Course: BUS 104-E052 | Intro to Business | Professor Buckler | Summer 2022

Outsourcing & Offshoring

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    • #12057

      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 Wednesday, August 3, 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 5 months, 4 weeks ago by Brielle Buckler. Reason: Updated Date / Rubric Link
      • This topic was modified 5 months ago by Brielle Buckler. Reason: Added MSSU Guide
    • #12295

      Dilson Abreu
      Participant

      After doing some study on what outsourcing and offshore are, I can state that outsourcing definitely benefits developing countries. Quick summary as to what the definition of outsourcing is, which is receiving goods or services from a third-party or international provider, rather than an internal source which means from their own firms. Offshoring is the practice of relocating your firm to another country in order to benefit from lower manufacturing costs as a result of industrialization. I say that outsourcing has done a great benefit to developing countries such as China.

      When China first entered the World Trade Organization in 2001 as a developing country and became part of globalization, I believe their use of becoming more economically and socially successful was the usage of hard Labor. As the video “Why Outsourcing is Bad for Business” by Minute MBA by OnlineMBA.com states “China and India were once prime targets for the US, Europeans, and multi national corporations looking to save a buck, both were valued of their low-cost pools of highly skilled workers” notes that because China and India’s economies and demand were so low, national businesses such as the United States establish their enterprises there in order to save money on labor and manufacturing costs. Because of this a lot of United States residents lost a lot of their jobs, According to “China Trade, Outsourcing and Jobs” by Will Kimball and Robert E. Scott it states “Growth in the U.S. goods trade deficit with China between 2001 and 2013 eliminated or displaced 3.2 million U.S. jobs, 2.4 million (three-fourths) of which were in manufacturing. These lost manufacturing jobs account for about two-thirds of all U.S. manufacturing jobs lost or displaced between December 2001 and December 2013”. This states that over 3.2 million jobs have been lost in the United States. Because of this China’s wages have 10-20% a year for the past decade and Chinese managers’ pay either matches or exceeds pay in the United States as “Why Outsourcing is Bad for Business” states. This greatly benefited a developing country like china because their value in currency increased which value is worth more than the US Dollar as of this year.

       

      Furthermore, another viewpoint that I would like to bring from another article named “Outsourcing to China Cost U.S. 3.2 Million Jobs Since 2001” by Katherine Peralta states “Between 2001 and 2013, the U.S. goods trade deficit with China increased by $240.1 billion, or by $21.8 billion on average per year over that time period. And over the 2001-2011 period, U.S. workers who were directly displaced by trade with China lost a collective $37 billion in wages as a result of accepting other lower-paying jobs”. This illustrates because of the 3.2 million job placement loss in manufacturing with China, the United States workers have lost over $37 million dollars in wages. This may appear to be a terrible loss for US employees due to income loss, but it was a huge gain for corporations since Chinese wage demand is lower than American demand, saving them a lot of money.

      To summarize, outsourcing benefits developing countries since it may supply millions of people with work opportunities in developing countries, which improves their economic and political standing.

       

      <span style=”font-weight: 400;”>Outsourcing to China Cost U.S. 3.2 Million Jobs Since 2001 | Data Mine | US News</span>

      <span style=”font-weight: 400;”>-</span><span style=”font-weight: 400;”>China Trade, Outsourcing and Jobs: Growing U.S. trade deficit with China cost 3.2 million jobs between 2001 and 2013, with job losses in every state | Economic Policy Institute (epi.org)</span>

      <span style=”font-weight: 400;”>-</span><span style=”font-weight: 400;”>(3328) Why Outsourcing is Bad for Business – YouTube</span>

      • #13562

        Gal kedem
        Participant

        Hi Dilson,

        You have raised thoughtful aspects about the benefit of developed countries from outsourcing. As we learned in the chapter, money drives the economy. Outsourcing brings more money to those countries and thus drives and expands their economies.

