...How outsourcing affects the US economy is a matter of great debate. For those who speak for the international business and globalization, this practice will have an overall positive effect on the US economy - since it is economical for companies to hire less expensive work force of other developing countries, opens up opportunities for greater entrepreneurship in the US, and leads to more Americans holding higher level jobs. Critics suggest that hiring foreign workers has an immediate effect on the US economy by stripping many Americans of jobs they would have performed, particularly by semi-skilled or skilled laborers as all the American population is not to be placed at higher level of managerial hierarchy. Both sides on this issue and all those who try to navigate a middle road between the two sides, have some valid points. It is true that outsourcing has led to job loss in the US, and has had a detrimental effect on those...
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...Outsourcing: The Government, the People and the Companies Jeffrey W. Coleman Webster University Abstract Making a decision about whether or not to move these activities offshore is a decision of far-reaching consequences. Developing countries have been unable to radically alter their industrial structure due to numerous internal institutional and external technological barriers. Consequently, they have sought global participation through outsourcing activities. This is indeed a break from the traditional self-reliant way of doing business. Outsourcing arrangements are technologically and organizationally complex, and present a variety of challenges to manage effectively. Outsourcing benefits include cost savings, quality improvement, and the ability of the organization to concentrate time and resources on its core business. Outsourcing trends change from year to year, and usually involve changes such as progressive outsourcing, cloud sourcing, mergers between organizations from different parts of the world and protectionism. In this paper we will look at a few of these areas such as the how in recent years the business practice of outsourcing jobs has been considered both a blessing for American business and a concern for the American worker, the amount of outsourcing being done and why, the affect on the economy in the United States, and the role government plays in outsourcing. The paper concludes, however, that the trend is just beginning and how our country...
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...Why Does Big Corporations Move to Another Country to Save Revenue? “The United States of America’s economy is in shambles.” Statements like these are heard more often than ever in today’s media. More depressing economic dialogue usually follows them, though I was not trying to include a pun alluding to the Great Depression. This dialogue usually refers to the great economic bailout organized by the government and paid for by the people, however is not every circumstance in which the government has spent money in some way or another paid for by the people via taxes? That is an argument for another time. The next most popular economic anecdote with which the media uses to boosts its ratings is concerning the major three United States based automotive corporations: Ford Motor Company, General Motors Corporation, and Chrysler. The bailout of these automotive manufacturing corporations has stirred great debate within the walls of the Capitol. The proponents of the bailout state that even if we do not go through with a bailout for these automotive manufacturing companies, the country in some way or another will ultimately being paying the same – if not an increased – amount of money to support all of the people that will lose their jobs if these corporations are to go under (Graves). The people against the bailout say that these corporations are coming to the government due to the bailout of major banks and insurance firms and wanting “a piece of the pie” for themselves. There are...
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...There is no denying that outsourcing is a major phenomenon on a massive global scale. The Information Technology field is a major contributor to global outsourcing. Outsourcing is currently a major social and political issue in the United States. At stake are thousands of jobs ranging from help desk operators to software programmers. The financial impact outsourcing has on the global economy is also a key factor. As time passed, companies recognized the need to cut operating costs, reduce personnel and save their resources. Hence, outsourcing came to the forefront as a way to stay competitive. Developing nations like India and China have come to light in recent years as they have a wealth of computer engineers and programmers who will work for low wages. Outsourcing has become such a common practice that it is now considered a benefit to the world economy, and knowing that outsourcing is a $400 billion a year industry and IT outsourcing is a vital part of the industry. A slump in IT outsourcing would mean a loss for the global economy andThe world must accept that outsourcing is a major staple to the world economy. However, with every step forward, come two steps back. Companies continue to outsource jobs overseas, leaving thousands jobless in the United States. Companies have emphasized costs cutting and profits rather than focus on the social change outsourcing has done to American Society and the economy. The era of technological outsourcing has essentially lowered the...
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...The Trend of Outsourcing Jobs Did the major companies in America not think of global competition as they started to expand their operations and increase the salaries of the workers? Why is it such a hot topic now, why didn't this act of outsourcing start long ago? What effect does outsourcing have on the American economy, will we be able to stop this trend, and if so what will be the effect. In this paper I will be looking at and discussing why companies are outsourcing the jobs overseas. What benefits that companies are getting out of it, and the problems that face management, as outsourcing seems to be the trend of big business. INTRODUCTION Outsourcing is the delegation of tasks or jobs from internal production to an external entity (such as a subcontractor). Most recently, it has come to mean the elimination of native staff to staff overseas, where salaries are markedly lower. There has to be a reason that companies are going to outsourcing rather than hiring people within their own country. The bottom line, the single thing that drives every company in the world. What ever can increase the bottom line you can expect that companies will do everything possible to reach higher profits. Living in Michigan almost my whole life, and being feed from the hand of General Motors outsourcing hits close to home. I feel that the one thing that has increased outsourcing is the results of the union. Back in the time when the union started I believe what they were doing was something...
