications being met.…
Contracting officers today must have the skills or competencies required to become the business leaders of the future (Steele 2000)."
An article found in the ABA Banking Journal asserts that Chief Information Officers are interested in it outsourcing because companies are able to acquire it skill sets that may not be present at the internal level. In this article Siemers (1995), explains that One of the reasons CIOs believe that outsourcing is extremely important is the ability to supplement the existing it skill set, still characterized by the legacy environment, with the latest expertise in enabling technologies that provides direct benefits to the business...Staying current with the changes in technology, even as a person's sole responsibility in an organization, is extremely difficult. Therefore, the emphasis on strategic planning and partnering with a vendor well versed in high-technology is more crucial than ever (Siemers, 1995),."
As you can see, the acquisition…
Acquisition: AT&T to Acquire IBM's Global Network Business for $5 Billion. Companies Also Sign Series of Outsourcing Contracts - Company Business and Marketing EDGE, on & About at&T, (Dec 14, 1998) Retrieved January 2, 2005 from; http://findarticles.com/p/articles/mi_m0UNZ/is_1998_Dec_14/ai_53443918
Systems Management Specialists Former Management Leads Acquisition of Classical it Outsourcing Firm Business Wire, Feb 14, 2003. Retrieved January 2, 2005 from; http://findarticles.com/p/articles/mi_m0EIN/is_2003_Feb_14/ai_97669472
Alpar, P., & Saharia, a.N. (1995). Outsourcing Information System Functions: an Organization Economics Perspective. Journal of Organizational Computing, 5(3), 197-217. http://www.questia.com/PM.qst?a=o&d=5001347813
The focus of this area has shifted to eb application development including the development of complex, highly integrated enterprise system platforms beyond the scope of client it departments. This shift has actually accelerated the financial performance of Indian outsourcers to such a great extend that their goals are now to catch IBM in revenues and eventually surpass them in terms of consulting revenue. The outsourcing of complex it projects however must be exceptionally well managed and orchestrated to ensure the goals of the client are still achieved as the development takes place (Hsu, u, et.al.). Due to the high value of programming and development talent in Indian and Chinese outsourcers, this area is the fastest growing of their core businesses. In this area, there are many opportunities for students to advance their careers.
The three most important strategies students can take to capitalize on this trend is to first concentrate…
Cardella, Tom. "Executive Roundtable." Customer [email protected] Solutions 22.3 (2011): 16-7. ABI/INFORM Complete.
Chin-Chia, Hsu, and Chih-Hung Wu. "The Evaluation of the Outsourcing of Information Systems: A Survey of Large Enterprises." International Journal of Management 23.4 (2006):
Hansen, Michael W., Henrik Schaumburg-Muller, and Eugene Pottenger. "Towards a Developing Country Firm Perspective on Outsourcing." Strategic Outsourcing: an International Journal 1.3 (2008): 210-29.
Harland, Christine, et al. "Outsourcing: Assessing the Risks and Benefits for Organisations, Sectors and Nations." International Journal of Operations & Production Management 25.9 (2005): 831-50. ABI/INFORM Complete. Web. 5 Apr. 2012.
Outsourcing in a Global Community
"Even though 'Outsourcing' has its demerits and has been criticized the benefits which it brings is advantageous to the U.S. both now and in the long run."
This statement identifies a claim of fact showing that even though outsourcing has its demerits as any other condition would entail, the benefits which the U.S. economy would achieve by way of outsourcing is much more than its disadvantages and the advantages are not only beneficial now, but also in the long-term.
Outsourcing results in while a firm contract out a business activity to an outsider supplier. This process is normal within the U.S. economy for quite a substantial period. It has become easier to outsource business activities like the customer service, telemarketing, and document management. Other businesses inclusive of medical transcription, tax preparation, and financial services also outsource their activities. The estimates made by the Gartner research…
According to Cusmano, Mancusi and Morrison (2007, p. 5), outsourcing can occur on both the national and international level. Outsourcing, also known as offshoring, has been the target of increasing analytical and policymaking attention, as it is seen as a key driver of change in the competitive market. In technologically advanced regions, outsourcing has been present since the mid 1970s. This trend has grown towards the 1990s, with a general process of "deverticalization taking place (Cusmano, Mancusi and Morrison, 2007, p. 5). In addition, outsourcing tasks have also evolved over time in terms of functionality. Currently, outsourcing tasks might include anything from repetitive functions to more specialized work such as sensitive and knowledge-intensive work. This increasingly wide distribution of specialized tasks has resulted in a type of fragmentation across the globe in terms of international division of labor.
Outsourcing has also sparked a debate regarding its effectiveness in terms…
Cusmano, L., Mancusi, M.L. And Morrison, A. (2007, Jul.). Globalisation of production and innovation: How outsourcing is reshaping an advanced manufacturing area. Retrieved from: http://peer.ccsd.cnrs.fr/docs/00/57/97/91/PDF/PEER_stage2_10.1080%252F00343400802360451.pdf
Goo, J. (2010). The deficiency of IT capability of a firm vis-a-vis competition and IT outsourcing decisions: A two stage DEA and PLS analysis. Retrieved from: http://www.pacis-net.org/file/2010/P03-09.pdf
Hosay, L.P. (2006, Jul.). Outsourcing in State of Florida Government: Consideration of the Practice and Process. Retrieved from: http://askew.fsu.edu/current/masters/actionreport/su2006/Report%20Hosay%20-%20Outsourcing%20in%20State%20of%20Florida%20Government.pdf
Kedia, B.L. And Mukherjee, D. (2006). Understanding offshoring: a framework based on disintegration, location and externalization advantages. Retrieved from: http://faculty.fuqua.duke.edu/ciber/site2006/Downloads/Offshoring%20Conference/Understanding%20Offshoring_Mukherjee.pdf
