...Social Science Vol. 4 No. 8 [Special Issue – July 2013] Outsourcing: A Review of Trends, Winners & Losers and Future Directions Zafar Iqbal Lecturer Faculty of Administrative Sciences Kotli University of Azad Jammu and Kashmir MSc. University of Bedforshire, UK. Aasim Munir Dad PhD. Scholar The School of Business & Management University of Gloucestershire Cheltenham, GL50 2RH. Abstract The primary objective of this paper is to analyse the outsourcing trends in last one decade and to forecast the future on the basis of past studies. In this paper concepts and trends about outsourcing has been discussed on the basis of past studies. An extensive amount of literature review has been done to obtain the objective. This paper demonstrates the previous literature and findings. Outsourcing has become inevitable and virtually many of the multinationals are outsourcing to utilise scarce in-house resources. In this research it is being observed that owners of the companies are the prime winners in outsourcing and off shoring situation. Further, a detailed review of literature indicates that along with many other motives cost factor cause major influence in outsourcing decisions. There is an ultimate outcry over the jobs going overseas from industrialized nations such as United States, the UK and the western World. However, the net economic gains for these countries are growing, and outsourcing to an offshore destination will be on the rise for the foreseeable future...
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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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...Is Offshore Outsourcing of Medical Business Practices Ethical? Abstract The healthcare industry is one of the largest in the United States. The United States spends an estimated $2 trillion annually on health care expenses, more than any other industrialized country (Johnson, 2010). The growth of this industry is expected to continue well into the future. However, today more than ever, healthcare providers are faced with many financial pressures. Offshore outsourcing offers companies substantial savings on costs which improves profitability. Managed care organizations and healthcare providers realize how outsourcing business processes to experts allows them to focus on their core business without worrying about back-office functions (Namasivayan & Bell, 2006). Despite the cost savings, it is important not to overlook some of the issues that may be associated with outsourcing. Is Offshore Outsourcing of Medical Business Practices Ethical? The healthcare industry is one of the largest in the United States. The United States spends an estimated $2 trillion annually on health care expenses, more than any other industrialized country (Johnson, 2010). The growth of this industry is expected to continue well into the future. As the baby boomer population gets older and medical treatments become more and more advanced, those needing medical care will increase exponentially giving rise to an already growing field. Yet, despite...
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...MIS assignment What is meant by Global outsourcing? What is difference between global outsourcing and simple outsourcing? Global Outsourcing Sourcing: Sourcing is the act through which work is contracted or delegated to an external or internal entity that can be physically located anywhere. It encompasses various in sourcing or outsourcing arrangements such as offshore outsourcing, captive off shoring, near off shoring and on shoring. Outsourcing: Outsourcing is defined as contracting with the third party provider for the management and completion for the certain amount of work for certain length of time, cost and level of service. Global Outsourcing: Global outsourcing is a management strategy by which an organization delegates major, non-core functions to specialized and efficient service providers. Global outsourcing represents a significant shift in the way organizations manage and staff their business support activities. Global outsourcing is enabling business without barriers in a borderless world. As enterprises think global, their outsourcing models have changed to follow suit. Outsourcing is no longer just a short term quick-fix to achieve cost reduction. Global outsourcing uses a blend of onsite, offshore and near shore outsourcing solutions to achieve strategic business objectives for the outsourcing company. Today, there are job titles like "Chief Globalization Officer" and "Strategic Services Manager" - which just goes to show that organizations are...
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...increase 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-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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...INTRODUCTION Global outsourcing of information technology is a phenomenal business strategy for most countries all over the world, especially the developed. Companies within these states have limited development areas and resources to erect facilities that will maintain all levels of products and services development within the state, hence the aspect of offshore mergers. Various reasons as (Carmel &Nicholson 2005) identifies are as a result of cost reduction strategies due to easy and cheap transit of information and other related products. Edgell, Meister and Stamp (2008, p. 174) argue that, rise of outsourcing is based on cost benefits since most business operations operate on cutting cost of production to realize mass turnover. More so, the technological advancements that are realized as time progresses enhances the move to collaborate with other companies to offer manpower and skills aligned with corporate policies and standard of quality expected. The approach implemented by management determines the effectiveness of its decisions such that planning the whole initiative inclusive of proper funding and monitoring the business results for success (Willcocks 2010). To realize cost reduction, relationships must be developed and maintained first, since a good business relationship is the root of success for any business client and the partner (Weeks & Feeny 2011); therefore cost instills the urge of outsourcing while relationship development offers a conducive environment...
