Course: BUS 104-A050 | Intro to Business | Professor Buckler | Fall 2022

Outsourcing & Offshoring

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    • #13986

      Brielle Buckler
      Participant

      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.

      For Discussion
      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?

      ————

      In order to receive full credit for this assignment, all components of this assignment are due by 11:59pm ET on Sunday, September 25, 2022. You should first contribute a thoughtful post of your own before viewing/commenting on the posts of others. Students should review others’ submissions and comment meaningfully (refer to this guide from MSSU for reference) to at least two other students. For reference, here is the difference between a comment and a post — you will be using both for this assignment.

      Once you submit your post, you must respond meaningfully to at least two other classmates’ threads. 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.

      Source: Lumen Learning

      • This topic was modified 1 month, 2 weeks ago by Brielle Buckler. Reason: Republish
      • This topic was modified 1 month, 2 weeks ago by Brielle Buckler. Reason: Republish
      • This topic was modified 1 month, 2 weeks ago by Brielle Buckler. Reason: Updated Links
    • #14602

      Saleh Sharhan
      Participant

      The discussion of this week will be in regard to the fourth unit of this course. The question discussed will be whether outsourcing increases efficiency and productivity,

      The asked question seemed to assume that it is either or, whereby one might find it hard to conclude on either side of the question. Alternatively, mentioning the advantages and disadvantages in regard to productivity and outsourcing will shine some light on the matter.

      In the said unit, it is mentioned in the reading that the notion of comparative and absolute advantage whereby one will find it easier to pinpoint that outsourcing had indeed increased productivity and efficiency. The decision of American companies to offshore and manufacture their products in Asian countries (mainly China and Vietnam) is mainly because the operational costs of said business are lower in said countries. Besides having lower labor unit costs (i.e., GDP per capita for China:https://rb.gy/33sr7c), said countries have more skilled labor that is able to operate machinery. As said countries are able to acquire the necessary capital investment in their manufacturing and transportation infrastructure, the productivity of countries like china increased and resulted in enhanced standards of living, evident in their rising GDP per Capita (https://rb.gy/33sr7c).

      Equally important, countries around the world have different environments, different work ethics, and different skills within their labor. As a result, one would have to conclude that the relative comparative advantage of some countries over others, through outsourcing, offers the opportunity for each country to utilize their labor in what they are good at. For instance, America has a workforce suited for information technology, meanwhile, China’s workforce is suited more for manufacturing, would it be more productive if we shifted industries? Would be said scenario result in the Chinese being incapable of It while Americans unable to manufacture an iPhone? The example asserts that utilizing labor from different countries makes it more productive by finding a suited workforce (i.e., china and manufacturing).

      Furthermore, this unit reminds me of the dictator from the 20th century, Pol Pot in Cambodia. I will not speak of the dreadful things he committed in his country but his economic beliefs. Pol Pot saw a danger in the country moving towards a capitalist industrialized system and sought to create more of a peasant farming communist society. I believe that Pol Pot interfered with the shift of labor from farming to manufacturing and from rural to urbanization. Had Pol Pot let the spontaneous shift in labor and the economy be free, maybe the country would’ve been better off (more productive and industrialized) than it is today.

      A final essential point to note is that although the benefit of global trade has been positive so far (lower phone and TV sets prices), one would believe that the United States will have to start producing goods at some point in the future. The reliance of the United States on foreign manufacturing hubs may decrease the productivity of the population in the future, especially with regard to the production of manufactured goods. Yes, IT and cloud technology are important, but they are a means to an end, that is, purchasing goods with the productivity that said products produce. Said points are evident in the decline of capital investment as a share of the GDP from 25 percent of GDP in the 1980s to around 20 percent today (https://tinyurl.com/4v2m54ek). Also, US manufacturing as a share of GDP has been on the decline, according to a chart from the ST. Loius fed (https://tinyurl.com/4u7ppu28).

      Cheers,

      Saleh

       

      • #14642

        Hailey-Marie Nieves
        Participant

        Saleh, I believe it is essential that the United States starts to produce goods as well, this country depends more on other countries for both goods and fresh produce. I also have never heard of Pol Pot before and from the way you talk about the individual, it does not seem like he was good to his country. I will have to research this person and find out more about them.