S. What kinds of jobs? What countries?
Starting around in the initial part of 2004, writings started getting published in the mass media opposing that "insourcing" - supposedly shifting jobs from the outside the U.S. into the U.S. is bigger than "outsourcing." This might seem difficult to accept as true, however there is a basis for accepting it as true. (Globalization: the Outsourcing-Insourcing Issue) "In-sourcing" produced a considerable range of comparatively high-skilled responsibilities in engineering, management consulting, banking, and legal services. Normally "in-sourced" jobs pay 16% higher than the national average. (Outsourcing and American Jobs) More than 90% of the in-sourced assignments arrive from the developed nations. Like for some of the American companies it translates into savings in utilizing an extremely learned, under worked personnel in nations like India and China, a lot of foreign companies see benefit in recruiting American workers to accomplishing some functions. They now engage…
Bates, Steve. Survey says most outsourced jobs stay within U.S. HR Magazine. June, 2004. Retrieved at http://www.findarticles.com/p/articles/mi_m3495/is_6_49/ai_n6076889Accessed on 22 April, 2005
Beyond the Border: Do What You Do Best, Outsource the Rest? Federal Reserve Bank of Dallas. Issue 6, November/December 2003. Retrieved at http://www.dallasfed.org/research/swe/2003/swe0306c.html . Accessed on 22 April, 2005
Frauenheim, Ed. U.S. firms move it overseas. ZDNet News. December 11, 2002. Retrieved at http://news.zdnet.com/2100-9595_22-976828.html . Accessed on 22 April, 2005
Insourcing' - When Foreign Companies Establish Jobs in the U.S. The North Carolina Example. The News and Observer. February 2, 2004. p: A13; Retrieved at http://www.wcit.org/topics/imports/outsourcing_2-04.htm . Accessed on 22 April, 2005
They grant significant respect to women, which allows them to easily adapt to the workplace. Humor is not valued within the Indian workplace, their culture encouraging formal relationships between employees.
The Work Environment in the U.S.
The U.S. work environment is significantly different than that in India. The business environment in the U.S. is results-oriented, encourages and support performance, efficiency, and productivity. The U.S. managers are trained in time management, given the fact that they must reduce the time spent for certain tasks and activities.
In addition to this, the work culture in this country is rather informal. Even so, employees must respect the work relationship they have with their superiors. In comparison with Indians, U.S. workers hold frequent meetings. The common characteristic is represented by the fact that participants in the meeting must respect certain speaking rules. The dressing code is variable and is established in accordance with the…
1. The Outsourcing History of India (2011). Outsource2India. Retrieved February 19, 2011 from http://www.outsource2india.com/why_india/articles/outsourcing_history.asp .
2. India (2009). ITIM. Retrieved February 20, 2011 from http://www.geert-hofstede.com/hofstede_india.shtml .
3. United States (2009). ITIM. Retrieved February 20, 2011 from http://www.geert-hofstede.com/hofstede_united_states.shtml .
4. Doing Business in India: A Cultural Perspective (2004). Stylusinc. Retrieved February 20, 2011 from http://www.stylusinc.com/business/india/business_india.htm.
The Impact of Outsourcing on Information Technology in the U.S.
The greatest impact of outsourcing has been the decrease in the number of jobs in U.S. And this is only a continuation of the process that had begun earlier with the contracting of jobs by the large companies to small suppliers. Only now the jobs are going overseas and this is hurting the chances of certain categories of Americans from getting jobs. In the case of Information Technology jobs, this is a recent development, and even in 2003, the state of Ohio had forecast the career of IT as certain to succeed sort of a career. According to the Department of Job and Family Services in that state had said that the number of computer support specialists would grow by a certain 87% or a total of 1,682 persons a year throughout the next ten years. Following this group…
Brunelli, Mark. Report: Offshore outsourcing helps U.S. job market. (15 April, 2004)
Accessed 15 May, 2005. Available from http://searchcio.techtarget.com/originalContent/0,289142,sid19_gci959840,00.html
Gambling with the Health of the U.S. Economy? Accessed 15 May, 2005. Available from http://www.royalforum.com/article.php?id=59
Griswold, Daniel. Foreign Outsourcing Invigorates U.S. Economy. Accessed 15 May, 2005.
In the two articles used for this analysis, the role of outsourcing as a means to gain greater cost advantages, greater time efficiencies through consolidating support and call centers of internal IT departments, and reduce customer service employee churn were the three major factors driving companies to outsource. Outsourcing is being used through financial services, banking, insurance and throughout manufacturing companies looking to reduce operating expenses and offload non-essential processes that take resources away from the core businesses of these companies. These are the motivations of the companies m mentioned in the two articles used for this analysis.
Analysis of Outsourcing
In the article titled IT: The Mother of all Outsourcing (Smith, 1997) the author presents examples of how IT outsourcing is giving a wide range of businesses the opportunity to streamline operations, reduce costs, increase time-to-market for new products, and also alleviate bottlenecks in ancillary businesses…
Morgan, R. (2007, May 22). When to Outsource IT; Find the Right Mix of Internal and External Staff For Your Company. PC Magazine, 26, 1-85.
Smith, S. (1997, IT: The Mother of all Outsourcing. Director, 51, 56-58.
Offshoring is occuring across a variety of job functions in areas such as IT, manufacturing and the service industry. Functions that easily be digitized or handled by phone or that involve skills that are available or easily developed are all fair game (Hoffman). The range of functions is substantial and increasing over time. Currently, major areas are depicted in Figure1, Offshoring Opportunities Across the Organization. According to some experts such as aker and Kripalani (2004), while the lower-skill sets are being outsources, there is still a global marke palce for high-quality professionals. As an exampe, the authors point out that the IT industry where of the six types of software professionals, architects, researchers, consultants, project managers, business analysts and basic programmers, only basic programming jobs are being outsourced to offshore operations. Therefore, aker and Kripalani deduce that America will still remain the supreme source for application development because of tis…
Baker, S. And Kripalini, M. (2004, March 1). Software: Will outsourcing hurt America's supremacy?" Business Week, pp. 84-90.
Einhorn, B. And Kripalani, M. (2003, August 4). Move over India, China is rising fast as a services outsourcing hub. BusinessWeek International Edition: Asian Business: 20:3844.
Hoffman, M. Offshoring - Is it a win-win game? Global Issue. Retrieved August 18, 2005 from Web site: http://www.student.city.ac.uk/~ra828/assets/michael/michael1.html
Kripalani, M., Einhorn, B., and Magnusson, P. (2003, June 16). A tempest over outsourcing. Business Week, pp. 20-21.
By doing so, the damage can be controlled until additional meetings can be held amongst all the employees. Do not overemphasize either the negative or the positive aspects of this decision, and be sure to be as up-front and truthful as possible in all discussions relating to this scenario. Keeping this advice in mind, will assist in the transition and be very helpful in calming the turbulent waters that are about to be stirred.
The legal aspects of this entire situation must also be examined, and it would make very good sense, to have the legal department ascertain any company liabilities as progress is made in informing the employees.