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...(UMUC) Offshore Outsourcing: Reducing Cost, Sacrificing Quality Nick Blasetti AMBA 600 Ralph Masi May 12, 2015 Executive Summary Offshore outsourcing is a growing trend in today’s business world. Many large, fortune 500 companies are sending a majority of their low skilled jobs overseas to reduce labor costs. This process is leading to many negative impacts on consumers and workers. Consumers are now being put at greater risks and experiencing poorer service, while workers are losing their jobs and struggling to find new ones. Workers are also now forced to interact with many foreign employees. The language barrier between domestic and international employees hinders working relationships, and even decreases productivity. Many companies who initiate outsourcing have received negative reactions from employees and reductions in morale. Even with the very apparent negative impacts of outsourcing, companies are continuing to outsource more and more work. The reason: reductions in labor costs outweigh everything else. Companies may be sacrificing their integrity for increased profits, but with so many companies outsourcing, they really have no other choice. Their workers and consumers may be unhappy, but in order to remain competitive they must follow suit. Consumers and workers will be forced to adapt with the changing times by increasing their skills to avoid losing their jobs. Offshore outsourcing is not going anywhere,...
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...Service Sector Jobs Sheila Brown Busb 315 University of Texas Abstract Outsourcing is the agreement of diverse functions, such as data entry, programming, facilities management, disaster recovery, and telecommunications management, to outside providers of services. The main reason why organizations implement outsourcing is cost reduction, to leverage themselves ahead of their competitors, and as a means to increase their adaptability to changes in the business world. Outsourcing also provides the ability to benefit from the advances in information technology, while focusing on core business activities of the organization. Not only does outsourcing information technology functions enable increased concentrated efforts toward the organizational mission, but if skillfully planned and properly managed, contributes to healthy growth in the company’s fiscal bottom line. The implementation of offshoring has affected the competition and the expansion of the business service industry in an increasingly accessible and competitive global world. The effect of Outsourcing Within The Business Services Industry The business service industry has been impacted with intense pressures of reducing costs while also increasing new customers and introducing new products to create a center of attention to those customers. Lately, more companies are implementing offshoring strategies (i.e. outsourcing of operations to foreign countries) to cut costs. However there is some empirical...
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...No. 2005-12-A Office of Economics Working Paper U.S. International Trade Commission Growth in Services Outsourcing to India: Propellant or Drain on the U.S. Economy? William Greene* U.S. International Trade Commission January 2006 *The author is with the Office of Economics of the U.S. International Trade Commission. Office of Economics working papers are the result of the ongoing professional research of USITC staff and are solely meant to represent the opinions and professional research of individual authors. These papers are not meant to represent in any way the views of the U.S. International Trade Commission or any of its individual Commissioners. Working papers are circulated to promote the active exchange of ideas between USITC Staff and recognized experts outside the USITC, and to promote professional development of Office staff by encouraging outside professional critique of staff research. Address correspondence to: Office of Economics U.S. International Trade Commission Washington, DC 20436 USA No. 2006-01-A OFFICE OF ECONOMICS WORKING PAPER U.S. INTERNATIONAL TRADE COMMISSION Growth in Services Outsourcing to India: Propellant or Drain on the U.S. Economy? William Greene U.S. International Trade Commission January 2006 The authors is with the Office of Economics of the U.S. International Trade Commission. Office of Economics working papers are the result of the ongoing professional research of USITC Staff and are solely meant to represent...
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...not understand what the operator had said. She asked, “is this the Computer Company (fictional name)”? The customer service representative responded that it was, at least she thought that was what they said. The representative who answered her call had such a thick foreign accent that she could not understand them. She explained to the representative what the problem was, but she could not understand any of the information given to her. She asked to speak with a different representative; after being placed on hold for several minutes, she had no better luck with the new representative. She and her husband tried several more times to communicate with them, finally hanging up in frustration. They vowed to never purchase another thingamajig from the Computer Company again. They have just experienced offshore outsourcing. Offshore outsourcing of customer service is unethical and may have negative effects on the economy. Outsourcing customer service is companies hiring other firms to perform their customer service operations for them. Offshore outsourcing is contracting with firms in other countries. Offshore outsourcing is also known...