         

      • #13576

        Paris Curtner
        Participant

        Hi Dilson,

        Very well put, I think you make a great point here. Outsourcing is a prime factor in economic growth for smaller developing countries.

      • #13586

        Malcolm
        Participant

        Hello Dilson,

        I agree as my post below states in the pros vs the cons in outsourcing in other countries. The progress that country can make if the proper infrastructure is laid when a international company decided to invest in that land is better then what some of those third world countries have to offer.

      • #13596

        Mohinabonu Saidova
        Participant

        Hi Dilson

        I agree with you, you explained very well. money drives the economy. Outsourcing brings in more money to those countries and thus grows and expands their economy.

      • #13600

        bryanna inoa
        Participant

        Hi Dilson,

        You have a great take on outsourcing.  I agree with how it benefits developing countries.  It allows people to see the skill level people have and allows more money to be brought in to them so they can get more pay.

      • #13663

        Brielle Buckler
        Participant

        Excellent job, Dilson. Thank you for citing such reliable sources and for fully explaining your position. I think we all learned a bit from your response!

    • #13524

      Paris Curtner
      Participant

      I think there are many pros and many cons of outsourcing, it really depends on how you want to view it. I would say overall, outsourcing does benefit consumers. Obviously, this isn’t going to be true 100% of the time, but for the most part, I would say that most consumers will benefit from this. There is way more that goes into this than just the outsourcing part, it all depends on each specific company, what their product is, how they run their business, what their balance sheet looks like, etc. Although I do think more times than not the consumer will most likely benefit from outsourcing, I also think that the business that is choosing to outsource their labor is going to benefit a lot more than the consumer is. I think the main point to outsource your labor in the first place is to make more of a profit. If it costs X amount of money to pay Americans to do the job when you could pay an eighth of that price to have people in China or India do the exact same job it only makes sense to outsource. I think this is a very beneficial strategy for startup companies that don’t necessarily have the capital to afford domestic labor, to get their business running off the ground to start making their first profit or to get out of debt. But if some more established businesses are currently using domestic labor and decide to start outsourcing to make more of a profit, yes they could drop the prices of their goods or they could keep their prices the same if the demand is there and keep an even greater profit for themselves. Which is why it is hard to say that outsourcing will benefit all consumers of all businesses, there are too many other factors involved. But overall I would say that more times than not the company would drop their prices at least by a small fraction for consumers but the profit margin is going to be greater for the company than the savings the consumers will receive.

      https://news.illinois.edu/view/6367/205453

      https://www.investopedia.com/articles/personal-finance/082815/unintended-consequences-outsourcing.asp#:~:text=Outsourcing%20is%20a%20good%20business,lower%20costs%20on%20to%20consumers.

      • #13563

        Gal kedem
        Participant

        Hi Paris,

        I think you have addressed this ambiguous issue in an excellent way. As you mentioned, consumers are most likely to be beneficial, but not always. The market competition or rise in the prices of imports may keep the prices up.

        Another benefit for a consumer that rises from outsourcing, as I see it, is the development of similar but cheaper local products that can be a good alternative at a low price for the consumer.

      • #13585

        Malcolm
        Participant

        Hello Paris,

        I agree with your thoughts on outsourcing benefiting the customer. Companies are able to use more resources at a cheaper price which in return benefits the customer especially in customer service situations and more product being able to be produced. Outsourcing for companies like Nike and Adidas allows them to produce more sports clothes and sneakers at a favorable rate to the company and enough in quantity to satisfy the customer. For customer service companies are use different people around the world that can help anyone with their needs in tech, air service or Verizon customer service.

         

      • #13587

        Mohinabonu Saidova
        Participant

        Hi Paris

        You have a very good point, I think you are very right here. Outsourcing money is important for development and is a key driver of economic growth for developing countries.

      • #13590

        Parhoun Farrokhinia
        Participant

        Hi Paris!

        I agree with you and I really loved the advantage you mentioned:” If it costs X amount of money to pay Americans to do the job when you could pay an eighth of that price to have people in China or India do the exact same job it only makes sense to outsource.” One of the most important advantages of outsourcing is the owner can reduce the costs.