    • #14632

      Fatima ALGABYALI
      Participant

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

       

      As consumer price is very important and Deciding  what I am going to buy. You attend to buy something that is more affordable. Cost-cutting is the primary driver for businesses to outsource production to other nations. For instance, many clothing manufacturers outsource their production to nations with cheaper salaries, such as Bangladesh and Vietnam, because doing so lowers their costs and enables them to pass those savings along to their clients.Economists claim that putting labor to its best use is a smart business move. Reduced production costs should eventually trickle down to benefit consumers. The buyer looks at the price and quality of the product. However there are Products it is not necessarily of high quality. For example, the tissue. It does not matter if the quality is very high, you will take the cheapest price, but in electronic devices, it is important that the quality is very high to last you for a long period of time, not only a short time. It is also important for a person’s income, the income is different from one person to another. If the income is high, you will not care about the prices of simple things, such as a person whose income is low. For example straw, it is not important to buy it if it is expensive it’s not something really important to buy. In my opinion when I buy stuff I look for the quality more If it is electronic. For Example, when I buy an iphone I look for the quality more than the price, because  I want something high quality even if it’s expensive I don’t want to use it just for a week and then I have to buy another iPhone. There is also stuff I don’t really care about the quality of, I look more at the price such as a pen. I remember when I went yesterday to buy some stuff for college I took the cheapest pen  because it’s not really important to me as soon as it’s work.

      • #14641

        Hailey-Marie Nieves
        Participant

        Fatima, I agree with the idea of certain goods and their quality, since life can be pretty expensive at times, we normally look to cheaper prices, than their quality. There are some exceptions and I think that the exceptions are because of the goods or services prices. If you need something that is very expensive, you’re going to look for quality first, since it’s so expensive. Whereas if something is $2, most people’s mindset is “oh I can buy another one”.

      • #14644

        Saleh Sharhan
        Participant

        Fatima, you seem to be standing in line with those who agree that outsourcing lowers prices. However, the counter-argument is that corporations relocate their production to increase their profitability rather than passing such savings to their consumers.

        Moreover, in my opinion, companies always serve their consumers and profit is only an intensive to drive businesses to produce. I’m more inclined to agree with you. Take iPhones for example, my iPhone 12 cost me around $800. That is so cheap for something we use for music, called et Cetra. The only possible explanation for why this device and other electronic devices are inexpensive is because of outsourcing. Maybe the development of technology and production have a minimal role however because the GDP per capita in the U.S is very high relative to those in Asian countries which makes said devices cheaper.

        Cheers,

        Saleh

      • #14665

        Tyrena Moore
        Participant

        Yes I agree the value of a product varies.

        and the currency of other countries is important to take note of

      • #14668

        Eylul Karaosman
        Participant

        Hi Fatima,

        I agree with your explanation. Consumers love cheaper items, however, the quality of the product also matters. For example, I agree with the example you gave with iphones. Yes, Iphone’s are expensive but you are getting a product that is high quality.

      • #14676

        Fatima, I agree with you. Even some consumers will choose the cheaper product, but most of them will spend more on the quality. Cause most cheap products based on the price, they won’t have high quality mostly they end up paying more to get the same quality as other people get.

    • #14640

      Hailey-Marie Nieves
      Participant
      • The consumer: Does the consumer benefit? Are prices lowered by outsourcing? Why or why not?

      Link to Illinois News Bureau: https://news.illinois.edu/view/6367/205453

      Outsourcing allows businesses the time and resources required for focusing on other elements of their company while supplying customers with the high-quality services they expect. Unfortunately, outsourcing tends to be beneficial to businesses instead of both the business and its consumers. The practice of outsourcing hurts society in two ways, such as fewer jobs for workers, and consumers paying higher prices than they should for goods. According to the Illinois News Bureau article, it states “If the competition is softened and the production costs become lower, businesses don’t have an incentive to pass those savings along to consumers,” Liu said. “In some cases, consumers pay higher prices.”Our world is also built off money, so businesses are always looking to make the most money they can by purchasing cheap products or labor and then selling them for a higher price for profit. In a country where prices tend to be unreasonable, society normally seeks to purchase from companies with lower prices, but what happens when all companies have high prices? If an individual really wants the good or service, they will buy it. For example, let’s say there’s a business that grows and sells fresh fruits, they then make an agreement with another company in China that will provide them with the fresh fruits they need for a cheap price compared to their expenses beforehand. Of course, that company will then resell those fruits to consumers at a higher price, for the business’s own profit, meaning that prices are unfortunately increased for the consumers. Outsourcing is a great practice, but only if the business cares for both its profit and consumers.