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...NTRODUCTION Global outsourcing of information technology is a phenomenal business strategy for most countries all over the world, especially the developed. Companies within these states have limited development areas and resources to erect facilities that will maintain all levels of products and services development within the state, hence the aspect of offshore mergers. Various reasons as (Carmel &Nicholson 2005) identifies are as a result of cost reduction strategies due to easy and cheap transit of information and other related products. Edgell, Meister and Stamp (2008, p. 174) argue that, rise of outsourcing is based on cost benefits since most business operations operate on cutting cost of production to realize mass turnover. More so, the technological advancements that are realized as time progresses enhances the move to collaborate with other companies to offer manpower and skills aligned with corporate policies and standard of quality expected. The approach implemented by management determines the effectiveness of its decisions such that planning the whole initiative inclusive of proper funding and monitoring the business results for success (Willcocks 2010). To realize cost reduction, relationships must be developed and maintained first, since a good business relationship is the root of success for any business client and the partner (Weeks & Feeny 2011); therefore cost instills the urge of outsourcing while relationship development offers a conducive environment...
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...part 3.1 Outsourcing definition and types 3.2 Outsourcing and its effect on business 3.3 Outsourcing pros and cons 3. Conclusion 4. Bibliography Introduction The term outsourcing comes with many preconceived connotations, both positive and negative, thus the study of the mechanisms for effective use of outsourcing as a business development tool is also clouded with these perception issues. Much of the academic study of outsourcing revolves around trying to determine if it is a good thing or a bad thing, whether it is harmful to the local workforce or beneficial to globalization, and whether the average company has an obligation, moral or otherwise, to consumers in its home town, state or country to use labor within that region. None of those topics are pertinent to the discussion here and are therefore being immediately excluded. That is not to say that these are not pertinent and valid area of research in their own right, only that they are tangential to this discussion herein. This review will focus on outsourcing as it relates to control mechanisms within company development. Specifically, this paper will attempt to identify the link between control mechanism and outsourcing within the framework of managerial accounting. Outsourcing, literally, is the use of an external source to perform a business function instead of having an employee do it using company equipment. In its simplest form, outsourcing is paying a cleaning...
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...Offshoring, also known as offshore outsourcing, is the term that is used to describe the practice among companies located in the United States on contracting businesses beyond U.S borders to perform services that would otherwise have been provided by in-house employees in white-collar occupations. The term can be applied to U.S. firms that are offshoring the jobs of blue-collar workers on textile and auto assembly lines, for example, which has been taking place for decades. The extension of offshoring from U.S. manufacturers to facilitate providers has heightened public policy concerns about the extent of job loss and foregone employment opportunities among American workers. This concern was especially relevant to policymakers because of the national unemployment rate persistently exceeding 9% despite the end of the Great Recession in June 2009 . The outsourcing of service sector jobs from the United States was a response to the early 1980s recessions when employers narrowed their focus to the company’s core mission and contracted peripheral activities (e.g., janitorial duties) to other U.S. businesses. The 2001 recession caused employers to seek further efficiencies by tapping into the global supply of labor. U.S. businesses were able to outsource overseas the jobs of white-collar workers in some service providing industries as a result of widely disseminated technological advances that permit low cost, good quality, and high speed transmission of voice and data communications...
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...of quantitative data are scores on achievement tests, number of hours of study, or weight of a subject. These data may be represented by ordinal, interval or ratio scales and lend themselves to most statistical manipulation. Qualitative data cannot be expressed as a number. Data that represent nominal scales such as gender, socieo economic status, and religious preference are usually considered to be qualitative data. Both types of data are valid types of measurement, and both are used in education journals. Only quantitative data can be analyzed statistically, and thus more rigorous assessments of the data are possible. Katrina’s Candy’s would use the exploratory method. Exploratory research is research conducted for a problem that has not been clearly defined. It often occurs before we know enough to make conceptual distinctions or posit an explanatory relationship. Exploratory research helps determine the best research design, data collection...
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