      • #13599

        bryanna inoa
        Participant

        Hi Paris,

        I agree with you with your explanation of outsourcing, outsourcing can allow companies to reduce the cost of their products. In many cases, it is a good strategic move business-wise.

      • #13664

        Brielle Buckler
        Participant

        Thanks for this perspective, Paris. You’re right — consumers benefit ultimately because if inputs like labor are less expensive, that cost savings is often passed along to consumers in price reductions (or at least price stability). It’s important to realize, though, that companies do not have to mitigate price hikes thanks to cost savings. In some instances, greedy companies can reap the rewards of cheaper inputs without passing along that cost savings. Great food for thought!

    • #13560

      Gal kedem
      Participant

      Do developing countries benefit from outsourcing? Yes, of course.

      After studying and reviewing the materials in this chapter, the prognosis that developing countries benefit from outsourcing grew in me. According to the MBA video, “why outsourcing is bad for business,” the phenomenon started to expand in 1980. The fields in which the countries benefit may vary, but it is clear that these countries have made significant progress.

      Let’s begin with the creation of jobs. As mentioned in the article, “How Developing Countries’ Economy Benefit from Outsourcing,” it offers well-paid jobs to local people. It is mistakenly common to think that these jobs are low-skilled, but as we saw in the MBA video, Boeing outsourced the production of landing gears, batteries, and engines. Furthermore, it contributes to the professionalism and development of the local workers. These valuable and demanding jobs enhance education, which leads me to the next point.

      As more valuable and demanding jobs are created, more people seek education to qualify for these jobs. These empower the capital of those countries, which is one of the four factors of economic production, as we learned earlier in the course. This higher level of capital will eventually enhance growth in other market areas and contribute to developing the country’s economy. Adding to that, as mentioned in the MBA video, unique techniques and patents are exposed when outsourcing production. The developing countries will be able to exploit these for their inventions.

      The third aspect is globalization. As top firms outsource their production, both sides are more exposed to communication and opportunities. We can learn from the video about the relationship that carries advantages within it between the American company Apple and the Chinese company Foxconn. Of course, that works the other way around. Local companies or organizations have more opportunities to collaborate with these foreign companies and expand their scope as they influence their local economy.

      To sum up, the growth in varied fields due to outsourcing in developed countries contributes much to their economy. It is not incidentally that the OECD expects developing countries to maintain 60% of the world GDP in 2030.

       

       

      https://www.oecd.org/dev/pgd/perspectives-global-development-shifting-wealth-press-release.htm

      https://www.investopedia.com/articles/personal-finance/082815/unintended-consequences-outsourcing.asp

      https://outsourcingangel.com

       

      • #13575

        Bekzod
        Participant

        Hello. I liked your Boeing example. So I’d like to add the 1980 MBA video as a good example for your argument.

      • #13577

        Paris Curtner
        Participant

        Hi Gal,

        I think you are spot on here. I think in a broad macro view outsourcing is a win-win for the firm that is choosing to outsource as well as the country. For the firm, they get to lower their expenses while still achieving that same end goal and it creates lots of future economic growth for the smaller developing countries.

      • #13588

        Parhoun Farrokhinia
        Participant

        Hi Gal,

        I really enjoyed of your writing. This was clear and I think you explained the summary of the video well, which shows that you watched the video carefully! Also, I agree with the sentence you mentioned “Local companies or organizations have more opportunities to collaborate with these foreign companies and expand their scope as they influence their local economy.”

      • #13602

        Mubtasem Ali
        Participant

        The Boeing example of offering well-paid jobs to local people is very true in many instances. For example, a lot of software engineers In South Asian countries work for Middle Eastern or European countries from abroad for less than the pay of their counterparts in those countries but still a massive boost in salary compared to work in their home country. Furthermore, with the low cost of living in their home countries, their standard of living actually becomes much higher than their counterparts who work in Europe or the Middle East.

