Case Analysis, Week 2
Scott Tsai
Global Issues in Business
3/16/2013
Professor Brandon Hamilton
Devry University

Abstract

The following is based on my responses regarding case analysis on Chapter 2 Case Analysis of the text book.

Case Analysis: Chapter 5, Question 6 (a, b, and c), pages 194 and 176. 1. Summary
a. In this section, you should summarize the case in one paragraph.
The idea of achieving cost-saving among Corporate America is taking shape in the form of job outsourcing from blue collar to white collar – It used to be that jobs going overseas are based from the manufacturing sector, but now the CEO’s are taking the type of outsourcing to the next level in the service and high-tech sector, meaning software and various design engineers can be outsourced overseas and cut their overhead expenditure by 15%. This has been costing the host country’s availability of skilled jobs in the years to come. 2. Questions
a. Number each question. Each specific question under the numbered Case Discussion Questions should be a paragraph in length because many Case Discussion Questions contain more than one question.
Be sure to restate each question before answering it.
b. Apply the concepts from the appropriate chapters in your answers.
Chapter 6: a. Who benefits from the outsourcing of skilled white-collar jobs to developing nations? Who are the losers?
At the expense of American white-collar jobs, the ones who stand to benefit from outsourcing are the developing nations where the multinational companies have set up offices thanks to free trade and globalization. “Multinational corporations doing some business in their markets can locate their production in the very markets into which they are selling”. (1) b. Will developing nations like the United States suffer from the loss of high-skilled and high-paying jobs?
It is hard to explain if the workers in the United States stand to suffer from the loss of high skilled jobs going overseas since the pattern of international trade are difficult to predict and explain. As explained and proposed by Rayond Vernon known as product life-cycle theory, it is meant to be produced and export “from the country in which they were developed. As a new product becomes widely accepted internationally, however, production starts in other countries. As a result, the theory suggests, the product may ultimately be exported back to the country of its original innovation”. (2)
The US, however, is a country known for innovations and continues to be doing such as its comparative advantage. That means there will always be domestic white collar jobs going to design and implement the next-generation products and services before they will think about moving them overseas.
c. Is there a difference between the transference of high-paying white-collar jobs, such as computer programming and accounting, to developing nations and low-paying blue-collar jobs? If so, what is the difference, and should government do anything to stop the flow of white-collar jobs out of the country to countries such as India?
Unfortunately there is no way to stop the flow of white collar jobs overseas unless the government does something about it. Also, I’d like to point out that whether it is white and blue-collar jobs, there are always demands for skillset within these two categories so I do not think there is any difference if any of them was to send overseas. You may have blue-collar jobs that require high skillset going to other countries. I think the government should implement policies on energy or other strategies to encourage these jobs to stay. One of which is to encourage more incentives for businesses to keep manufacturing at home. There are many approaches to this, one of which is to deal with the energy policy as more innovative ways of extracting fuel can be realized via hydraulic fracturing, or shale energy that can be harvested at a lower costs, meaning the cost of doing business may come down to a point that it makes sense to keep manufacturing at home.
3. References (1) Hill, C. (2012). Global Business Today (7th ed). McGraw-Hill Learning Solutions. Retrieved from http://devry.vitalsource.com/books/0077631471/id/P5-15

(2) Hill, C. (2012). Global Business Today (7th ed). McGraw-Hill Learning Solutions. Retrieved from http://devry.vitalsource.com/books/0077631471/id/L5-2-2