Essay
Generally speaking, are you for or against outsourcing outside?
According to Campanelli and Panayides (2005), ‘most of the literature on outsourcing does not provide a rigorous definition of this phenomenon and is not clear whether or not it refers to trading in goods and/or services’.
Personally I see outsourcing as a cross-border employment of specialist in the areas of goods production and service provision.
Though ‘the decision by firms to outsource is often driven by as well as drives (i.e., is influenced by and facilitates) the emergence of specialist organizations in various fields’ (Varadarajan, 2009), I am against outsourcing overseas. It is so because I believe that
Outsourcing overseas takes jobs from millions of people which is really bad if we consider the existing rate of unemployment.
It is really a task to make people employed from overseas feel the responsibility the way they should and almost impossible to make them stick to the set standards of work and keep the quality required up to the level.
Outsourcing overseas makes no good from the point of innovative researchers and developments for the country.
Lowering of production and service costs might result in huge losses for the company what makes outsourcing overseas not profitable at all.
Generally speaking, what are the pros and cons to outsourcing overseas to a developing nation?
Some companies (no matter whether they are large corporations or small firms) can benefit from outsourcing as one of the popular ways of doing business all over the world.
If to consider the pros of outsourcing production of goods or services overseas to a developing nation, I am to speak of:
the possibility to reduce costs of production and service both for the company and the consumer,
the opportunity to hire talented workers from all over the world in order to achieve the desired goals and perhaps, get greater results than it was planned or expected,
the chance for a firm to become more profitable and more effective,
the opportunity to enter the global market.
If to consider the cons of outsourcing overseas to a developing nation, I am to mention the risks involved. This way or another, ‘to make inputs in-house, or buying them in the market, is one of the fundamental dilemmas’ (Moretto et all, 2012).
The variety of messages posted at the website www.debate.org, and the result of the debate on whether outsourcing job to other countries is bad for America demonstrate that 68 % of people involved in the debate are against it (Debate on whether outsourcing job to other countries is bad for America). I completely agree with their arguments and believe that once a company decides to outsource overseas, it risks:
its reputation,
money invested,
loss of the quality of production or service
Should Jenny focus on her own job and career at Company XYZ or should she challenge the CEO based upon her own personal value and principles?
If to speak of Jenny, I have no doubt that she should concentrate on her own job and career and she should challenge the CEO based upon her own personal value and principles at the same time.
I think that the professor whom Jenny addressed for a piece of advice was absolutely right when advised her to conduct CAGE Distance analysis as it might help to bring out the possible shortcomings of the decision to outsource overseas. Moreover, the effects of outsourcing on the labor market in the short run might turn out to be nonprofitable at all. I think that thorough analysis might help Jenny to concentrate on her professional activities and challenge the CEO as well.
What are some potential problems with outsourcing to India?
According to Jagdish and Arvind (2004), India is by far the largest provider to date of offshore Mode 1 services. Nevertheless, there still remain some potential problems with outsourcing to India:
First of all, quality standards are much lower if compared to those of the USA.
Customer service might lose its quality.
Service or production usually requires more time.
Outsourcing to India may result in some unexpected expenses and costs (thus, for example, the cost of outsourcing to India may become higher if the company might need to train specialists).
Production of goods might be connected with global environmental issues as well.
We also should not forget about the fact that cultural differences might result in the negative outcome of outsourcing to India. People belonging to different cultures view responsibility differently. What might seem to be normal for an American, can never be accepted by an Indian or vice versa.
What are some alternative solutions to this case study so employees do not have to be laid-off?
There are some alternative solutions in order not to have employees to be laid off and to let Company XYZ save the money:
If the financial difficulties the company experiences are of short-term character, one solution is to offer some temporary layoffs. It might help to reduce the costs for some certain period of time and not to lose the specialists.
Another way to save the situation is to reduce the wages. At this point it is vital to have employees who are really loyal to the company and are able to have open communication and obvious understanding between top management and other employees.
Reduction of wages is also possible if the employer decides to go for the reduction of hours. In spite of the fact that not all employees might like it, hours or wages reduction might save them jobs and some particular level of income.
References
Andreopoulos, Guiliana Campanelli and Panayides, Alexandros. (2005). Outsourcing: Who gains in the short run? International business and economics research journal, ISSN 1535-0754, Volume 4, Issue 6, pp. 1-6.
Bhagwati, Jagdish and Panagariya, Arvind. (2004). The muddles over outsourcing. The Journal of Economic Perspectives, ISSN 0895-3309. Volume 18, Issue 4, pp. 93-114.
Debate on whether outsourcing job to other countries is bad for America. Retrieved form http://www.debate.org/opinions/is-outsourcing-jobs-to-other-countries-bad-for-america?ysort=3&nsort=1
Moretto, Michele and Rossini, Gianpaolo. (2012). Flexible outsourcing. Managerial and Decision Economics. ISSN 0143-6570, Managerial and Decision Economics, Volume 33, Issue 1, pp.47-59.
Varadarajan, Rajan. (2009). Outsourcing: think more expansively. Journal of business research, ISSN 01418-2963, Journal of business research, Volume 62, Issue 11, pp. 1165-1172.