      • #13665

        Brielle Buckler
        Participant

        I love this perspective, Gal: that not only do higher wages enter the economies of developing nations thanks to offshoring, but that education rates increase as a result of prerequisite knowledge and experience requirements. An interesting — and important! — take. Thanks for sharing.

    • #13574

      Bekzod
      Participant

      At present, IT is a market for enthusiastic ideas of outsourcing IT services and in this regard, the task of evaluating the effectiveness of outsourcing needs to be addressed, since it is observed that outsourcing IT services can incur costs for the use of information technology. At the same time, if we move away from the expressions and advantages that are recognized in the periodicals, then the effectiveness of the withdrawal of IT services for outsourcing is not seen as unambiguous. When calculating outsourcing decisions, it is necessary to evaluate the financial and organizational costs, without losing from the risk analysis area, the calculation when organizing the outsourcing of IT services. Lack of analysis results may result in results instead of noticeable tangible results. Outsourcing service providers have methodologies for calculating the effectiveness of outsourcing, but for the most part they have large financial benefits and very often leave beyond the analysis of the likelihood of losses from processing their risks. Many companies, after a private time, refuse to outsource and return to exceptional models of the organization of the IT department. Therefore, the task of analyzing the effectiveness of outsourcing requires a solution for each company in search.

      • #13583

        Allah Williams
        Participant

        very well organized response great point lack of analysis results will result in less noticeable tangible results.

        • #13605

          Renique Baimbridge
          Participant

          Hello,

          Great discussion in an article that I read it did point out that one benefit of outsourcing is providing continuity and risk management, so outsourcing reduces risk that an operation could bring

      • #13661

        Brielle Buckler
        Participant

        Hi Bekzod — which of the questions in the prompt were you responding to? This seems to be a very roundabout response about whether a particular company should outsource Information Technology work…

    • #13580

      Malcolm
      Participant

      The perspective of Outsourcing I will write about is how it is beneficial to a developing country and brings stabilization.  Areas where it cost less to employ like the Philippines, Indonesia and India are where large international companies use outsourcing for customer  service, Human Resources and call centers.  The benefits of companies investing in the infrastructure of these places generally boost the economy for all. New well paying jobs are created for the people of these areas that was not available before. The investment these companies make into the people of these areas in return benefits the company because they are able to save money, invest more into more quality products and grow their worth.

      Those same benefits that outsourcing brings other countries does hurt American citizens. If companies are laying off more workers for cheaper options then American people who used to depend on customer service jobs and call centers as a way to make money are being hurt by outsourcing.

      Personally I think the benefits of outsourcing do out way the cons of outsourcing for your business or company especially if it is international business that can support the area it is outsourcing from. With the rise of people working from home every company has used or uses outsourcing of some sort to fill mail rooms, concierge teams, call centers or tele marketers to fill a need the company has.  If growing the bottom line is the main goal then yes outsourcing is a reliable way to do that.

      https://outsourcingangel.com/how-does-outsourcing-help-developing-countries/

      • #13582

        Allah Williams
        Participant

        definitely agree that companies laying off workers for cheaper options are being hurt alot by outsourcing

      • #13606

        Renique Baimbridge
        Participant

        Hello,

        Great discussion, It is a win-lose-win situation because its boosts one economy but on the other hand another is getting hurt

      • #13662

        Brielle Buckler
        Participant

        Thanks for your response, Malcolm. I think that one of the “costs” of business is seeking cheaper inputs (like labor) in favor of higher profits. It’s unfortunate that raising the earning potential of developing countries through outsourcing or offshoring can negatively impact employment rates here in the US, but as other countries become more developed and industrious, the whole world benefits.

