[Brielle Buckler]

Few topics associated with global trade are more vehemently debated than outsourcing. For this discussion, you will watch two video clips that provide some perspective on outsourcing. Using the information you gain from the videos and the materials you studied in the course module, respond to the discussion question below.

This video clip is from the film Outsourced. It covers American sentiment on losing jobs to India and the availability of Chinese goods. We want cheap stuff; however, most of it comes from China.

As countries like China and India become leaders in manufacturing, the costs of their expertise rises, diminishing their advantage against U.S. counterparts. At the same time, convoluted and increasingly risky supply chains dependent on inexperienced vendors have turned once stable brands like Boeing into the perfect “reshoring” case study. This video explains why outsourcing can be bad for business.

OPTION 1:
Select ONE of the following perspectives on outsourcing, and answer the related questions. Although your opinion is always valued, be sure to support your opinion with facts obtained from your course materials, the videos, or a reliable source. Make sure to cite your sources.

• The consumer: Does the consumer benefit? Are prices lowered by outsourcing? Why or why not?
• Efficiency and productivity: Does outsourcing enhance efficiency and productivity? Why or why not?
• Competition: Does outsourcing encourage competition? Is this a good thing? Why or why not?
• Developing countries: Does outsourcing benefit developing countries? Why or why not?
• International stability: Does outsourcing foster international cooperation, respect, and stability? Why or why not?

OPTION 2:
You can also choose to interview a friend or family member who owns a small business or works for a large company. Ask them what services their organizations outsource or offshore. Why do they do so? What benefits does it bring their business? Did they make the decision to outsource or offshore? Do you have a friend or family member who lives in another country than the US that does work for a US-based company (customer service, manufacturing, etc.)? What is their perspective on their work?

In your response, you should list the questions you asked and the answers OR tell the story from their perspective. Then, form your own opinion: is offshoring and/or outsourcing as bad as it is portrayed in the media? Why or why not?

 

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In order to receive full credit for this assignment, all components of this assignment are due by 11:59pm ET on Sunday, February 19, 2023. You should first contribute a thoughtful post of your own before viewing/commenting on the posts of others. You must respond meaningfully to at least two classmates to receive full credit for this assignment.

This assignment is worth a total of ten (10) points — 6 possible points for your original post, and up to 2 points for each of the two responses to your classmates’ posts. Please reference our Discussion Rubric for more information, and to this guide from MSSU to learn more about what it means to respond meaningfully to a classmates’ post.

Source: Lumen Learning

• This topic was modified 2 years, 2 months ago by Brielle Buckler. Reason: Republish
• This topic was modified 2 years, 1 month ago by Brielle Buckler.

[Alyssa Apperson]

The consumer: Does the consumer benefit? Are prices lowered by outsourcing? Why or why not?

The consumer does benefit, in most cases, when it comes to outsourcing. When a country agrees to become a trading partner with another country, it allows for a product to be produced at a cheaper cost which, in turn, allows for the product to be sold at a cheaper price. Entering a global trade also allows a company to reach more consumers- another win for the consumer. However, in very specific cases, outsourcing can create higher prices for the consumer. For example, we outsource our avocados from Mexico. In 2022, the US suspended imports from Mexico due to a US official receiving some sort of threat. While the government reinstated imports relatively quickly, the US still saw a ~15% temporary increase in avocado prices (source attached below). The avocados are also highly effected by the weather which allows for more risk in price increase. While outsourcing does a lot of good for the consumer, there is still a risk element to this.

In emptying my backpack, all of my pens and one pencil is made in Japan, my pen case is made in China, and my eraser is made in Japan. I knew that a lot of the things we know and love are outsourced but it is cool to see how some of my daily things are not made in the USA.

https://www.cnn.com/2022/05/05/business-food/avocado-prices/index.html

[Emely Gutierrez]

Hey Alyssa,

I do agree that there are good and bad things about outsourcing. I know a lot of small businesses who outsource and it’s usually from china. Because of it’s cheaper cost rate and shipping rates. And also the fact mostly everything we use is from china!

 

 

[Osman Goni Rifat]

As a consumer, I’d say outsourcing is good. Just think, what the price of an Iphone would be if it was manufacturer in the US. I think outsourcing makes some things more affordable.