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...ideas we have never heard of, and do much more than what we are used to. Globalization is the connecting of countries, cultures, trade, communication, transportation, technology, and money. This process of becoming globalized concerns many worldwide, with many wondering how their life will change. It is the process in which different societies and cultures integrate to gain better understandings, and live a better quality of life. This progress affects the world economically, politically, culturally, and socially. It affects each country differently, some better than others. This term once meant that more people are moving across the globe, spreading ideas and goods across borders. In today’s world, some of the matters it deals with are free trade, world banks, sweatshops, and outsourcing. Many people see the positive effects of globalization. Societies that become richer with knowledge may be accepting of all types of people, making our world more peaceful. However, I see globalization as damaging to developing and developed countries in today’s world. Workers in developing countries are prone to harsh conditions and exploitation. Developed countries suffer from greedy CEO’s and unemployment due to outsourcing. Globalization damages developing countries because many young people work in sweatshops, which damages their health and development. These young boys and girls have little opportunity to develop into better human beings. They are subject to work during their development...
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...in the offshore outsourcing (offshoring) of jobs in the service industry. Although offshoring is common in the manufacturing industry, it only recently began in the service industry. The recent increase in the service industry has occurred because of new technology and the ability to access information from anywhere. Those who oppose offshoring believe it takes away American jobs, lower wages, and causes declines in America’s standard of living and any benefits from offshoring are unevenly distributed. Offshoring in the industry has not negatively affected the United States. Currently, offshore outsourcing in the service industry has a net benefit to society and there is no reason for concern. Critics charge that the information revolution (especially the Internet) has accelerated the decimation of U.S. manufacturing and facilitated the outsourcing of service sector jobs once considered safe, from backroom call centers to high level software programming. (This concern feeds into the suspicion that U.S. corporations are exploiting globalization to fatten profits at the expense of workers.) They are right that offshore outsourcing deserves attention and that some measures to assist affected workers are called for. But if their exaggerated alarmism succeeds in provoking protectionist responses from lawmakers, it will do far more harm than good, to the U.S. economy and to American workers. Should Americans be concerned about the economic effects of outsourcing? Not particularly...
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...Outsourcing: America’s Job Killer Javier A. Arocho Axia College of University of Phoenix COM 120 Effective Persuasive Writing Carl L’Esperance August 6, 2006 Abstract In my paper “Outsourcing: America’s Job Killer” I will be covering the effect that outsourcing has on the American people. Job losses, higher unemployment rate, and lower economy are the results caused by outsourcing jobs to foreign countries Try to imagine American’s going to work early in the morning, same routine for over 10 years at the same job. They arrive at their desk to find a memo from their CEO announcing an important meeting taking place that day for all employees. During the meeting their CEO announces that in two weeks their company of five hundred or more employees will be closing for good because they are relocating the business to a foreign country. Now in two weeks they will be unemployed from the job that they gave 10 years of excellent service, and they have to start all over again. This is what happens to hard working American’s when companies decide to offshore their business to foreign countries. Outsourcing jobs to foreign countries create job losses in the United States. American jobs are becoming scarce every year. More companies are deciding to outsource, because it saves them more money. There are people in other countries that are more than willing to work longer...
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...Aircraft Manufacturing Industry Outsourcing in a Global Market Aircraft Manufacturing Industry Outsourcing in a Global Market Table of Contents Table of Contents 1 Abstract 2 Introduction 3 Growth of Outsourcing 5 Benefits of Outsourcing 6 Disadvantages of Outsourcing 8 The Global Market and Aircraft Manufacturing 9 Conclusion 12 Bibliography 13 Abstract The aircraft manufacturing industry is dominated by a few key players: Bombardier, Boeing, and Airbus being the most prominent. It is in a constant struggle to deliver ever more intricate machinery that are safe and reliable - while maintaining a competitive cost structure. With countries such as China and India becoming more commercialized, air travel will continue to grow at a consistent rate; however, steady growth is not without its challenges: rising fuel prices and mounting material costs have forced aircraft manufacturers to look for other ways of maintaining a competitive structure. One way of maintaining a competitive cost structure is through outsourcing of non-fundamental core jobs. This practice has become so prominent with some of the world’s major aircraft manufacturers that the parts used to build planes today come from all over the world. The airline industry is a fairly resilient industry, even with slow economic times the need for people to travel for business and pleasure is still present. Outsourcing of non-core jobs may be the answer for cost efficiencies but can have serious...
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...“Outsourcing-Offshore” Outsourcing is said to have emerged a few thousand years ago with the production and sales of food, tools, and other household appliances. As soon as small communities and societies began to form, people with specialized professions began to trade with each other for goods and services. It can be said that each worker was outsourcing some activities to others. Research shows that even in the industrial age, a few thousand years later, very few companies outsourced any of their operations. Companies in the 1800s and 1900s were vertically integrated organizations, taking care of their own production, mining, and manufacturing from raw materials to finished goods as well as then shipping the goods to company owned retail outlets. These companies often handled their own taxes, employed their own lawyers, as well as designed and built their own buildings without outside assistance. This model does not apply to all companies during that time period, but it gives a general idea of the time. The history of outsourcing portrays that as onshore outsourcing continued manufacturing outsourcing of low-tech items such as toys, shoes and apparel goods began to take place. After this manufacturing higher value items like high-tech components and consumer electronics began to appear. In fact outsourcing history demonstrates that manufacturing was the first activity that began to move to offshore destinations in a quest for lower costs. Globalization began during...