    • #13581

      Allah Williams
      Participant

      Outsourcing has a number of possible benefits, but there are also a number of potential downsides that should be considered. One of these is that it has the potential to put pressure on wages in developing countries. Developing countries. This is due to the fact that businesses who outsource their work may be able to find people who are prepared to work for cheaper salaries. It is possible that this could result in a general decrease in wages, which will be harmful to workers in emerging countries. In addition to this, outsourcing can also result in a reduction in employment opportunities in developing countries. This is due to the fact that businesses could decide to replace workers in developed countries with people in developing countries because the latter are ready to work for a lower wage.

      One other potential disadvantage of outsourcing is the possibility that it would result in a reduction in the quality of the products and services provided. This is due to the fact that businesses who outsource may be more concerned with reducing costs than maintaining a high level of quality. As a direct consequence of this, the goods and services that are produced might not live up to the expectations set by individuals who live in more developed nations.

      Outsourcing can have both positive and negative repercussions, depending on the circumstances, and every circumstance is different. It is essential, prior to making a decision, to give thorough consideration to all of the potential ramifications that could result from outsourcing.

      • #13603

        Mubtasem Ali
        Participant

        I did not think about how the pressure to increase prices in the country that is being sourced for international labor would be detering from and making hiring for businesses not viable or lead to a brain drain of the best talent to foreign companies. I am interested in reading more about how these impacts look.

      • #13666

        Brielle Buckler
        Participant

        Thanks for this response, Allah. Can you please cite your source(s) here? I have a few questions:

        • How would offshoring work to emerging / developing nations reduce the wages in those nations? In fact, most often the opposite is true: offshoring increases wages in emerging nations.
        • What do you mean by “This is due to the fact that businesses could decide to replace workers in developed countries with people in developing countries because the latter are ready to work for a lower wage.”? That’s the whole point of offshoring for many companies!

        Great point about the potential decrease in quality. While this is not always the case, often companies will pursue expense savings in favor of the best materials/workmanship.

    • #13584

      Mohinabonu Saidova
      Participant

      Often they are. the main incentive for
      companies must outsource production
      countries is to reduce costs. For example, many
      clothing manufacturers outsource their production
      to low-wage countries like Bangladesh and
      Vietnam, because they pay less
      costs can be reduced and, as a result, charged less
      prices for end customers. According to most theories of international trade, it
      does. When firms are allowed to separate freely
      can access their resources worldwide
      the comparative advantages of each country
      improve efficiency and effectiveness.
      For example, Apple manufactures its own products
      The US, which has a highly skilled workforce, but
      manufactures them in East Asia, where the labor is employed
      the force is not as competent, but cheaper. Final
      the result is more efficient than if Apple did both
      things in the same country. Outsourcing encourages competition because it
      lowers and increases the price of goods
      efficiency. It prevents cartelization, collusion,
      and the formation of monopolies or oligopolies
      (they can still form). According to economic theory, competition is a
      a good thing because it benefits the end consumer
      by lowering prices, meanwhile
      quality of goods and services. Outsourcing benefits developing countries
      because it allows investment
      otherwise kept in developed countries.
      As the above examples, Bangladesh will benefit
      investments of clothing manufacturers from
      And first world countries like Nike or Prada
      China benefits from technology investment
      Companies like Apple or Intel.
      These investments create jobs, know-how, capital
      can lead to the development of
      domestic competitors in developing countries.

      • #13636

        Dilson Abreu
        Participant

        Hello Mohinabonu,

        Great explanation of how outsourcing works! I really liked the clothing example you brought up because every time I tend to go clothes shopping, I always see that they are made internationally, and I always wonder why. But as you said, It is because the wage demand is way lower, and the manufacturing cost than in the United States or where ever the company is from. I also enjoyed in the end when you mentioned developing countries like China, and Bangladesh and how their main source of development comes from.

      • #13667

        Brielle Buckler
        Participant

        Thanks for this response, Mohinabonu. Did you mean that Apple both manufactures their products in the US and overseas? Sounds like you accidentally wrote manufactures for both regions. I’m intrigued and want to learn more. What sources did you use for your response?