      • #14645

        Saleh Sharhan
        Participant

        Great argument Hailey, however, I seem to disagree with what the article refers to as “soften competition.” I believe that businesses outsource to lower prices which turn incentives other companies in the same field to do the same and lower prices. Yes, the process of lower products does not happen overnight but rather over the years. Take a TV set, for example, adjusted for inflation, just did a quick search, and in 1970, the cost was around $600-700 ($4,000 adjusted for inflation). Can you imagine paying $4,000 for TV today? besides technological innovation, it would be hard to argue that such prices aren’t the course of outsourcing.

        Labor is the biggest component of production and in the U.S, it is very expensive, had all goods been made in the U.S, they might double or triple prices. That said, many firms are looking beyond outsourcing and are developing robots and more efficient assembly production in the U.S that would save labor costs and keep production in the U.S.

        Cheers,

        Saleh

      • #14651

        Fatima ALGABYALI
        Participant

        Of course, there are negative things about the use of external resources, including the increase in the number of unemployment in the country and the disappearance of some companies, such as what happened to some companies due to the success of Walmart. However, The company is always looking for what satisfies the customer in order to achieve profits and to succeed globally.

    • #14643

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

      Companies looking to grow their business for a low cost will use outsourcing. This business tool allows companies to expand their resources elsewhere. Local employees have the opportunity to focus on essential tasks and core values. Companies can speed up producer development for cheaper labor through outsourcing. Hiring professionals ensures that a business reduces its risk of poor quality services. When a business develops its operations, productivity may lower because it might not have the resources to handle other tasks. However, with outsourcing, you give the experts some responsibility and trust for those jobs. Most outsourced commissions are the ones that are usually too tiresome or time-consuming. Outsourcing does enhance company efficiency and productivity while building clientele.

       

      • #14647

        Oumou Jalloh
        Participant

        Hello Scarly,

        According to my view, some companies outsourced the certain operations in order to gain the advantage of expertise and low cost. I do agree that the company’s efficiency as well as productivity gets boosted by outsourcing as certain operations and responsibilities are handled by the organization that is providing the outsourcing services.

         

      • #14649

        Isaac
        Participant

        Scarly, I like how you stated that producer development can be done in a much quicker time period with outsourcing. Outsourcing really does help with a company’s efficiency and many of these companies sometimes fail to realize that. All around nice post.

      • #14653

        Fatima ALGABYALI
        Participant

        I agree with you in outsourcing business development to get low prices and high quality at the same time. For example, Walmart has achieved great success because of outsourcing to grow its business, and this is the reason for the company’s success because it gives customers products at low prices and high quality compared to other companies.

         

      • #14659

        Yelyzaveta
        Participant

        Hi Scarly, I agree with your words. Companies that use outsourcing services are more likely to get high-quality performance of certain services (since these experts specialize in narrower specialties), while saving money by not hiring full-time workers.

      • #14662

        Ivanna Balarezo
        Participant

        Outsourcing does in fact lower prices of production but we also must remember what happens when there is too much demand for something in the market. Given that more and more companies are looking to outsource, a possible outcome could be that the cost of outsourcing will be higher than producing in the companies own country. And of course, like said on the video, this won’t happen overnight but over the years so it will be interesting to see the changes and planning companies plan to take on the future.

      • #14664

        Tyrena Moore
        Participant

        I agree. I like how your answer compliments mine

    • #14646

      Oumou Jalloh
      Participant

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

      Outsourcing benefits both the businesses as well as consumers. In business, the outsourcing assist to save their time, resources as well as cost. The benefits of outsourcing to customers are getting product at lower cost. Even the consumers enjoy the benefit of low – cost production as it helps to reduce the product’s price. Even the competitors are required to sell the products at the competitive price to increase their sales and profit. This indirectly benefit the buyers. But the problem that outsourcing has chanced that the product quality may not be high. If the company seeks balance between the profit and consumer interest while outsourcing.

      But there many companies that outsource their product at low cost and sale at a low price. According to Liu published in Illinois news stated that the companies are not willing to share their saved cost through outsourcing to consumers. As a result, companies sell the product at a high price for high profit margin.