The decision to outsource can have more of an affect on a company than just legally, ethically or morally. AccuCare has been a good, outstanding employer in Bradford for a number of decades and must not lose that identity. Approaching the…
Engardio, P., (2005) the Future of Outsourcing: How it's Transforming Whole Industries and Changing the way we Work, Businessweek (special report), http://www.businessweek.com/magazine/content/06_05/b3969401.htm , Accessed Oct 21, 2007
Prestowicz, C., (2004) Smart Outsourcing, Dumb Outsourcing, Globo Economicus, Issue 21, No 3, pp 40-42
Maintenance - Inside outsourcing - a permanent on-site team has become a vital part of a large UK refineries maintenance programme. (2007). Engineering. Issue 248, No 2, pg 28
Quinn, J.B., Hillmer, F.G., (1995) Strategic Outsourcing, Questia Journal, http://www.questia.com/googleScholar.qst;jsessionid=Hc0TFwJj1Sls3llWSclFP75HS1K5M7RSFyzQt9m5QvQTVZxThy6f!-1517704538?docId=5000316545 Accessed Oct 21, 2007
Outsourcing: Advantages and Disadvantages
Over time, a number of businesses have embraced outsourcing for various reasons. This is more so the case for companies operating in the global arena. In this text, I discuss the various advantages and disadvantages of outsourcing. In so doing, I will utilize a hypothetical example of a multinational firm by the name Company X.
In basic terms, outsourcing according to Haberberg and ieple (2007) is "the contracting out of part of an organization's operations to a separate company." In the next section, I will discuss some of the key benefits and disadvantages of outsourcing.
To begin with, Company X could make some cost savings should it resort to outsourcing. According to Hill and Jones (2012), an entity could have its costs reduced if the price the said entity pays to a particular specialist firm to have a particular activity completed happens to be less than…
Haberberg, A. & Rieple, R. (2007). Strategic Management: Theory and Application. New York: Oxford University Press Inc.
Hill, C.W.L. & Jones, G.R. (2012). Strategic Management: An Integrated Approach (10th ed.). Mason, OH: Cengage Learning.
Morgan, N. & Smit, E. (Eds.). (1996). Contemporary Issues in Strategic Management. Cape Town: Pearson.
Outsourcing: Pros and cons
The Apple Corporation has long proved to be one of the more resistant of the tech giants to outsourcing its critical functions. An important selling point of the Apple brand has been its superior customer service and hands-on personal attention. This has caused Apple to eschew call centers. Its &D is closely guarded under famously top-level security. Apple is able to charge a premium price for its products because of the high quality of its tech support, in contrast to its rivals. In 2006, Apple Computer Inc. decided not to build a technical support center in Bangalore, despite anticipated cost savings. "There was talk of the company hiring 3,000 workers by 2007 to handle support for Macintosh computers and other Apple gear... Apple never intended to outsource high-end software development to its Bangalore shop: Unlike most tech companies, Apple does almost all of…
Davis, Jim & Michael Kanellos. (1998). Apple may outsource iMacs. CNET. Retrieved
November 25, 2011 at http://news.cnet.com/Apple-may-outsource-iMacs/2100-1001_3-215529.html
Denyer, Paul. (2011). Outsourcing reaches rural India. The Washington Post.
Retrieved November 25, 2011 at http://www.washingtonpost.com/world/asia-pacific/outsourcing-reaches-rural-india/2011/07/04/gIQA9ighFI_story.html
This results in tensions and, therefore, risks" (Goolsby, 2007).
Consideration 4: Is everyone equally committed to best practices?
Best practices and process optimization ensure the provider will save money. But some providers do not implement best practices, or their customer organizations do not allow them to do so, which means that sometimes the provider's business practices must be taken into consideration as well as the cost of a bid. A firm that does not implement best practices can be risk for the buyer, if the provider is running things on band-aid solutions. Conversely, a provider may be frustrated when dealing with a firm that does not instate best practices, or has a different definition of what best practices are.
As an example, Kathleen Goolsby cites "a tiered service delivery in HR BPO would see a sequence of tiers that the users encounter (tier 1 being call center reps using scripts,…
Goolsby, Kathleen. (2007). Risk mitigation in outsourcing in 2008. Outsourcing.com. Retrieved 16 Nov 2007 at http://www.outsourcing-best-practices.com/risk2007.html
Goolsby, Kathleen. (Apr 2004). HRO's experts share best practice tips for HR outsourcing initiatives. Outsourcing.com. Retrieved 16 Nov 2007 at http://www.outsourcing-journal.com/apr2004-hrbestpractice.html
It is assumed United States jobs are being sacrificed.
However, outsourcing not only lower costs and improves profits from the corporate point-of-view, but can result in the saved revenue being reinvested in new products and services, which creates further jobs for the research and development staff at home as well as abroad. (Chin, 2005) Consumers benefit from outsourcing because outsourcing helps lower the cost of goods and services, which in turn encourages them to spend more. But when outsourcing jobs that deal directly with consumers, or in nations with questionable human rights policies, again, a company must do a 'cost benefit' analysis, sometimes beyond the balance sheet, of what may be lost and gained in such an endeavor.
Bagala, G. (1 Jun 2005) "India Today." CIO Magazine. Retrieved 2 Nov 2005 at http://www.cio.com/archive/060105/tl_development.html
Chin, Spencer. (31 Oct 2005) "Outsourcing helps the local economy." (2005) Information eek. Retrieved 2…
Bagala, G. (1 Jun 2005) "India Today." CIO Magazine. Retrieved 2 Nov 2005 at http://www.cio.com/archive/060105/tl_development.html
Chin, Spencer. (31 Oct 2005) "Outsourcing helps the local economy." (2005) Information Week. Retrieved 2 Nov 2005 at http://www.informationweek.com/story/showArticle.jhtml?articleID=172901898&tid=16008
However, with more than half of the world's total stock market capitalization defined as international equity, international equity assets merit a meaningful allocation" (Wells Capital Management Official Webpage, 2010). The justification of outsourcing is that the businessperson contracting the outside services can channel his or her focus upon the business, while the firm that specializes in seeking out sources of capital can focus upon what it does best.
Diversification is seen as an essential part of risk management, and a specialized investment firm may have more diversification strategies at its fingertips, given that it is constantly researching new and innovative channels of financing, rather than focused upon day-to-day business activities.
Question 3: What are the disadvantages of outsourcing capital management?
As revealed in the recent financial crisis, however, bigger is not necessarily better when it comes to capital management firms. Firms responsible for capital management may have outside interests that…
Advantages and disadvantages of outsourcing. (2010). ICT Standards.
Retrieved October 1, 2010 at http://www.ictstandards.com/Advantages_And_Disadvantages_Of_Outsourcing .
Garris, Leah B. (2006, June), Capital budgets: A step-by-step approach. Buildings.
Retrieved October 1, 2010 at http://www.buildings.com/ArticleDetails/tabid/3321/ArticleID/3162/Default.aspx
The likes of service oriented companies like America Online (AOL) is a prime example of how relocation and outsourcing has changed the way service oriented businesses function in this global economy. AOL continues to be one of our nation's most intelligent economic organizations as they take advantage of the outsourcing for the majority of their customer oriented operations. When an AOL customer calls in to have his password reset he may be talking to someone in India, South America or even the Middle East. Although the customer may not know where his call for help has been routed to, the end result of the call is that the problem is usually solved but at a greatly reduced cost to AOL compared to if that same call was routed to a call center within the United States boarders.