[Randy Marte]

Hey Alyssa,
Great job on explaining the benefits of outsourcing for the consumer. It’s important to note that outsourcing can lead to lower prices and greater access to products, especially when entering into global trade agreements. However, it’s also important to acknowledge that there can be specific cases where outsourcing can lead to higher prices for the consumer, such as when there are disruptions in the supply chain. Overall, it’s important to weigh the benefits and risks of outsourcing when considering its impact on the consumer.

• This reply was modified 2 years, 1 month ago by Randy Marte.

[Adrian Forrester]

Hey Alyssa, I agree many companies use outsourcing. It can be a good and bad thing. I feel there are more upsides than downsides due to the easy accessibility of products outsourced from other countries. without outsourcing many products we use on a day to day basis may be scarce and production rates would fall due to the expense of producing in the U.S. Great post and use of a personal experience/example.

 

 

 

[Taylen Johnson]

Hi Alyssa I definitely agree

 

[Raphi Munoz]

Develop products in a country that is cheaper to manufacture will cost low in the cost of manufacturing products. This is call globalization;People and country and exchange information and goods more quickly. Globe: worldwide coming together of country and nations. People in different countries work for very little money to make the product available to a right price. Is cheaper to produce in a poor country. Companies have competition so, therefore companies have advantages to produce products in cheaper price that customers can get a good deal. globalization impact the earth too. Planes, truck and ships are producing carbon dioxide so, the atmosphere will be polluted. It cause earth global warming. Jobs too; people can lose their jobs because of cost.

[Shomari]

 

This help get a better understanding of globalization, this tactic is very helpful in many ways for consumers and the way of living. We depend on certain products in the country like clothes and automobiles. If United States change manufacturers we will see a big price increase for sure.

[Emely Gutierrez]

Efficiency and productivity: Does outsourcing enhance efficiency and productivity? Why or why not?

According to the article thrive global outsourcing has received a bad reputation. A bad reputation in sending jobs to other countries and increasing the unemployment rate. But It is said to be that outsourcing indeed does enhance efficiency and productivity. This is because it doesn’t mean less jobs for people. It is considered the best decision for companies directly and indirectly. It allows employees to focus on what they do best. Which would be them focusing on more meaningful tasks. So at the same time of it increasing productivity, it’s also increasing efficiency.

Perks of outsourcing according to thrive global is that that it allows businesses to reach their objectives , add more values and make less risks. It reduces risks and liabilities. Also there are some things to be kept in house but the benefits of outsourcing seem to be greater.

Also according to another article bobcares, outsourcing will be hiring out teams that specialize in those specific tasks. Benefits for outsourcing are reducing expenses, flexible scalability and access to skill professionals. As said again it increases effectiveness and helps the focus be on core activities such as product development.

https://community.thriveglobal.com/why-outsourcing-is-best-for-workplace-productivity/#:~:text=Outsourcing%20helps%20increase%20productivity%20in,honest)%20job%20satisfaction%20for%20employees.

Outsourcing Strategically to Increase Efficiency and Productivity

[Osman Goni Rifat]

• Developing countries: Does outsourcing benefit developing countries? Why or why not?

I have two different opinions on this topic. First, I will explain why outsourcing benefit developing countries. Outsourcing involves contracting with other company (in/outside country) to perform some business related task. When it comes to business, the main strategy is to lower the cost as much as you can to maximize the profit. The developing countries take this advantage of outsourcing. They outsource their tasks from countries like India, China, Bangladesh maintaining the quality of the product and maximize the profit. For example, if you go to H&M, most of the cloths are form India/Bangladesh. Also Apple, manufacturers a huge portion of their devices from Foxxcon, China. They minimize the manufacturing cost.

The second vide clip has a good explanation of why outsourcing is not good. When a developing company decide to outsource, they allow foreign companies a great deal of insight into the process. Samsung used to have a Japanese outsource partner ended up losing intellectual property. Also, when workers getting loads of clients, they are raising the price. This one more factor for developing countries should not outsource.

[Randy Marte]

Hey Osman,

Great job presenting both sides of the outsourcing debate. While outsourcing can lower manufacturing costs and increase profits for developing countries, it can also lead to the loss of intellectual property and increased prices. It’s important to weigh the benefits and risks before planning a decision.

