...overlooked, the organization could make a costly mistake by outsourcing when they would have seen more benefits by keeping the job in house. There are many benefits to outsourcing and can save organizations resources and money if done correctly. Outsourcing - Personnel There are many more factors that need to be considered when analyzing outsourcing: health benefits, time off for the employee, employee pay, the job at hand (will the job be a short-term or long-term project). One of the first items an organization must determine is how long their project is anticipated to take. In the IBM article, they took over for Visteon Corp in making computers for Ford Motor Co. Visteon Corp can anticipate this to be an ongoing project as vehicles are not going anywhere, thus they had to determine which situation would be more beneficial: outsource the work to IBM or continue to make the computer systems themselves. Because Visteon is trying to diversify its business away from the auto industry, they found that outsourcing was their best option (Hechinger, 2003). In the case of IBM and Visteon, even though the project will be a long-term project, by the company analyzing costs and revenues and aligning their business strategies, this allowed them to make the decision to outsource to IBM. Even though project length may help in determining whether or not to outsource a job, this may not always be a determining factor. Should the project be determined that it will be a short-term project,...
Words: 1091 - Pages: 5
...Outsourcing is an important part of Globalization. The choice to outsource U.S. jobs should be taken into great consideration as there are many segments into which it effects greatly. Also, outsourcing is a great option for a company who needs a certain project completed who do not have the man power or the money to hire a new employee, companies can outsource based on projects in the U.S.A. or abroad. Often outsourcing is a way to save money, but there can be unexpected costs as well. While it can be both a benefit to a customer it can also be a reason to avoid doing business with a company due to it. The decision to outsource is certainly not one that any organization should enter into lightly. There are many reasons to consider outsourcing to foreign countries. A few of the most significant advantages of outsourcing include the most well-known reason to consider outsourcing is to access cheaper labor. Workers in developing countries are paid far less than workers in developed countries due to the lower cost of living. Often these workers are not unionized as well, which further helps with cost cutting. At the same time outsourcing U.S. jobs to a foreign country can create a detrimental blow to the reputation of a company. In 2002 when T-Mobile was established the television spokesperson was Catherine Zeta Jones, a very classy and beautiful actress. Customer service call centers were based in the United States and there was never an issue that could not be...
Words: 1277 - Pages: 6
...business and enhancing the quality are three main reasons that firms concern. Referenced from the case, the hourly wage of a lawyer in US is much higher than the one in India. The total cost of finishing the job in a US firm should be higher than the outsourcing price due to the gap between salaries. Costs can thus be reduced. Outsourcing helps a firm to focus on its core business. When a firm outsources the labor-intensive works, there are more resources left behind. The resources can have a better contribution, for example, to allocate more on the main business. Besides, job quality can also be enhanced. Such as the case, the preparation works are outsourced and done by a 6-lawyer group, the quality is upgraded. Also, as mentioned, more resources are allocated to other areas related to the lawsuit, the quality of job as a whole should be higher. Nevertheless, there are also some costs and risks. The costs of selecting and identifying an outsourced company should be a concern because a productive one is vital. An unqualified company can ruin the project. After finding an outsourced company, the risks will be incurred. Legal responsibilities may be produced due to the careless handling of the privacy of clients. Losing control of the services is a risk because the jobs are done outside and controls are difficult. Losing control may lead to another risk – the quality of the services outsourced may thus lower. Question 2(b) When analyzing the parties in the legal outsourcing...
Words: 702 - Pages: 3
...from being overworked and compensated properly. According to Chase, Aquilano, and Jacob (2001) (Chase, Aquilano, & Jacobs, 2001), outsourcing is an intentional act of transferring some or all of a company's activities to an outside provider. Outsourcing may result in loss of control of responsibility for decision making . There are numerous reasons for a company to outsource activities that they currently manage. A few of the reasons for outsourcing are to enhance effectiveness by focusing on what you do best, increase product and service value, obtain expertise, skills, and technologies that are not otherwise available, gain market access, and reduce labor cost for the company (Milkovich, Newman, & Gerhart, 2013). However, along with advantages to outsourcing, there are disadvantages when a company decides to outsource its activities. Often layoffs occur, employees may be rehired, but at a lower wage, psychological impact to laid off or rehired workers, and change to economy in short and long term (French, 2006). This review of outsourcing jobs and its effects will focus on job outsourcing and will consider the affects of a company...