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...The Impact Of Outsourcing On General Electric Commerce Essay The report aims to highlight the impact outsourcing has had on General Electric Company. This paper analyzed GE’s decision to have multiple outsourcing partnerships. The paper also discusses the impact that outsourcing will have on US economy in general. The first part of the paper reveals how outsourcing has led GE to be a cost efficient, productive and profitable company. The findings outlined factors such as the success of GE 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...
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...Name Professor Subject Date Global Managerial Economics The small and medium-sized enterprises (SMEs) form a crucial part of the U.S. economy. The SMEs create the most jobs in the country; they target the ordinary Americans for employment thus making them a very important component of the economy. Without the SMEs, the economy will bleed millions of jobs, adversely affecting the economy. This is the reasoning behind the drive by President Obama to give this sector newly acquired impetus and promote it to create more jobs for Americans and grow the economy. The target of the National Export Initiative (NEI) is to boost the export capacity of the SMEs in the U.S. by supporting them; the administration reasons that this will result in the creation of two million jobs. The intention is good, but the challenge lie in the operationalization of the policy and ensuring it works in the actual market (Audretsch, 100). The international market and the export market is often dominated by the big corporations with many resources to invest; this makes them strong and gives them the ability to compete with the big corporations that are players in the international market. The SMEs form the U.S. lack, the resources, know how, and the experience to compete with the established world trade players form the Europe Union, China, and India. This is where the Export Promotion Cabinet steps in to help the U.S. SMEs succeed in the competitive export market (Audretsch, 101). The cabinet should take...
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...19, 2013 Outsourcing jobs – Does it help or hurt America? Outsourcing is any operation, job, task or process that could be performed by employees within an organization, but is instead contracted to a third party for a significant period of time. In addition, the functions that are performed by the third party can be performed within the organization or any other location. The U.S companies’ hires lower income workers in the emerging market instead of hiring Americans. The advantages of outsourcing are mainly benefiting the U.S companies to be more competitive in the global marketplace by keeping costs low. When U.S companies become less competitive this could usually drive those companies overseas, usually different types of jobs are outsourced for different reasons. My opinion outsourcing falls on the business owners and corporation who basically wants to minimize cost and maximize profits without regards to workers within their country. Some jobs that are outsourced are: Information Technology (IT) Many companies in the United Stated are now outsourcing this position or sometimes workers from other countries are offered visas to work for IT companies in the United States. Human Resources are sometimes outsourced since this would reduce cost to the companies by pooling thousand of businesses. This would lower the cost of retirements, workers compensation insurances, medical benefit plans. The major outsourcing of all is call...
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...Name Professor Subject Date Global Managerial Economics The small and medium-sized enterprises (SMEs) form a crucial part of the U.S. economy. The SMEs create the most jobs in the country; they target the ordinary Americans for employment thus making them a very important component of the economy. Without the SMEs, the economy will bleed millions of jobs, adversely affecting the economy. This is the reasoning behind the drive by President Obama to give this sector newly acquired impetus and promote it to create more jobs for Americans and grow the economy. The target of the National Export Initiative (NEI) is to boost the export capacity of the SMEs in the U.S. by supporting them; the administration reasons that this will result in the creation of two million jobs. The intention is good, but the challenge lie in the operationalization of the policy and ensuring it works in the actual market (Audretsch, 100). The international market and the export market is often dominated by the big corporations with many resources to invest; this makes them strong and gives them the ability to compete with the big corporations that are players in the international market. The SMEs form the U.S. lack, the resources, know how, and the experience to compete with the established world trade players form the Europe Union, China, and India. This is where the Export Promotion Cabinet steps in to help the U.S. SMEs succeed in the competitive export market (Audretsch, 101). The cabinet should take action...
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...with the other business functions such as marketing, finance and human resources management. Strategic means ‘affecting all key business areas’; that is, the strategic role of operations management involves operations managers contributing to the strategic plan of the business. Some of the different costs in the operations function include; input costs, labour costs, processing costs, inventory costs and quality management costs. Cost leadership involves aiming to have the lowest costs or to be the most price-competitive in the market. A key aspect to cost leadership is that although trading with the lowest cost, the overall business should still be profitable. One aspect of cost leadership arises from a business creating economies of scale. Economies of scale refers to cost advantages that can be created as a result of an increase in scale of business operations. Typically the cost savings come from being able to purchase lower cost per unit and from efficiencies created through improved use of technology and machinery. Goods/services differentiation is a key strategy applied by operations managers. Product differentiation means distinguishing products in some way from its competitors. Ways a product could be differentiated include: varying the actual product features, varying product quality, varying any improved features, varying the amount of time spent on a service, varying level of expertise brought to a service, varying qualifications and experience of the service provider...
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