[Juana Bazan]

Hi Osman,

Great work! This explanation is very well-detailed and teaches how outsourcing can vary based on a variety of factors. It is very important to analyze and weigh the advantages and disadvantages of participating in outsourcing

[Randy Marte]

Efficiency and productivity: Does outsourcing enhance efficiency and productivity? Why or why not?

Outsourcing can enhance efficiency and productivity in some cases, but it’s not always a guarantee. Outsourcing can bring in external expertise, technology, and resources that may not be available in-house, leading to better quality and faster completion of tasks. However, outsourcing can also introduce communication barriers, cultural differences, and quality control issues that can slow down the process and lower productivity. The success of outsourcing depends on various factors, including the nature of the task or service, the selection of the outsourcing partner, and the management of the outsourcing relationship. For example, a study published in the International Journal of Operations & Production Management found that outsourcing manufacturing processes can lead to improved efficiency and productivity, but only if the outsourcing partner is carefully selected and closely monitored. The study looked at a case of outsourcing in the electronics industry and found that companies that effectively managed the outsourcing relationship experienced cost savings, faster delivery times, and higher product quality compared to companies that didn’t outsource or had poor outsourcing management practices.

[Nickos]

Hi Randy,

You brought up a great point about how sometimes outsourcing can introduce communication barriers. At the company I work at, we outsource our IT helpdesk to India and sometimes there are minor communication issues when trying to explain the issues. I know that several of my colleagues have talked about how frustrating it is sometime to have an issue with their computer and then still have to explain over and over again what is wrong. However, patience and kindness goes a long way and something as simple as just speaking slower when explaining the problem helps the other person understand better. For us, outsourcing the IT helpdesk has saved a tremendous amount of money and allowed us to resolve issues 24/7.

[Adrian Forrester]

Hey Randy,

Great post. Outsourcing is really a major part of the production of goods in almost all businesses in the world. Though there are downsides, outsourcing has become a great way to increase productivity and overall quality of products. Many things needed for a product can’t be found in house and outsourcing is a great way to acquire these things and also build relationships between other businesses

[Nickos]

I chose to go with option 2 in this assignment and interviewed my fiancee’s niece who lives in Vietnam and works at a manufacturing plant for active wear such as Lululemon. Here is a translation & general summary of our conversation:

• Question: What is your role at the plant and how long have you been there?
  • Answer: I’ve been working at the plant for a little over 2 years, my main role is trimming any excess thread from clothing articles. I usually spend my entire shift examining seams of the clothing and using small scissors to trim anything that is excess.
• Question: How long are your shifts and how much do you get paid?
  • Answer: My shifts range depending on how busy we are, usually I work anywhere from 9-12 hour days. I get paid about 6 million Vietnamese dollars a month (~250 USD).
• Question: 12 hours is a long time, do you guys get breaks or any sort of rest periods?
  • Answer: Yes, we get breaks to eat and the work is fairly easy and not too labor intensive. I do have friends who work in other factories that are much worse – so my job is a breeze compared to that.
• Question: What are the conditions like at your job?
  • Answer: They’re quite nice, the building shields us from the rain during the monsoon months so it is nice to go to work where you aren’t exposed to the elements. In the summer it does get pretty hot – but we have fans. I don’t work with any of the machinery so I can’t comment on how safe that part of the building is. Our section is just a rows of tables and workers cutting up thread.
• Question: Do you like your job? Is this something you hope to do for a long time?
  • Answer: I consider myself lucky, like I said, my job is pretty easy and the pay is reasonable for the work done. I don’t see myself doing this forever but for now it is stable. I hope to save up and maybe one day open my own alteration shop. I’m still young so this is good experience and it pays the bills. I have other friends who work more labor intensive jobs in the rice fields and tending after animals, I think I would rather do this instead.