      Sources:
      https://www.forbes.com/sites/deeppatel/2017/07/17/the-pros-and-cons-of-outsourcing-and-the-effect-on-company-culture/?sh=1e480f7562d6
      https://news.illinois.edu/view/6367/205453

      • #14650

        Isaac
        Participant

        Oumou, I like that fact that you said outsourcing allows for the consumer to get their product at a lower cost. You also mentioned that companies sell their products at a high price due to the fact they don’t like sharing their saved cost and this is very important for people to know. After reading your source a lot of things were put into perspective for me on outsourcing. Very informative.

      • #14660

        Yelyzaveta
        Participant

        Hi Oumou, I agree with your thoughts. Businesses that use outsourcing services save money and get expert help, which makes it possible to produce more products at a lower cost and, accordingly, receive more benefits. At that time, the consumer is more interested in the product at a lower price, which gives a great demand for the company’s product.

      • #14661

        Ivanna Balarezo
        Participant

        Hey Oumou, it’s true that most companies keep the profits made by lowering costs of production but like you said, some actually do lower the sales prices so customers can get the same product at a lower price. But that is also when all of the quality products regulations come, since it’s cheaper to produce, companies may overlook “difficulties” and when something goes wrong with production, like employees treatment and minimum wages, chain of production and more.

      • #14667

        Eylul Karaosman
        Participant

        Hello Oumou, it is true that outsourcing benefits the consumers. It is cheaper for the consumer. But like you said it also affects the quality. Thats why business owners should be careful while outsourcing, as well as, the consumers when they are buying the product.

      • #14672

        xue,wang
        Participant

        hi, Oumou.  Just read your report and know that some companies operate in a way that keeps profits by lowering production costs, and some companies actually do lower their selling prices so that customers can get the same product at a lower price. And it really meets the needs of customers.

      • #14680

        Xavier Pineda
        Participant

        The initial advantage is a lower cost for the consumer. The biggest winners would be individuals with lower income. The quality of the product will lack its full potential and many time purchasing the product that isn’t effective in its use or last as long as its original model can make the consumer have to toss the product and purchase a new product a few times which in the end could end up costing the same or even more then the original model that cost more to start.

    • #14648

      Isaac
      Participant

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

      Outsourcing most definitely benefits developing countries and there are many reasons as to why this is the case. First off when a country is developing it is key to ensure that the country has the right resources to effectively grow and reach a point of success as well. With that being said outsourcing essentially provides investments into the country which can then accelerate that countries economic growth. This also allows for new money to come into that developing country as well and that means new opportunities and new jobs for the people that live in that country.  Outsourcing in simple terms allows for one’s economy to not only grow but also it makes sure that the country will have a certain level on confidence in themselves to boost up the economy and in the long run that is a win for everyone involved.

      • #14677

        Hi Isaac, I agree with your idea. outsourcing is a benefit to developing countries. this can help the country concentrate the most resource on the country and as you said, outsourcing can accelerate the country’s economy which is helpful to developing countries.

      • #14681

        Xavier Pineda
        Participant

        These are great points, the new jobs also cause a ripple effects into other industries as well as opportunities for the people in the countries. The new technology gives them an advantage as well to build their own products or spark an idea for a better method to building.

    • #14655

      Ivanna Balarezo
      Participant

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

      Now that we live in a globalized economy, companies have more and more options regarding developing and producing goods and outsourcing has been really popular and used for the past few decades. In the article “Why It’s important to Outsource right now” posted by Forbes on 2020 (https://www.forbes.com/sites/forbesbusinesscouncil/2020/07/08/why-its-important-to-outsource-right-now/amp/) says “Even though the idea of an all in-house staff sounds attractive, your team could become irrelevant and unable to compete in the market.” Which empathizes that outsourcing is a widely used method by companies to keep their cost of production at a minimum level while they get to focused and get advantage on activities they believe they are better fitted to perform and by doing so, increasing the company efficiency.

      The question is if this is beneficial for customers or not and I would say it totally depends on the company but the majority of them chooses it’s own profit over the customer needs. Since the cost of production is less expensive, they get to save some extra money that would be used if the production were to be in the same country. This money they get to save often goes to the owners and shareholders pockets rather than lowering the sales prices. As to the reason why, that depends on your point of view because a for-profit organization has a very clear view or purpose, that is of course making profit for the company. And, even though they are producing to satisfy societies needs, the majority of businesses are not strongly moved by altruistic motives.