AOL's competition is just now beginning to understand the importance of outsourcing the…
Binghame, Charles (2004). Customer call center solutions. M2 Presswire, Sept.
InformationWeek (2004). EarthLink Cuts Jobs, Closes Centers; the nation's third-largest ISP says it needs to outsource more to better compete with AOL and MSN. InformationWeek, Jan.
Champlin, Dell P., et al. (2001). Subsistence in the Computer Era. Journal of Economic Issues.
Collins, Jim (2001, October). Good to Great. Fast Company, 36.
The information highway has altered the way businesses function and today organizations are competing at a global level. We are witnessing the rapid growth of what are known as 'virtual organizations' where partnering and outsourcing are the trend. Outsourcing is a tool for companies to optimize their performance and maximize their profitability by allotting nonspecific functions or non-core areas of their business to respective domain experts. Thus outsourcing provides organizations the opportunity to concentrate on their core areas or the areas of expertise and helps them streamline their operations. Outsourcing is not a totally new concept as companies have all along been outsourcing their training operations, clerical works, shipping and forwarding operations, etc. However the surge in information technology has bought a paradigm shift in the way organizations operate and outsourcing has emerged as a new business model. [Fred Luthans]
Today, outsourcing is considered a strategic measure and most…
Edition, pg 541
2) Federal Reserve Bank of Dallas, "Beyond the Border: Do What You Do Best,
Outsource the Rest?" Accessed on Oct 28th 2004, http://www.dallasfed.org/research/swe/2003/swe0306c.html
Outsourcing Call Centers
Call centers are represented by centralized offices that focus on receiving and transmitting numerous requests from customers or business partners by telephone. These requests usually refer to product support, information, and other services that can be provided by the call center. The operators that work in the call center also handle telemarketing activities, product services, letters, faxes, emails, and others.
The technology used in the activity of call centers is one of the most important factors that influence their performance. The technological developments that companies invest in help them improve customer satisfaction. In addition to this, they can reduce certain costs. Some of the call center technologies allow this activity to be performed from several types of locations.
Outsourcing Call Centers
The high costs associated with customer satisfaction have determined numerous companies to outsource some of their processes and activities. This also refers to call…
1. Brown, G. (2011). Call Center Outsourcing. Business. Retrieved September 29, 2011 from http://www.business.com/guides/top-call-center-solutions-906/ .
[Wharton School] Overall the effect of this is the loss of around 400,000 U.S. IT jobs to offshore locations. However, the open labor market conditions that exist in the U.S. gives a remarkable flexibility and this is reflected in the fact that every week more than a million workers either quit or get laid off and are replaced by other personnel.
The fact that out of the total of $120 billion expended on IT services in 2003 only 1.4% was spent on outsourcing jobs projects a clear picture that there is an exaggerated concern about the negative effects of outsourcing. Also the total import of business services for the same period (2003) which stood at $87 billion was more than offset by the total export of business services which was marked at $134 billion. [Murray Weidenbaum]. Though at the outset it is difficult to endorse outsourcing especially when the personal…
Murray Weidenbaum, "Outsourcing and American Jobs," Accessed on 2nd November 2004, http://wc.wustl.edu/Breakfast_Programs_Transcripts/Weidenbaum_Outsourcing.pdf
Wharton School, "The Case For, and Against, Shifting Back-office Operations
Overseas," Accessed on 2nd November 2004, http://knowledge.wharton.upenn.edu/100902_ss1.html
Once the outsourcing agreement ends, it is possible for the supplier to sell the information to the client's competitors (Schniederjans, Schniederjans and Schniederjans, 2005)
It would require long periods of time for the outsourcing operations to be implemented and retrieve the desired results
The organizational change generated mutations in the organizational culture and stood increased chances of being welcomed with reticence on the part of the Unilever employees
It would be necessary to convince IBM to implement a managerial process based on customer satisfaction (van Dijk, 2009)
Throughout the duration of the outsourcing contract, several lessons were learned by the managerial team at Unilever. All these lessons represent retained capabilities which will help the company improve its future operations and as such its future results. Some of the most notable of these lessons include:
In order to succeed, strong organizational culture and governance are pivotal
Partnerships with strong teams increase…
Carmel, E., Tija, P., 2005, Offshoring Information Technology: Sourcing and Outsourcing to a Global Workforce, Cambridge University Press, ISBN 0521843553
Gottschalk, P., Solli-Saether, H., 2005, Critical Success Factors: From it Outsourcing Theories: An Empirical Study, Industrial Management and Data Systems, Vol. 105, No. 6
Savvas, a., 2008, Unilever Extends IBM Procurement Outsourcing Contract, Computer Weekly, http://www.computerweekly.com/Articles/2008/01/02/228696/unilever-extends-ibm-procurement-outsourcing-contract.htm last accessed on May 13, 2010
Schniederjans, M.J., Schniederjans, a.M., Schniederjans, D.G., 2005, Outsourcing and Insourcing in an International Context, M.E. Sharpe, ISBN 076561586X
The U.S. Department of Commerce reports that services to foreign clients brought Americans $131 billion in 2003. This was in addition to offshore services for U.S. customers, which grew by $7 billion.
The report shows that labor-intensive production and administrative work has grown in low-cost places, while talent sensitive activities have grown in the United States (Malachuk, 2004). This is a major benefit of outsourcing.
Weidenbaum (2005) argues that many American employees are able to keep their jobs because outsourcing allows their companies to stay competitive. Companies in higher-labor-cost economies can stay competitive and thus preserve jobs that remain (Jones, 2005). Many employees as a result will get new or better jobs because the company's financial strength has been enhanced. For example, when a company outsources upgrades for its software system, the domestic demand for basic programmers may decrease, but there will be an increased need for higher-paid systems integrators…
Feldman, W. & Feldman, P. (2005). In or out? Journal of Property Management, 70 (1), Jan/Feb, 32-35.
Jones, D. (2005). Offshoring...benefits the consumer. USA Today, accessed 7/14/06: JOE139485141905.
Kinetz, E. (2005). Trading down. Harper's, 311, July, 62-64.
Malachuk, D. (2004). Offshoring is a two-way street. National Real Estate Investor, 46 (5) May, 76.
Outsourcing and Globalization
Many public and nonprofit managers and leaders are seeking innovative solutions to minimize the costs of operations while providing quality public services. One way to do this is through domestic and offshore outsourcing. Organizations operating globally must ensure that managers and leaders continuously hone communication and leadership skills to work effectively with different cultures. Leaders involved in domestic contracting must also learn new skills in order to achieve desired results from outside entities. In this Discussion, you will consider various implications that outsourcing and globalization have on public and/or nonprofit leaders.