Based on my short interaction with our niece, she seems content and happy with her role. Most of her family is based in the rural country side and make money through avenues such as farming and livestock. She seems to compare her life to those of her siblings who wake up every day at 5-6 am, tend to the fields and exposed in the harsh elements, and sees that her job is fairly simple and not nearly as labor intensive. When I did tell her that some of those Lululemon leggings go for half of her salary here in the US, she was in shock and did not realize that. In a sense, she was blissfully unaware of how her labor was being exploited. It was a light hearted conversation between us, but left a bitter sweet taste in my mouth when I realized that 2 of Lululemons leggings is how much she gets paid a month. It does raise the ethical question – just because we can pay less for some else’s labor and profit from it . . . should we? Getting paid $250 for a whole month’s work is abysmal in US standards, but to her it was a reasonable amount and was able to sustain her lifestyle. In our niece’s case, it appears that her working conditions were not nearly as bad as what is depicted in the media and she was content with her work and pay – though she did hint that this was not always the case.

 

[Adrian Forrester]

Efficiency and productivity: Does outsourcing enhance efficiency and productivity? Why or why not

Outsourcing can potentially enhance efficiency and productivity, but whether it does so depends on a variety of factors. When a company outsources a task or function, it typically does so to a specialized provider who can perform the task more efficiently and effectively than the company could do in-house. This can free up the company’s resources and allow it to focus on its core competencies, which can ultimately increase productivity. Additionally, outsourcing can help a company reduce costs, as the specialized provider may be able to provide the service at a lower cost than the company could do in-house.

However, outsourcing can also have its downsides. If not managed effectively, outsourcing can lead to decreased quality, as the specialized provider may not fully understand the company’s culture or standards. Additionally, outsourcing can lead to a loss of control over the outsourced function, which can make it difficult for the company to respond to changing needs or opportunities. Furthermore, outsourcing can create communication barriers and coordination challenges, especially if the outsourced function is located in a different country or time zone. Therefore, companies need to carefully consider the potential benefits and drawbacks of outsourcing before deciding to pursue this strategy.

 

[Shomari]

Your post is very insightful, weighing out the factors on different point of views, I can see how outsourcing can help reduce cost and lead companies to focus on more important things that can help to their company be more successful. But there is a downside without taking the proper precautions.

[Shomari]

Outsourcing will benefit the consumer more since the product is being made at a higher rate for a lower cost. For example, the united states get it’s bananas by making trades with Ecuador. Since the country can make and ship bananas at a faster rate with out using a bunch of resources, it becomes more profitable to the United States and can help save the country a lot more money than buying from another country. Then the prices for bananas won’t sky rocket because of the limited of resources being used to make the trade. Say if the bananas was made in the United States, the bananas will cost cost more based on the resources the United States need to pull in. Since in the U.S. companies will need to pay laborers more, give out health insurance, and slowly need to increase the consumer price on bananas just to meet the demand for buyers. Outsourcing will benefit the consumer more since buying it from country that requires less resources will cost less.

https://www.coursehero.com/study-guides/wmopen-introductiontobusiness/globalization/

[Justin]

I agree with outsourcing benefiting the consumer because of the factors you mentioned. It was a great idea to use the banana production involving the U.S. and Ecuador because it opens the eyes of a reader to understand what type of business is going on and how the business is performed. This means how the companies or countries interact or use one another to benefit themselves somehow and get an edge.

[Keanu Soto]

• Developing countries: Does outsourcing benefit developing countries? Why or why not?

I do not believe that outsourcing benefits developing countries. Outsourcing occurs when an entity contracts out a business process to another entity. The Textbook gave a great example of India being the largest source of tele-service employment, largely in part of their large population and cheaper salary. I don’t think this is benefitting developing countries more so the businesses. You have these large companies who end up making more due to outsourcing, but rather return those savings to the newly employed in these countries, it goes to the companies capital gain.

 

[Justin]

You kept it very simple and straight to the point. I like how you were able to clearly state your opinion and use the textbook to support your claim.  An example from the textbook in India really shows how outsourcing can and can not be beneficial to a company. This helps you clearly state your point of view.

[Juana Bazan]

Hi Keanu Soto,

 

Although there can be many advantages to outsourcing there are also disadvantages of outsourcing. It is interesting to see how outsourcing does not help developing countries. Since it leads to work labor and cheaper salaries.