    • #14657

      Yelyzaveta
      Participant

      “Efficiency and productivity: Does outsourcing enhance efficiency and productivity? Why or why not?”
      Outsourcing is the transfer of certain processes to third-party organizations that specialize in providing certain services. Businesses require outsourcing when they need professional help in a particular area. When a company resorts to such assistance, it often has a positive effect on the success of this company. Since the services that companies turn to are specialized in a narrower industry. For example, a small business that produces carpets sometimes enlists the help of a professional accountant and hands over the bookkeeping to him. It may be more profitable than hiring an accountant and supporting him, although his help is not needed all the time. A professional worker will do a quality job, which can lead to business success. Turning to the help of specialists can be more profitable and productive. When a business outsources functions that it cannot handle, the business has more time and energy to outsource for those processes that it can handle. Outsourcing can help develop some business processes in which one or another company is not strong. For example, a company that hires cleaners for a full-time job and a company that outsources and hires cleaners who come in and do their job only at certain times can save a significant amount of money. That is, when the company replaces permanent employees who are not needed to work constantly, they lose money on their maintenance.

      Sources : https://sophilabs.com/blog/how-does-outsourcing-increase-efficiency

      https://www.outsourcinginsight.com/outsourcing-increases-productivity

      • This reply was modified 6 days, 2 hours ago by Yelyzaveta.
    • #14663

      Tyrena Moore
      Participant
      • Efficiency and productivity: Does outsourcing enhance efficiency and productivity? Why or why not?

      Outsourcing does not enhance the efficiency and the productivity of the product or person you choose to invest in. If you choose to invest on a product that was originally made in a foreign country there are many concepts you have to have study. If you choose to invest in a foreign worker to produce, remake or upgrade the product you invested on it will be difficult for you to the under the concept.

      If your an American that seeks out to invest in foreign workers you have study their language and study the concepts on how they are able to produce the product or remake the product. You need to study (compare and contrast) foreign language and techniques.
      It’s important to understand that many countries have their way of doing things and the United States have other ways to produce things.

      If an American Firm seeks out to buy a Foreign Firm; they need to understand that their way of producing a product and totally different from the American way. From my private knowledge Americans and up coming learners (students and/or trainees) work out different concepts. We try to find a “short cut”; a different, faster way of learning on how to build, invent, upgrade, or even produce a product that the American Firm fell interest upon.
      That is why outsourcing may not enhance its efficiency or productivity. The concept of learning and producing even selling a product   Is difficult if you don’t care to understand the basic concept from the original producer.

       

      • #14674

        Shaila Quinapanta
        Participant

        Hello Tyrena,

        I certainly agree that an individual would have to study the company that will manufacture their product offshore. It is definitely something significant that one must do in order to know how your products will be produced, for instance, the working conditions and the quality of work. Otherwise, investing your money in just any outsource can potentially harm your business because of the lack of skills and low quality that went into your products.

    • #14666

      Eylul Karaosman
      Participant

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

      Outsourcing involves business overseas to help handle and or perform tasks needed for the corporation. Although it is known that outsourcing is beneficial to most, it is arguable that it can also hurt society. Consumers can benefit by purchasing items for a cheaper cost, however, this can depend on the item. For example, in the video “Made in China,” a man was concerned about an item he bought from American Eagle, which was manufactured in India. As customer service assisted him, she stated that he could receive the same product made in the U.S for $212 more. So in a way, people do obtain their products for a lower price. Not only does this give an advantage to consumers but also to the entrepreneurs behind the business. Outsourcing allows businessmen and women to control the costs of their company. It gives them access to cheaper labor, equipment, and other services while handling their work more efficiently. Yet, in other instances, it is the total opposite. While the production price is lowered, the quality also trickles down. A simple example of this would be a well-known company, Shein. Shein provides their customers with all types of apparel and accessories for highly affordable prices. Due to their wide variation and low numbers, some consumers tend to get their purchases with major quality issues, defects, and even broken items. Overall, outsourcing is generally seen as beneficial when it is done fairly and appropriately.

      • #14675

        Shaila Quinapanta
        Participant

        Hello Eylul,

        There is no doubt that outsourcing can be beneficial when it is done fairly and appropriately. The outcomes can either be favorable or unfavorable. For a business owner, outsourcing can be a pathway to low-cost labor and can be even more beneficial for them when it is done righteously because they’re investing their money into a third-party company for a low wage, saving them money and yet they’d still have their products in high-quality. On the other hand, you can risk paying a low amount of money into a manufacturer that has your products come out mediocre and in low quality, which can affect your business negatively.

