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Globization Outsourcing

Globization Outsourcing

Globization Outsourcing

Cost Accounting I

Globalization Paper

Outsourcing

Outsourcing is greatly affecting the U.S. economy. Outsourcing is taking away jobs from the American people causing a rise in the unemployment rates. Not only is outsourcing taking away jobs, but it is making it harder to find new jobs. Outsourcing is where an American company will send certain jobs or duties to be done in another country. Outsourcing is also the transfer of the management, and also the day by day execution of an entire business function to an external service provider. It is a company's practice of paying an employee in a small developing country to perform a function or produce a product that could be made by the paying company. Business jobs that are typically outsourced include information technology, human resources, facilities and real estate management, accounting, Customer support and call center functions, like telemarketing, customer services, market research, manufacturing and engineering. Outsourcing has become one of the fastest growing trends in the business world. Firms such as IBM, Sprint, AT&T, Dell Hewlett Packard, and Novell are some of the major companies which have really been successful using it for a while now.

Despite companies success there are still many questions raised whether the US gains more than it loses or the other way around. This controversial issue might be considered a big problem for the US economy, and yet on the other hand it might also be considered a great idea. Outsourcing has brought many advantages for companies, but we should ask if it really brought advantages to America as a country. Is it more important that companies become more competitive in the international market, Americans lose jobs, and our economy suffers or should we keep Americans have jobs, and be less competitive. Also, there are serious issues that make outsourcing abnormal which include the manipulation of currencies by foreign governments, the control of workers' rights and the absence of environmental regulations, where this is the ethics part. This issue may never ever go away for the fact that the corporations are making money and United States is being competitive in the international market.

America is becoming very competitive in the international market by cutting its costs. This allows companies to offer better prices of their products. A company can hire someone in a foreign country, for example, for a couple thousand dollars a year where in the U.S. could cost sixty to ninety thousand dollars a year. This is a very significant con for the United States corporations. That looks like a huge saving which means that companies save half of the costs that they would have to pay otherwise. Also, another interesting point which can be realized by just shopping around is the prices of computers where they used to be and where are they now. Just looking at everyday prices of different products in stores we can see what advantage is to outsource. The difference in the price reflects the cost cutting when using outsourcing. On the other hand a disadvantage for customer was the fact that many people complained of an inability to effectively communicate with their support staff because of their heavy accents. These companies are taken from the United States are jobs, but on the other hand these other countries are getting a big boost for their own people. Another important point to make is the fact that the money we actually pay for the production of the computers is not staying in the country but is being sent out of the country which is one of the problems that is being raised.

On the other hand there are companies who claim that it's not about cutting costs. An approach that was taken by Delta Airlines is an example of this. They actually used outsourcing to expand where I would say that they were successful doing it. The company has outsourced 1000 which brought 25 million in savings, gave them opportunity to hire another 1200 sales positions in the United States. On the example of Delta Airlines it seems like we don't really loose that much. Definitely, companies also try to use outsourcing as a tool to expand and grow while saving on some operation costs. Despite the controversial issues regarding outsourcing looking at the statistics the tool of outsourcing is a big advantage to the American economy. By referring to the U.S employment which rose from 129 million in 1993 to 138 million in 2003, which is mainly in services. It very much looks like the over that period the job market grew by about 9 million jobs where the whole scenario doesn't look that bad. The consumer can enjoy the cheaper price meanwhile the job market is still growing.

Despite all of these good things that outsourcing brings us, there is a big disadvantage that America faces. The biggest issue with outsourcing that we face is the loss of jobs for American people. A big consequence of this practice of outsourcing leads America to unemployment of thousands of professionals, many of who were new college graduates and also people with many years of experience. Many of these people who lost jobs were working hard studying fields of study for the reason of being succeeding in a few years. They were hoping there will be need for people such as them with the skills they were acquiring. After a few years many of them were laid off to either off shoring or outsourcing the field.

Outsourcing is a subject in which there is a lot to analyze a talk about. There are many issues which are currently in the air and which will probably be debated for the next few years. What we conclude based on these presented issues is that everything will always have negatives and positives. America should realize that not having enough jobs, or keep making loose jobs is not the answer. I think that America should closely look and try to figure something out that will satisfy its own people and not just leave as it is.


Work Cited

http://www.outsource2india.com/

http://www.prlog.org/10181084-outsourcing-pros-and-cons.html

http://www.finalcall.com/artman/publish/article_1137.shtml
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