[Justin]

Outsourcing does encourage competition because it will increase productivity and allow other companies to want to sell more of their competing products. When competition rises, the other companies will look to try to catch up or improve their flaws as well. This can also allow the company to put itself into a hole. when outsourcing the company may use different materials and the product may result in a lower quality product. This creates competition for two reasons. Getting new employees to replace those and do things their way will cost and the different ways of manufacturing a product will affect their products quality. This can lead to bad reviews and the company going on a decline in sales/revenue. Competition can be a great thing and a bad thing. It is a positive thing because it allows people to see the differences between other companies. This allows them to improve and flourish in their own lane of their production company. However, if you have a lot of low quality products or expensive products, the competition may be more challenging to be on top than others of course.

[Juana Bazan]

Q.The consumer: Does the consumer benefit? Are prices lowered by outsourcing? Why or why not?

The customer benefits from outsourcing because free trade is enhanced, the destination country gains jobs, and the origin country gets cheaper goods and services. Therefore, a country agrees to become a trading partner with a different country. This allows for a product to be produced at a cheaper cost and then the product sold for a cheaper price in a different country (let’s say the USA). Although there can be some disadvantages to outsourcing, the advantages can be better.

I went through my bookbag and noticed that most of my items are manufactured in China, Mexico, and Japan. It is interesting to know that Amazon has become one of the large trading markets for products manufactured out of the USA.

Source https://www.coursehero.com/study-guides/wmopen-introductiontobusiness/global-business-strategies

• This reply was modified 2 years, 1 month ago by Juana Bazan.
• This reply was modified 2 years, 1 month ago by Juana Bazan.
• This reply was modified 2 years, 1 month ago by Juana Bazan.
• This reply was modified 2 years, 1 month ago by Juana Bazan.

[Roshanna Young]

Hi, Justin

Great job on elaborating on the result of healthy competition.

 

[Taylen Johnson]

When it comes to outsourcing, the consumer typically benefits. A product can be produced at a lower cost when a country accepts to trade with another country. This, in turn, enables the product to be sold at a lower price. A corporation can reach more customers by engaging in international trade, which is another benefit for the customer. Yet, outsourcing can result in increased consumer pricing in some very specific circumstances.

For example, America outsources billions of alcoholic beverages from France.

 

”Another significantly outsourced product from other countries is alcoholic beverages, such as wine, beer, and hard liquor.

Stacker reports, “The US imports billions of alcoholic beverages annually, with France being its main import source for hard liquor.”

USDA also lists alcoholic beverages as one of America’s highest imports.”

 

[Juana Bazan]

Hi Taylen,

Great work at explaining how outsourcing can benefit the customer. In this case, America outsources billions of alcoholic beverages from France. Alcoholic beverages are already high in price depending on the demand for the product. Can you imagine if we did not have outsourcing? The prices might be off the roof.

[Roshanna Young]

The consumer is able to benefit unless there are situations in which workers began to realize their value and waged go up between 10- 20 percent a year. Outsourcing can be a great solution if planted somewhere cheaper, but as the example given in the video if its somewhere that employees are treated poorly you’ll eventually have to outsource once again. Cheaper doesn’t always mean better in a case such as this.

[Emely Gutierrez]

Hey Syed,

I do agree a consumers do benefit from outsourcing. Cheaper rates in everything. I think everyone would much rather pay a cheaper rate. Especially now since there’s an inflation everywhere. Im sure outsourcing will be the key to a businesses success.

 

[Osman Goni Rifat]

This video is a great example why outsource benefits the consumers. Business is all about cutting the cost and maximizing the profit. H&M is one of the renowned brand of the US because they provide fashionable cloths in such a low price. Have you wondered why that’s possible? If you look at the tag of H&M, they are mostly made in the Bangladesh, India. Because they pay such a low price in manufacturing them even in such a low price they are able to cut a good profit.

[Nickos]

Hi Syed,

I agree with your sentiment that when it comes to price, cheaper is always better for the customer. However, I also think sometimes quality over quantity is the way to go. For example, if you purchase an phone charging cable that was manufactured using cheap labor and components it would still the do the same job as one that is more expensive. What sometimes happens is that the cheap one that you bought for $10 might last you 1 month whereas the higher quality one you bought for $30 will last you 6 months. So in time, you’d be buying more of the cheap one and it would end up costing more. The same goes for clothing and many other goods.

[Roshanna Young]

Hi, Osman

Your use of H&M is such a clear example.

[Author]

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