The Impact of Outsourcing Jobs to Foreign countries on the US Economy
As we know that outsourcing refers to a company that contracts with another company to provide goods or services that might otherwise be performed by in house employees. Nowadays, the prevailing trends of outsourcing to foreign country have become an issue of major concern of all the representatives of the common people all over the world. Specifically, in America, outsourcing of American jobs has become a big topic.
There are many controversies between two different thoughts that American think of. One of the thoughts may enter a person mind " What are reasons for American companies take jobs away from American workers", and maybe other thought arise is, " Is America economically strong enough to influence a growth of other countries?" Because of two different schools of thought on this major topic, lead to a long discussion about disadvantages and advantages of outsourcing American jobs to foreign countries such as India, China, Philippine and Vietnam on both sides.
At first, according to PRLog.org, there are several main advantages to outsourcing such as cost savings, quality services, and access to specialized skill etc. Perhaps the most prominent advantage of outsourcing is its ability can save money. Many of the companies are able to do the work for considerably less money by provide outsourcing services because they do not have to provide benefit to their workers and worry about paying too much for overhead expenses. For example, outsourcing to country like India can give America access to cost effective service. The same services with the same level of quality are offered in India for a much lower cost. Cost effective also gives American companies a competitive advantage. Additionally, outsourcing does not only save money for the company that outsourcing jobs but also can create new jobs as well. As Eduardo stated that if an Indian software programmer is paid a tenth of an American's salary, a company that develops software in India will save money and provides competitors do the same. Thus, the price of its software will fall, productivity will rise, the technology will spread, and new jobs will be created to adapt. Besides those advantages, there are also other numerous reasons that companies outsource various jobs, but the biggest benefit seems to be the fact that businesses can get expert and skilled service. For instance, outsourcing to India offers a wide range of specialized business process outsourcing solutions to global clients.
In contrast, the disadvantage of outsourcing such as Linguistic barriers and differences in the cultural, economical and social environment leaves the way of task performance on the American companies. Furthermore, due to the low wage rate and flexible labor and tax laws, most of American companies are shifting their production to Asian countries leads to decline in US manufacturing jobs and employments. According to Eduardo, the Internet and other technologies have enabled Dell, the personal computer manufacturer, to open customer support centers in India, and allowed Delta Airlines to send reservations jobs to the Philippines. Other big major disadvantages are the decrease in the pay for American workers and increase the unemployment rate in most of the states in America. Because of these drawbacks of outsourcing to foreign country, it is necessary for American Government to overview the situation and takes effective measures in order to find out the most appropriate solution.
Today, in the world of globalization, America companies are seeking strategies to become more competitive. Key objectives of the strategy response have been to reduce costs, stay ahead of competition and enhance profit. As discussing above, generally we are able to see that outsourcing some of the work to other organizations of foreign countries is one of key strategies because of saving time, money and resources. However, how well outsourcing process will work depends on the relationship between the parties. Therefore, it is a key element to develop a fair and honest relationship in which both parties can benefit by working together. Even though there are some disadvantages of outsourcing to American economy as well, the number of outsourcing jobs to foreign countries is on the rise. For example, according to Eduardo, Oracle- a software company and Ericsson- the telecommunications equipment manufacturers have moved product and software development jobs to India. And an often cited report by Forrester Research says 3.3 million American white-collar service industry jobs will move overseas by 2015 (Steve).
Indeed, the impact of outsourcing in many different parts in the world today is extremely huge. In this case, the effect of outsourcing in American economy are both negative and positive depend on the way people think about it. However, there is always true that outsourcing jobs to the third countries is a big concern and controversy for American as well as their government. Additionally, nowadays globalization is a factor in the world and it affects mostly every big business around the world. Therefore, outsourcing is a fantastic opportunity for any business big or small on the globe.
There are many controversies between two different thoughts that American think of. One of the thoughts may enter a person mind " What are reasons for American companies take jobs away from American workers", and maybe other thought arise is, " Is America economically strong enough to influence a growth of other countries?" Because of two different schools of thought on this major topic, lead to a long discussion about disadvantages and advantages of outsourcing American jobs to foreign countries such as India, China, Philippine and Vietnam on both sides.
At first, according to PRLog.org, there are several main advantages to outsourcing such as cost savings, quality services, and access to specialized skill etc. Perhaps the most prominent advantage of outsourcing is its ability can save money. Many of the companies are able to do the work for considerably less money by provide outsourcing services because they do not have to provide benefit to their workers and worry about paying too much for overhead expenses. For example, outsourcing to country like India can give America access to cost effective service. The same services with the same level of quality are offered in India for a much lower cost. Cost effective also gives American companies a competitive advantage. Additionally, outsourcing does not only save money for the company that outsourcing jobs but also can create new jobs as well. As Eduardo stated that if an Indian software programmer is paid a tenth of an American's salary, a company that develops software in India will save money and provides competitors do the same. Thus, the price of its software will fall, productivity will rise, the technology will spread, and new jobs will be created to adapt. Besides those advantages, there are also other numerous reasons that companies outsource various jobs, but the biggest benefit seems to be the fact that businesses can get expert and skilled service. For instance, outsourcing to India offers a wide range of specialized business process outsourcing solutions to global clients.
In contrast, the disadvantage of outsourcing such as Linguistic barriers and differences in the cultural, economical and social environment leaves the way of task performance on the American companies. Furthermore, due to the low wage rate and flexible labor and tax laws, most of American companies are shifting their production to Asian countries leads to decline in US manufacturing jobs and employments. According to Eduardo, the Internet and other technologies have enabled Dell, the personal computer manufacturer, to open customer support centers in India, and allowed Delta Airlines to send reservations jobs to the Philippines. Other big major disadvantages are the decrease in the pay for American workers and increase the unemployment rate in most of the states in America. Because of these drawbacks of outsourcing to foreign country, it is necessary for American Government to overview the situation and takes effective measures in order to find out the most appropriate solution.
Today, in the world of globalization, America companies are seeking strategies to become more competitive. Key objectives of the strategy response have been to reduce costs, stay ahead of competition and enhance profit. As discussing above, generally we are able to see that outsourcing some of the work to other organizations of foreign countries is one of key strategies because of saving time, money and resources. However, how well outsourcing process will work depends on the relationship between the parties. Therefore, it is a key element to develop a fair and honest relationship in which both parties can benefit by working together. Even though there are some disadvantages of outsourcing to American economy as well, the number of outsourcing jobs to foreign countries is on the rise. For example, according to Eduardo, Oracle- a software company and Ericsson- the telecommunications equipment manufacturers have moved product and software development jobs to India. And an often cited report by Forrester Research says 3.3 million American white-collar service industry jobs will move overseas by 2015 (Steve).
Indeed, the impact of outsourcing in many different parts in the world today is extremely huge. In this case, the effect of outsourcing in American economy are both negative and positive depend on the way people think about it. However, there is always true that outsourcing jobs to the third countries is a big concern and controversy for American as well as their government. Additionally, nowadays globalization is a factor in the world and it affects mostly every big business around the world. Therefore, outsourcing is a fantastic opportunity for any business big or small on the globe.