Write a description of at least three implications of outsourcing and/or globalization for public and/or nonprofit managers and leaders. Provide specific examples.
One of the primary benefits conveyed through outsourcing for international organizations is the diversity of perspective it can bring. Global nonprofits must address the needs of an increasingly diverse population…
From this standpoint, outsourcing is more concerned with the strategic implications and incremental revenue gains vs. just the cost reductions over time. Companies are relying on outsourcing as a means to gain critical insight and to learn entirely new skills in the process (Grimpe, Kaiser, 2010). Outsourcing from this standpoint has evolved more into an alliance aimed at knowledge transfer. The reliance on this approach to outsourcing as a means of knowledge transfer has become so prevalent that joint ventures are beginning to occur between outsourcing providers and their largest customers (Moon, Yao, Jiang, 2010). Examples of this include Infosys creating alliances with Microsoft a an joint venture to outsource core it functions globally throughout the software provider first, and second, throughout shared enterprise customers. In conclusion, outsourcing has shifted from being purely focused on just cost reduction to being attuned to the needs of knowledge generation, joint ventures and…
Atkins, D., & Liang, L.. (2010). A note on competitive supply chains with generalised supply costs. European Journal of Operational Research, 207(3), 1316.
Boden, a., Nett, B., & Wulf, V.. (2010). Operational and Strategic Learning in Global Software Development. IEEE Software, 27(6), 58-65.
Grimpe, C., & Kaiser, U.. (2010). Balancing Internal and External Knowledge Acquisition: The Gains and Pains from R&D Outsourcing. The Journal of Management Studies, 47(8), 1483.
James a. Hall, & Stephen L. Liedtka. (2007). The Sarbanes-Oxley Act: implications for large-scale it outsourcing. Association for Computing Machinery. Communications of the ACM, 50(3), 95-100.
This scenario is even being played out today in countries such as China where the cost of labor has increased to the extent that Chinese manufacturers are establishing lower-cost production facilities in Vietnam, for example. It is only a matter of time, then, that workers in Vietnam will likewise become more affluent and will be able to outsource their more distasteful jobs to other, less well situated developing nations. Over time, in this best-case scenario, the tide will in fact rise and everyone will benefit; increased international commerce will create an environment where free trade and democratic ideals will spread like wildfire. Critics of this view, though, emphasize that much of this global expansion of trade will be at the expense of the American consumer, and the long-term scenario will likely be less attractive as foreign interests continue to buy up American property and companies with the money they are…
Challenger, John a. (2005, September). "Embracing Today's Global Economy." USA Today 134(2724): 16.
Domberger, Simon. The Contracting Organization: A Strategic Guide to Outsourcing. Oxford: Oxford University Press, 1998.
Gottfredson, M., Puryear, R., and Phillips, S. (2005, February). "Strategic sourcing from periphery to the core." Harvard Business Review 83(2): 132-139.
Khanna, Shilpa and J. Randolph. (2005). "An HR Planning Model for Outsourcing." Human Resource Planning 28(4): 37.
Outsourcing the System Needs of a Fleet of School Buses to a Contracted Company
This paper explores the advantages and disadvantages to owning and operating a fleet of school buses and outsourcing the system needs to a contracted company. The writer examines the positive aspects of each option and discusses the negative aspects of each one. There were three sources used to complete this paper.
America's economy has been in a slump for several years now and with that the school budgets across the country are being reevaluated to reduce spending as much as possible. One aspect of the public school systems that is being examined is the issue of transportation. School buses have long since been a point of controversy during school bus discussions each year. School bus transportation becomes a bone of contention in many fiscal debates. The districts that provide transportation for its students must locate and…
Jacqueline Emigh, Outsourcing Conference to Be Held in Boston This Week., Newsbytes News Network, 12-06-1993.
Author not available, Outsourcing Market Booming Amid Economic Downturn., the Korea Times (Seoul, S. Korea), 10-23-2001.
JONES Phil, Firms not benefiting from outsourcing, says Deloitte., New Zealand Infotech Weekly, 06-02-1998, pp 3.
Davy, Jo Ann, Outsourcing human resources headaches.. Vol. 43, Managing Office Technology, 09-01-1998, pp 6(2).
Outsourcing of back-Office operations as a way to improve profit at Thomson Reuters
The international business environment has evolved to be increasingly complex and highly competitive. As a result many organizations have been forced to streamline operations and to look for new sources of innovation in efficiency. Many organizations have turned to outsourcing to reduce costs in non-essential operations and processes. Thomson Reuters is no stranger to this trend. In 2008 the organization announced that it would shed fifteen hundred employees across all of its divisions globally and about half of these cuts were targeted in European positions (The Economic Times, 2008). The organization must now find ways to handle the same operations with a smaller staff.
In this environment redesigning operations and processes to take advantage of outsourced labor in non-essential business functions can allow the organization to secure resources to maintain the most critical functions in the organizations…
Benson, B., Davidson, W., Duesing, R. & Gilley, K., 2010. Investor Reactions to Substitution-Based Outsourcing Agreements. Journal of Managerial Issues, 22(3), pp. 409-426.
Bertrand, O. & Mol, M., 2013. The antecedents and innovation effects of domestic and offshore R&D outsourcing: The contingent impact of cognitive distance and absorptive capacity.. Strategic Management Journal, 34(6), pp. 751-760.
Godhar, D. & Deshpande, S., 2009. Outsourcing for Financial Success? An exploratory study. Advances in Competitive Research, 17(1/2), pp. 41-51.
Goldberg, P., 2009. Intellectual Property Rights Protection in Developing Countries:. [Online]
The advances in both the first and third worlds in addition to the development of technology has caused a shift in what countries do what from an industry standpoint and the measures that businesses are able to take and choose to take as it relates to keeping costs down. There are benefits to the consumers and the businesses but there are also some notable drawbacks and downsides, at least to the perception to many, in these shifts of industry and what countries specialize in what work.
The United States' industrial/professional composition has shifted at least two times in a major way since the inception of the country. When the country was started, it was dominated by agrarian business and economic components. The Industrial evolution in the 1800's brought a shift to manufacturing. In the last few decades, there has been yet another shift towards service sector and professional-level jobs…
CBS. (2013, October 9). Bangladesh garment factory fire kills 10 - CBS News. Breaking News Headlines: Business, Entertainment & World News - CBS News. Retrieved October 9, 2013, from http://www.cbsnews.com/8301-202_162 -
Garside, J. (2013, September 5). Workers' rights 'flouted' at Apple iPhone factory in China | Technology | The Guardian . Latest news, world news, sport and comment from the Guardian | theguardian.com | The Guardian . Retrieved
October 9, 2013, from http://www.theguardian.com/technology/2013/
S. Advocates of outsourcing respond that the accumulated revenue can be used to fuel development in the local economy, including domestic businesses in the developing world, making a nation more rather than less independent. Also, U.S. businesses must be more mindful of conditions abroad, given that their own livelihood depends on a stable foreign workforce. Globalization of the economy creates a more interdependent and peaceful world.
