Decision Making: Outsourcing

Decision Making: Outsourcing

Decision Making: Outsourcing

During the time of the U.S. struggling to recover from a recently turmoil economy, many believe that the outsourcing of jobs to foreign countries is contributing to the high unemployment rate. Well of course it seems obvious that people doing jobs in other countries that can be done by the people in this country are taking available positions. However, each coin has two sides. Alike most business decisions, there are both pros and cons about whether or not a business or organization decides to outsource some of their jobs.

One of the biggest advantages of foreign outsourcing for a business is the cost savings. The reason for cost savings can be because of several reasons. The two most likely is the cheaper labor rates in foreign countries, and the ability of the third party being a specialist in the specific task they are hired for. For the first reason, companies may find that outsourcing a part of their operation, such as customer service, to a foreign country, where there are relatively lower hourly, they can save money for employees' wages. As for the second reason, companies may manufacture a specific part of their product, such as metal fasteners. They may outsource if they are able to find that purchasing from foreign countries saves them money to buy rather than manufacturer that specific part.

Another advantage of outsourcing is the third party's specialized skills that a domestic company doesn't have. Let's use the customer service example once more. If a cellular phone company is constantly getting negative reviews about poor customer service, they may consider outsourcing in order to change the opinions and reactions of the customers. If a foreign company is especially good at dealing with customers successfully and efficiently, even at a more expensive price, companies may consider outsourcing to overall improve their brand.

As for the downside of foreign outsourcing, there are also several that may make a company decide to continue working domestically. Two major cons of outsourcing, as mentioned before, is the reduction of employment in the nation, as well as linguistic barriers. As if it isn't hard enough for people to find jobs now, with companies outsourcing it does nothing but make it more difficult. By eliminating potential jobs for people who are looking, it does nothing but remain to aid the increasing unemployment rate.

The second disadvantage that may arise from foreign outsourcing is linguistic barriers between the countries. Since most countries don't share a primary language, it is common for countries doing work together to not speak the same language. If it was disorganized and not done properly, that business relationship would not be a long one. This con of outsourcing is a major deterrent for companies because of the risk that comes with operating with foreign languages.

Of course there are several more advantages and well as disadvantages when dealing with foreign outsourcing. Many companies outsource because they feel it's most beneficial to the company as well as the customer. However, many companies do not outsource parts of their company to other countries because they may find it not be the best business decision. Obviously it is a decision to be carefully planned and accessed because outsourcing is a major decision that can either help or drastically hurt the company.

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