    • #14669

      xue,wang
      Participant

      This week we’re talking about the advantages and disadvantages of outsourcing, which means getting any good or service from an outside contractor or supplier. This is an agreement for the company to rent or buy any service or product from elsewhere. It can be foreign or domestic.

      In this unit, the benefits mentioned are that outsourcing can increase the company’s profits and improve economic efficiency, companies will offshore to countries with lower labor costs, such as China, and Cambodia, saying that over time, it can shrink rich countries and the gap between poor countries. Another is to entrust part of the production or work in the enterprise to another enterprise. For example, a computer manufacturer entrusts the CD-ROM drive to another enterprise, an enterprise entrusts the recruitment of employees to another enterprise, or an enterprise entrusts its finance to another enterprise. Outsourcing services can enable enterprises to concentrate on producing their own strengths while handing over some of their weaknesses to professional service agencies, which will make the social division of labor more detailed, improve work efficiency and reduce enterprise costs. https://wits.worldbank.org/countryprofile/en/chn

      Of course, as consumers, we also benefit, because the price of outsourcing is low, so the price of our products will be relatively low, such as towels, daily necessities, after buying towels in the United States, it is generally three dollars, but when I go back to China To buy towels, it is 20 yuan.

    • #14670

      xue,wang
      Participant

      Yes, I agree with you, many products are made in China or other countries, if the price is low, many have quality problems. Moreover, in many cases, the price difference is very large with similar styles, so they are reluctant to buy American-made products.

    • #14671

      xue,wang
      Participant

      hi,eylul     I agree with you, many products are made in China or other countries, if the price is low, many have quality problems. Moreover, in many cases, the price difference is very large with similar styles, so they are reluctant to buy American-made products.

    • #14673

      Shaila Quinapanta
      Participant

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

      Outsourcing doesn’t necessarily benefit developing countries because outsourcing is the act of hiring high-quality workers for a low cost. Thus, implying that the specialized workers from developing countries are working for a low salary which indicates that they’re not being paid for their actual value but rather way below it. If outsourcing were to benefit developing countries it would raise the payment of the third-party company that provides the creation of goods or performing services. Therefore, it can actually advance the country economically and socially.

      However, as time progresses developing countries are realizing their value and raising their prices, which is upsetting for U.S, European, or multinational corporations because their main purpose on hiring workers from developing countries offshore was that they pay a low amount of money for their work. This can potentially be beneficial for developing countries because there will always be someone in need of highly skilled workers so even if their prices were to increase, businesses will continue to pay the high cost which can benefit them economically. On the other hand, this can also be detrimental for developing countries because if they continue to raise their prices, there won’t be as many attractions from big corporations to hire them because businesses do not want to invest large amount of money so, they will find some place where they don’t cost as much leaving developing countries with less people that would want to hire them. (https://youtu.be/V7fsEIp2r_8)

    • #14678

      Competition: Does outsourcing encourage competition? Is this a good thing? Why or why not?

      outsourcing encourages competition, it makes enterprises more focused on core business, more standardized management, more flexible operation, more secure compliance, and stronger scope and ability to utilize external resources. Also, the company by comparing the prices can use less money to get a high-quality product.

    • #14679

      Xavier Pineda
      Participant
      • International stability: Does outsourcing foster international cooperation, respect, and stability? Why or why not?

      The simple answer is yes. After watching the YouTube video “Why Outsourcing is Bad for Business” it highlights the timeline of how outsourcing started overseas and where it is currently. In the beginning US and European companies were under paying companies, as well as allowing terrible working conditions. This happened mainly because of the standard of living in these countries. There weren’t many opportunities for the people living in India to excel and as long as there is work there will always be someone that will take. The law of supply and demand gives to this. People needed [demand] jobs and these foreign operations had available work [supply] even if it was at a low pay. With a surplus of people the companies were able to keep the supply at a high cost since there wasn’t enough jobs. Slowly as more companies began doing the same there was a shift of the amount of jobs to the amount of people. There were more jobs than people, inflation in pay had to happen for companies to make the jobs more appealing. This gave the once under developed country the upper hand to demand more pay as well as better working conditions. The start of a project and its needs can change from it benefiting the creator to then benefiting the individual purchasing it. In this case a community in need of development.

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