Proponents of outsourcing find further evidence in their advocacy of the practice by the explosive growth in the it sector in the U.S., even while jobs were being outsourced overseas. This suggests outsourcing created a win-win situation for all industries, even the industry where the outsourcing was taking place. However, the question remains as to whether outsourcing benefits all sectors of the U.S. workforce in an equitable fashion. Within the U.S., after the recession, the bulk of jobs lost were in the manufacturing sectors…
Outsourcing @ est uy
In today's competitive environment only those organizations succeed that blaze the trail rather then being a mere follower of the path on which many have embarked before. est uy as retail outlet is trying to do the same by becoming a pioneer in achieving better results by out sourcing its IT operations. ut before we ponder over what is unique about et uy's deal we try to find a difference between outsourcing and sourcing out. Yes the two have difference, out sourcing is done to just carry forward a task or a series of task to an outsider while sourcing out is about getting the job done by best in class and best of the best. Most organizations fell in the trap of just giving their some of their activities or operations to anyone offering the cost benefit but very few aspire to get the best…
Antonucci, Y. (1998). The Pros and Cons of IT Outsourcing. Journal of Accountancy. Vol. 185.
McEachern, C. (2004). Best Buy Reassesses IT Needs. VARBusiness. Aug 13.
Silwa, C. (2004). Best Buy Hit With Lawsuit Over Layoffs of IT Workers: Retailer denies claims of age discrimination by 44 ex-employees. Computer World. Nov. 22
Silwa, C. (2004). Best Buy to Outsource IT to Accenture IT head count expected to drop from 820 to 40 as retailer stresses agility over customization. Computer World. April 19.
Headquartered in Malaysia, Call Central provides back-to-back client communication service; voice as well as live chat, to Fortune 500 corporations all over the world. We offer a variety of client interaction services using numerous channels of communication. We are equipped to cost-effectively handle all sizes of business needs, technical service, and whatever unique communications venue you require. Our goal is to understand your business and to emphasize your particularly objectives by dedicating the appropriate level of resources to your particular project. We continually improve our agents' customer care and communication skills with regular monitoring, review, coaching and constant feedback. In partnership with our clients we make real-time program enhancements designed to improve campaign performance based on your criteria. Call Central offers the following services:
Customer Service and Customer Support ? Technical and Warranty Support
Sales and Sales Support ? Customer Retention Programs
Marketing and Marketing Research ? Unique Specialty Projects…
By not offering an artificial incentive to stay in business (the subsidy), product would not have been over-produced and wasted (perhaps an environmental impact), new and in-demand skills would have been acquired, real demands would have been met, and the price for those demands would have fallen (helping the consumer). Thus, by removing the artificial barrier to real and free trade (perhaps influenced by political pressure), economic well-being is ensured for all parties.
Now, consider labor, itself to be a similar commodity as the milk. Perhaps a certain software company employed 5000 employees to write code for a popular program. However, due to better education, increased drive, and longer work days in another country, the company could instead employ 1000 employees abroad (i.e. through "outsourcing"). Given the right political and legal conditions, the company could either allow fewer foreign employees to do the same work, or allow more employees to…
Cannan, Edwin. Ed. Smith, John. (1994). "The Wealth of Nations." Modern Library, New York.
Federal Reserve Board (2005). "Remarks by Alan Greenspan on Globalization." States News Service. Retrieved from Web site on July 2, 2005, from, http://www.knowledgeplex.org/news/78622.html
Grard, Larry. (2002). "Farmington, Maine, Dairy Farmers Hope Milk Dumping Will Lead to New Contract." Portland Press Herald. 11 Nov. Retrieved from WIU Library, http://web4.infotrac.galegroup.com/itw/infomark/743/228/69930978w4/purl=rc1_ITOF_0_CJ120064363&dyn=3!xrn_2_0_CJ120064363?sw_aep=uphoenix
Joyce, Helen. (2001). "Adam Smith and the Invisible Hand." +Plus Magazine. March. Retrieved from Web site on July 3, 2005, from, http://plus.maths.org/issue14/features/smith/
Outsourcing Jobs and Labor Laws
Outsourcing Jobs to Foreign Countries Without Fair Labor Laws
government currently does not prohibit companies from outsourcing jobs to foreign countries that do not have unions and/or fair labor laws. Whether this practice is acceptable or should be stopped is worthy of consideration. There are two main reasons for researching this topic. First, the cost to outsource to foreign countries is often much less than the cost to pay employees in the United States to do the same work (Baldwin, 2006; Dine, 2007). That means that the profit for the company can be larger, and the amount customers have to pay for the products can be lower, which benefits both the customers and the company (Panitch & Swartz, 2003). Second, not all countries have the same types of labor laws, and some countries have no unions and few labor laws at all (Schifferes, 2004). This…
Aneesh, A. (2009). Global labor: Algocratic modes of organization. Sociological Theory 27:4.
Buchholz, T.G. (2004). Bringing the jobs home: How the left created the outsourcing crisis - and how we can fix it. New York: Sentinel.
Krugman, P., Obtsfeld, M., & Melitz, M. (2012) East Asia: Success and crisis, in International Economics: Theory and Policy. NY: Addison-Wesley.
Part III -- Persuasive Paper: Possible Disadvantages and Answers
The defects will be the concern of the local manufacturer and not that of the business. This, again, will mean savings on waste, labor and shipping. As a desirable consequence, outsourcing will boost the host country's economic condition by providing affordable products to the citizens. This enhances consumer spending (Marie).
Outsourcing manufacturing, however, encourages dependence on the outsourcing partner (Marie, 2010). This is a disadvantage on the side of the contractor if the partner goes out of business. Fortunately, this can be offset if the parts for manufacturing are distributed to different contractors and all the elements sent to a final contractor to assemble the finished product. Cost and time other disadvantages. Tests will require more time for fine tuning before distribution. These processes cannot be avoided. However, strategic planning with the right outsourcing partner may prevent or eliminate the risks of outsourcing manufacturing internationally (Marie).
Ethics and Social Responsibility…
Hill, C.W.L. (2007). Ethics in international business. Chapter 4. McGraw-Hill.