Words: 810 - Pages: 4
...encourage job creation. Because global competition facing U.S. companies has progressively increased over the years, domestic companies have been faced with two primary options in order to remain competitive; move their operations to lower labor cost regions outside of the United States or invest in technologies that lessened the necessity for expensive labor within the U.S., in which both would result in reductions in jobs and earnings within states and municipalities. Job retention became the primary focus after that. Financial incentives would be necessary to back programs in place to keep companies open and employees employed. Without it, the programs would plummet. State and local governments have been slow to react in changing their incentive programs to help keep jobs in tact, while foreign governments have reacted almost immediately, making their incentive programs much more attractive. This has affected several industries. While some states have experienced growth, there are more that are experiencing or have experienced reduction in operations and the closing of facilities. This eventually caused local governments to want to help out a little more. They have begun to arrange economic incentives for the purpose of keeping automotive operations and other industry operations and their associated jobs and payroll. Proposing these incentives have encouraged keeping jobs alive, but for how long? And is it necessarily a bad thing to outsource certain jobs? First, discussing...
Words: 2265 - Pages: 10
...Outsourcing vs. Offshoring Once e have seen the reason and downsizes about outsourcing, let’s talk about the implications it implies. Taking what Claudia has introduced, offshoring is a possible way out of outsourcing and the most controversial one. To clear your mind; the biggest difference is that while outsourcing can be (and often is) offshored, offshoring may not always involved outsourcing. Both may save company money, but only offshoring specifically means sending jobs out of the country, typically to a cheaper location. It includes both to the setup of a subsidiary abroad, or to the outsource activities of a company. So the question is, not just when to outsource, but when to do it through offshoring? 1. It depends on the quality you want to ensure to the client? Ultimately, the best solution for your business depends on your needs. If you need a high level of quality and communications, outsourcing locally may be best. If you need low costs and a systematized business, offshoring is often a better solution. 2. Or maybe it depends on the relationship you must have with the client? Activities which can be precisely specified can be offshored effectively. This is why software coding is often done in an offshore location. On the contrary, activities that require direct customer interaction, deep domain knowledge, or deep cultural knowledge should be onshored. Thus, customer service is usually conducted onshore because of the need to be close to customers...
Words: 1370 - Pages: 6
... In charting our course for the development of our Professional Paper; “Trends in University Outsourcing”, we found the dramatic changes and pressures that exist today in education require significant resources and greater core focus to achieve University overall objectives. The dynamics of the education system have changed significantly and there are far greater challenges that are no longer just national but global in scope. Extrapolated from A Report of the Commission Appointed by Secretary of Education Margaret Spellings, Pre-Publication Copy September 2006, titled; A test of leadership charting the future of US higher education, provided the following insights on some of the challenges which require the consumption of significant resources and consequently a need to focus on your core business: 1) Where once the United States led the world in educational attainment, recent data from the Organization for Economic Cooperation and Development indicate that our nation is now ranked 12th among major industrialized countries in higher education attainment. Another half dozen countries are close on our heels. And these global pressures come at a time when data from the U.S. Department of Labor indicate that postsecondary education will be ever more important for workers hoping to fill the fastest-growing jobs in our new economy. 2) From 1995 to 2005, average tuition and fees at private four-year colleges and...