Retrieved on April 8, 2011 from http://www.highered.mcgraw-hill.com/sites.../Hill6e_1B_Sample_Chapter04.pdf
Jack, a. (2010). Focus shifts to the emerging economies. Financial Times: the Financial Times, Ltd. Retrieved on April 8, 2011 from http://www.ft.com/cms/s/0/84bb43c4-5649-27df-b835-00144feab49a.html#ax221Iuh75xBV
Joo, J.W. (2008). Pharmaceutical outsourcing: trading quality for lower costs. Health Reform Watch: Seton Hall University School of Law. Retrieved on April 8, 2011
Overview of ecommendations
As has been demonstrated above, whether or not a company should outsource its human resources management tasks and processes is a highly individual consideration. Many aspects of the company's operations, its financial standing and capital reserves, and the specific industry fluctuations must be taken into account when determining whether or not to outsource. It should be noted that this overview recommendation is by no means an exhaustive list of considerations.
Companies that are very small or that have very stable human resources needs should keep most if not all of their human resources management processes and tasks internal, and specifically should allocate these tasks amongst line managers in order to achieve the maximum efficiency. In certain industries where human resources management takes up a large amount of organizational resources yet remains very stable in the time devoted to such management -- academia and healthcare are examples, in…
Becker, B. & Huselid, M. (2006). Strategic Human Resources Management: Where Do We Go From Here? Journal of Management 32(6):898-925.
Gospel, H. & Sako, M. (2010). The unbundling of corporate functions: the evolution of shared services and outsourcing in human resource management. Industrial and Corporate Change 19(5): 1367-96.
Greer, C., Youngblood, S. & Gray, D. (1999). Human Resource Management Outsourcing: The Make or Buy Decision. The Academy of Management Executive 13(3): 85-96.
Lawler, E. (2004). Human resources business process outsourcing. San Francisco: Jossey-Bass.
Outsourcing ensures that the development as well as the startups of the businesses is faster and improved.
Outsourcing in Foxconn
Foxconn is one of the world's leading and most famous electronic manufacturing service providers. One of the most recent outsourcing-based moves that have been made by Foxconn includes terminating more than a million employees and replacing these with robots (Brown and ilson 88). The main reason that was given by the representatives of the company was that more than 1.3 million employees were responsible for doing repetitive tasks in the manufacturing sections and the tasks were mind numbing based on which more errors were being seen in the performance of the employees. On the other hand, in the modern days, the manufacturing is a costly plan and when it comes to paying salaries and wages to more than a million employees, it is beyond being affordable. Thereby in the modern…
Bragg, M. Steven. Outsourcing: a guide to-- selecting the correct business unit-- negotiating the contract-- maintaining control of the process. Edition 2. John Wiley and Sons, 2006.
Brown, D. And Wilson, S. The black book of outsourcing: how to manage the changes, challenges, and opportunities, Wiley Desktop Editions. John Wiley and Sons, 2005.
Burkholder, C. Nicholas. Outsourcing: the definitive view, applications and implications. John Wiley and Sons, 2006.
Corbett, F. Michael. The Outsourcing Revolution: Why it Makes Sense and How to Do it Right, Kaplan Financial Series. Kaplan Publishing, 2004.
Outsourcing' -- What is it?
'Outsourcing' in a hospitality context means hiring outside contractors to do the work ordinarily done by departments in your own hotel. According to Vitasek, 'Early outsourcing helped companies realize balance sheet improvements, access lower-cost labor and often improve productivity'. Because of these advantages, outsourcing continues to be practiced in hotels today, and newer and better models for outsourcing have been introduced as well. Clearly, outsourcing is here to stay: the practice has been steadily increasing in the industry every year (Yetzer 2010).
Impact of Outsourcing within Hotels
Outsourcing is an issue of great debate in the hotel industry. Some hotel employees feel a sense of loyalty to their hotel and may see outsourcing as a sort of intrusion on their turf for the benefit of saving money. This can lower morale in the workplace. Others can understand the value of outsourcing and accept it as…
Bair, A 2012, Eight ways to add efficiency to your hotel's housekeeping and laundry department, viewed 7 May 2012,
Darnell, C 2012, Contract cleaners? No way? Viewed 7 May 2012,
Outsourcing would have on IT Functions in the Information Systems Area of an Online Business
The term "outsourcing" has received a lot of bad press lately, but the good news is that the process itself does not have to be harmful, and can in fact add significantly to the accomplishment of an organization's goals - if certain steps are followed in making the decision to do so are followed. To this end, this paper provides an analysis of the potential effect that outsourcing would have on the IT functions in the information systems area of an online business, including what factors must be considered in making the decision to outsource or not, risks and benefits associated with outsourcing the IT function, as well as typical cost origins in outsourcing agreements and some examples of the associated dollar amounts involved. An assessment of the implications of using an outsourced IT department…
Carr, D.F. (July 15, 2001). Forging 21st century value chains. Internet World, 7(14), 27.
Oppenheimer, P. (1998). Top-down network design. New Orleans: Cisco Press.
Porter, M.E. (March 2001). Strategy and the Internet. Harvard Business Review, 74(6), 61.
Robbins, S.P. (2001). Organizational Behavior: e-business updated edition. Upper Saddle River, NJ: Prentice Hall.
Outsourcing Case Study: Saving Money at the Magazine through Process and Supplier Selection
Every business must contend with the decision of how many of its necessary processes and the products and materials utilized in these processes will be internally sourced and accomplished, and which processes and procurements will be outsourced to other companies (Monczka et al. 2008; Trent 2007). This magazine operation is no different, and with the sudden reduction in initial capital for the venture combined with the ongoing uncertainty of the current economy, this decision becomes all the more pressing -- cost savings and efficiency are hugely and directly impacted by the choice between outsourcing and vertically integrating, and with newly limited initial operating capital such savings and efficiency improvements are essential to the success of the venture. Determining which processes will create the most substantial cost savings without sacrificing the quality or the unity of the magazine…
Monczka, R., Hnadfield, R. & Giunipero, L. (2008). Purchasing and Supply Chain
Management. Mason, OH: Cengage.
Trent, R. (2007). Strategic supply management. Broward, FL: Ross Publishing.
This makes it seem as though only applicants who already work for the company will be given serious consideration and may discourage any outside interest in the position. This statement probably should be left off of the new job description in order to make it more flexible.
One thing Mary has not considered is job rotation within the stores. Since there is an assistant manager for each department of the stores, the individual departments are what each store manager will have knowledge about. This approach will not be very customer friendly since customers have a tendency to ask anyone that appears to work for the store in general questions pertaining to their particular issue. They may ask an assistant store manager working in the shoe department a question about cosmetics. It is unacceptable to a customer when an employee of the store cannot answer a question, no matter what department…
Grensing-Pophal, Lin. "Clear Expectations." Credit Union Management 23.10 (2000):
Janis, Tiffany. "Create a Team That Will Get Results." Ophthalmology Times 34.9
Plus, SweatX's proponents supposed it would make accessible a model that would provide anti-sweatshop campaigner confirmation to push most important brands like Gap plus Nike whose goods are made chiefly in Asian also in Latin American sweatshops to elevate their workplace values. It should be noted that the majority of SweatX's thirty-five fabrication workers have started other jobs, characteristically with harsher conditions and inferior pay. Although the company's for the most part recent executive team wishes to keep the brand name alive under a very new trend. Somehow, SweatX may well also bond with human rights along with labor crowd like United Students adjacent to Sweatshops as well as the National Labor Committee. Which have splurge the precedent decade exposing sweatshop exploitation and underneath workers' move violently to unionize about the world. Auxiliary, SweatX may possibly help building a U.S. marketplace for union commodities made in underprivileged countries by selling…
Thomas L. Friedman. "30 Little Turtles." New York Times, February 29, 2004.
Richard Appelbaum & Peter Dreier. "SweatX Closes Up Shop." The Nation, July 19/26
Charles Fishman. "The Wal-Mart You Don't Know." Fast Company, Issue 77 December 2003.
If you don't do them well, you can't compete, but doing them better than anyone else provides limited benefit. Companies should carefully examine these tasks for outsourcing opportunities, keeping in mind that they may require the outsourced resources to have specialized or more developed skills.
Activities that are necessary, but a commodity level of service is sufficient - Commodity tasks are necessary for keeping a company functioning, but they do not require specialized skills. Performing these tasks at a level higher than the industry norm provides the company no value.
According to industry estimates that for most companies, only 20% of their activities provide strategic advantage, 50% of their activities are critical, and 30% are at the commodity level. However, most companies outsource few critical tasks, though outsourcing critical tasks represents a large opportunity. Several Independent Software Vendors (ISVs) that have outsourced development have found that about 20% of their…
external components of sourcing and internal vs. external assembly. (Rao, 2001)
Advantages of Outsourcing
Outsourcing also referred to as competitive sourcing is considered to be a basic variation made by the private agencies to restructure the business strategies and boost the competitive advantages of the organization. Outsourcing of many human resources management functions like recruitment, training and benefits of administration is resorted to by the companies with a view to entailing advantages to the administration. Outsourcing is gradually being transformed however, from a small scale strategically development approach to a more insidious philosophy where organizations are resorting to outsourcing for almost every function in respect of engineering, research, development and facility maintenance operations. Similar to the private sectors the public sector organizations also resorting to outsourcing to reduce the costs and re-concentrate on resources. (Holt; Kennedy; Rehg; Ward, 2002)
Supplementation of values is evident in outsourcing in respect of the…
Anderson, Lynn. 1994. Going outside has merits - outsourcing information technology services. Computing Canada. August 3. Retrieved December 16, 2004. ( http://www.findarticles.com/p/articles/mi_m0CGC/is_n16_v20/ai_16227566 )
Antonucci, Yvonne Lederer. 1998. The Pros and Cons of it Outsourcing. Journal of Accountancy. Vol. 185. Retrieved December 16, 2004. ( http://www.questia.com/PM.qst?a=o&d=5001347813 )
Gainey, Thomas W; Klaas, Brian S; Mcclendon, John. 1999. HR Outsourcing and Its Impact:
The Role of Transaction Costs. Personnel Psychology. Vol. 52.
Often times the decision to outsource means the displacement of a significant number of company employees, and it is vital that the organization consider the decision carefully before making the move (Sinton, 2003).
The ramifications of deciding to outsource Human esource duties reach far beyond the Human esource department however, and because of this it is an issue that the entire corporate structure can be impacted by.
With the cost of outsourcing combined with the ripple impact that the decision to outsource has on a company overall the decision to outsource is an important one, and one that should involve deep analysis and investigation (Sinton, 2003).
The decision to outsource has an impact on the power and influence of Human esource Departments.
As outsourcing continues to expand in the United States and elsewhere with regards to Human esources, the market is dividing into three basic categories; technology enablers, consultants and…
Adler, Paul (2003) Making the HR Outsourcing Decision. MIT Sloan Management Review
Henneman, Todd (2005) Measuring the true benefit of human resources outsourcing; Experts say it's not all about upfront cost savings; smart companies will also consider factors like organizational performance and worker satisfaction.(The Insider) Workforce Management
Greer, Charles, Youngblood, Stuart (2004) Human Resource Outsourcing Management, The Make or Buy Decision. The Academy of Management Executive.
Sherron, Patrick (1999) Outsource HR to Cut Costs. The Management Journal
Client-partner relationships must also be carefully vetted: financial stability, a proven track record, and the need for long-term as well as short-term cost savings must be addressed. Given the critical nature of the relationship, problems with the provider can result in damage to the client's other relationships, including customer relations. The client and service provider should also be on a similar path of technological growth and it is essential that the service provider have reasonable contingency plans in the event of unforeseen circumstances.
Miller's article is short on specifics -- either anecdotes or demonstrated dollar savings of clients. Rather, it is a measure of perceptions of clients, not actual facts that prove the benefits of outsourcing. The article's claims are mainly based upon a survey of CEOs of clients and providers of outsourcing, and whether the CEO's perceptions are really based in reality remains an open question. orkers who worry…
Miller, Stephen. "Collaboration is key to effective outsourcing," HR Trend Book. 2008.
Stephen Miller, "Collaboration is key to effective outsourcing," HR Trend Book. 2008, p.152
outsourcing from an employee and corporate perspective in an attempt to gain insight into the pros and cons of the outsourcing issue. The researcher proposes that outsourcing is morally and ethically an objectionable practice, that results in little benefit to the company and much harm to the employees it affects. A formal review of the literature available with regard to outsourcing is analyzed, and the case against outsourcing is made. The researcher shows how outsourcing impacts workers in a negative manner, goes against the moral and ethical standards inherent in business and proves that outsourcing will ultimately result in dissatisfaction for corporations in the long-term.
From a moral and ethical standpoint, outsourcing is wrong and has negative consequences on both employees and the productivity and efficiency of corporations in the long-term. From a practical standpoint, corporations that rush to outsource job functions realize few returns on their investment and…
Dobbs, L. "Is Outsourcing Killing Jobs." Optimize, September (2004), Issue 22.
Doig, Stephen; Ritter, Ronald; Speckhals, Kurt & Woolson, Daniel. "Has Outsourcing
Gone Too Far?" The McKinsey Quarterly, (2001): 25.
Mintz, Steven. "The Ethical Dilemmas of Outsourcing." The CPA Journal, 74(3), (2004):