Words: 3189 - Pages: 13
...achieve maximum success. The decision to outsource a part of a company should not be taken lightly but rather seriously. There are many advantages to outsourcing, however, with that some disadvantages come in as well. The following information in regards to advantages and disadvantages was taken out of articles about IT offshore outsourcing. Advantages There are many good reasons to consider outsourcing. Some are listed below. Cheaper Labor – workers in developing countries are paid less Cut Operating Costs – the outsourced work has to be paid for, but this payment is also cheaper than having your company performed the operation itself. Lower Labor Training Costs – training new employees is expensive. Each employee might need one to three weeks of training and that is expensive. When the customer service or IT department is outsourced the training is cheaper. Increase Productivity – Your Company can have employees working on site 24 hours a day. It becomes harder to attract talented employees to work less desirable shifts, however with outsourcing your company can provide service 24 hours a day, with workers around the globe operating in the best shifts available. Focus on Core Business – the outsourcing of the IT department can leave some space for other important departments within the organization. Disadvantages As discussed above there are quite a few advantages for IT outsourcing even though there are many reasons to outsource there are also disadvantages your company...
Words: 635 - Pages: 3
...in almost virtually every home if you have a landline. A little known fact that people do not know is that, even though you may have another provider, AT&T owns almost 95% of the lines that are ran into your homes, which means, AT&T has become very profitable off of its competitors who have to buy these lines from AT&T in order to still be in business. AT&T has a corporate perks site for employees to purchase goods and discounted rates. Also, AT&T offers a 6% match of your 401K, which is a great reason to seek employment with the company. Due to the merge, a lot of employees lost their jobs due to a non-need of these employees with the AT&T organization. A lot of these employees that came from Bellsouth, etc. were asked to take pay cuts or relocate in order to keep their jobs. This was a huge cost-cutting move which has now led to an increase in jobs and the development of new products. Currently, I am a technical support representative for u-verse operations in San Antonio, Texas. As a technical support representative, we assist customers and technicians with solving complex issues with tv, internet, and voice over IP concerns. We also help corresponding departments such as billing, sales and retention with technical support answers that they may not be able to provide for...
Words: 4203 - Pages: 17
...“Tanglewood is a generic chain store, which features items such as men and women’s clothing, appliances, home décor, and electronics. The company initially targets middle and upper income costumers and provides a distinct “outdoors” theme in every store. Tanglewood’s mission statement clearly focuses on implementing maximum value to not only their customers, but to the employees and shareholders as well. The company will accomplish the desire to maintain their goals by developing good communication skills throughout their employees, achieving excellent customer service, and continuing to please shareholders with their business practice (Heneman, chapter 1)”. Acquire or develop talent, core or flexible workforce: When Tanglewood is deciding whether to acquire or develop new talent, they first must take a look at what positions need to be filled. Focusing on the entry level positions such as store associates or cashiers, shelf stockers should be filled with developing talent, because these positions are relevantly the easiest to train. Bringing employees who have a great deal of experience and talent to these entry level positions may bring with them bad habits they acquired from previous employers and may be hard to brake. Employees with no working experience in the retail business would be a good opportunity for Tanglewood to introduce Tanglewood’s philosophy. The higher positions such as store manager, regional manager and assistant managers should be filled with acquiring...
Words: 606 - Pages: 3
...Thesis: American labor markets are in decline because of global outsourcing which has created jobs overseas, with fewer regulations for the environment and lower costs of operation. Introduction: Outsourcing can happen to almost anyone. It happened to me. I woke up like any other morning. Went to McDonalds for a cup of coffee and then headed to work. Unlike every other morning though I came to work with my department shut down with no warning and an emergency meeting to tell us that we have been outsourced and are not longer needed. Many American jobs everyday are being outsourced to other countries thus hurting the economy of America and the countries that are getting the jobs. Outsourcing is the practice by which a company hires another company to do some aspect of its work. In this presentation I am going to talk to you about three main points: What are the benefits to companies pursuing an outsourcing agenda, the drawbacks to companies pursuing an outsourcing agenda and the drawbacks to the U.S. economy of the pattern of outsourcing. I. What are the benefits to companies of pursuing an outsourcing agenda? a. According to Farrell (2002) At the top of the list, is the financial impetus. To date “cost savings are still a key outsourcing benefit,” with the reduced cost of transferring labor to external settings or even overseas, coming from the access to new markets. (Farrell, 1) b. In the IT world especially, this benefit is paired with...
Words: 1294 - Pages: 6
...of Professional Services Satwik Seshasai and Amar Gupta Massachusetts Institute of Technology Email: satwik@mit.edu and agupta@mit.edu As a growing number of firms outsource more of their professional services across geographic and temporal boundaries, one is faced with a corresponding need to examine the long-term ramifications on business and society. Some persons are convinced that cost considerations should reign as the predominant decision-making factor; others argue that outsourcing means permanent job loss; and still others believe outsourcing makes US goods and services more competitive in the global marketplace. We assert that if outsourcing options need to be analyzed in detail with critical objectivity in order to derive benefits for the concerned constituencies. INTRODUCTION With a growing labor market abroad and a challenging economic situation at home, large and small firms are making the push to outsource professional services to highly skilled personnel in less expensive labor markets abroad. At a global customer summit held in 2003, over 80 US firms indicated that outsourcing has saved them between 25 to 40% annually1. In the services-sector, Forrester Research estimates that 2 percent of all American jobs will move offshore2. The current situation of reduction in costs versus loss of jobs, at least...
Words: 3951 - Pages: 16
...Real Estate in Mexico. It also outlined GE’s successful steps in India in order to source products, services, and intellectual talent from India for its global businesses. The next section of the paper discusses GE’s decision to have multiple outsourcing partnerships. It discusses the strategies of successful multiple outsourcing and consolidated it with GE’s steps of outsourcing its businesses in different countries. In the last section the report elaborates different impact will outsourcing have on US economy. It contrasted the brighter side of outsourcing such as $100 worth of work sent abroad by U.S. companies; $130 to $145 will be reinvested in the U.S. economy. It also reveals the downside as it discusses how sending jobs abroad can affect American job market. 1.0 Introduction 1.1 Background General Electric is a diversified technology, media and financial services company focused on solving some of the world's toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products, the company serve customers in more than 100 countries and employ more than 327,000 people worldwide (General Electric Company, 2008). GE is made up of four businesses, each of which includes a number of units aligned for growth. Its four...
Words: 5814 - Pages: 24
...Outsourcing Jobs I think it is interesting to know the positive and negative arguments about outsourcing. On one hand, there is the current uproar about illegal immigrants swarming in to the U.S. to do the jobs that Americans don’t want to do. And on the other hand, there is the continuing outcry about jobs going overseas. This would be the outsourcing of jobs that Americans would be willing to accept if the corporations were not so adamant about improving their bottom line for their stockholders. So, what is outsourcing and offshore outsourcing? By definition, “outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specialized in that operation. Outsourcing is a business decision that is often made to lower costs or focus on competencies” (Miller, 2010). A good example of outsourcing is janitorial services. Instead of a company training several people for the position, they can outsource these tasks to another organization that specializes in recruitment services. This way they can save the time from hiring and training, and the work output should be of the highest quality. Offshore outsourcing is referred to as, “work done for a company by people in another country that is typically done at a much cheaper cost” (Miller, 2010). These services are outsourced elsewhere to countries other than where the goods and services are actually...
Words: 2350 - Pages: 10
...strategies, Tanglewood would continue its strong culture. Tanglewood must differentiate themselves from their competition; companies like Target and Kohl’s. Tangelwood can accomplish this by having the best staff that delivers a positive experience their customers, thus, making their store standout from their competitors. These strategies will help maintain a positive work atmosphere and build a strong relationship among employees, which will lead to successful job performances. Hiring or retain overstaff or understaffed, and external or internal hiring: As we look at these three decisions for the staffing levels, hire or retain, over staffed or understaffed, and external or internal hiring method we will see that Tanglewood Company is over-staffed. The mangers are cooperative with the employees’ suggestions regarding the company's operations, which need to be decreased. By decreasing employees and increasing the responsibility; staffing and training of departments will make the working environment stronger, and job performance to be improved saving both time and money for the company. Tanglewood should focus on retaining their employees and improving their expertise and skills rather than hiring new ones and develop a more flexible work place. Looking at Tanglewood’s culture and values we find that all employees do well in the family atmosphere, hiring external could affect this strategy. Employees coming from a different culture or with other perspective values will...
Words: 1203 - Pages: 5