        • #13673

          Mohinabonu Saidova
          Participant

          Yes, it is made in America and in other countries as well.

    • #13591

      Parhoun Farrokhinia
      Participant

      Initially, I want to start with the definition of outsourcing. According to Paul Boyce,” Outsourcing is when a company hires an external firm to conduct certain aspects of its business. In other words, one business hires another to operate part of its operations.”

      I want to start with the advantages. Outsourcing is good because of these reasons:

      1. You get more experts

      2. Things get done fast

      3. You can reduce costs

      And so on…

      Some of the disadvantages of outsourcing are:

      1. There are hidden costs

      2. Personal difficulties

      3. You reduce quality control

      And so on…

       

      • #13594

        Parhoun Farrokhinia
        Participant

        But this is the main question, does outsourcing benefit developing countries? How? I think yes it helps a lot. It can provide people with well-paid jobs because they don’t seek unprofessional employees. They are looking for professional individuals to do their bests. Furthermore, they are dealing with more than one business at the same time. For example, security firms are much better equipped to train and source qualified personnel, as opposed to the local supermarket. This is because the security firm will already have processes and structures in place – such as training personel and manuals. 
        I don’t know what happened. My comment just posted and I noticed that my comment is not complete.( also I couldn’t edite it 🙁  )

        These are the links I used :

        https://outsourcingangel.com/how-does-outsourcing-help-developing-countries/c

        https://smallbiztrends.com/2017/02/advantages-and-disadvantages-of-outsourcing.html

        https://boycewire.com/outsourcing-definition/

        • #13607

          Dilson Abreu
          Participant

          Hey Parhoun,

          I agree with your statement about how outsourcing helps developing countries, I also liked how you organized the advantages and the disadvantages of outsourcing. Lastly, your articles are really well informed, especially “How does outsourcing help developing countries” by Jamie Ayque, it addressed very important topics such as addressing the social issues and the economic impact of outsourcing.

        • #13668

          Brielle Buckler
          Participant

          Thanks for replying to your own comment when you realized that not everything posted. I wish you gave a little more detail into why you think offshoring provides citizens of emerging countries higher wages. What do these developing countries stand to gain from this?

    • #13597

      bryanna inoa
      Participant

      After watching the MBA video “Why is outsourcing is bad for business”,  there are a lot of benefits that come from outsourcing, as well as disadvantages.  When it comes to outsourcing benefiting the consumer, it does and doesn’t.  Outsourcing allows companies to open up more jobs in the United States.  The video states that the creation of jobs allows local people to get good competitive-paying jobs.  Not only does it allow people to get jobs, but people would also need some education to obtain these jobs.  Outsourcing is a good business strategy to improve efficiency, cut costs,  and speed up product productivity.  I feel like outsourcing benefits developing countries because it shows that the jobs people are doing there aren’t low-skilled, and require some type of education in the long run.  I think outsourcing is smart because if you can pay someone in the states to do the same job overseas for the same pay, it makes sense.  Everything benefits everyone in a way, Companies get more products faster, jobs are made, and consumers get better customer service and possibly lower prices for their products.

      • This reply was modified 4 months, 1 week ago by bryanna inoa.
      • #13670

        Brielle Buckler
        Participant

        You’ve almost got it, Bryanna. It doesn’t make sense for organizations to offshore or outsource if the cost is the same — most of the time, it’s done so that the company can recognize some kind of cost savings and therefore make more profit. You’re right that often these roles also elevate the level of worker in emerging companies, but much of the work that is offshored or outsources is factory work.

      • #14059

        kfran
        Participant

        Hello Bryanna, first I would like to say well said! I do agree with your statement where you said, ”  I feel like outsourcing benefits developing countries because it shows that the jobs people are doing there aren’t low-skilled, and require some type of education in the long run ” it just reminds me of the fact that as long as you have an education and know what to do / and of what the job requires you to do it makes it a success for both the business and the worker.

    • #13601

      Mubtasem Ali
      Participant

      Does outsourcing benefit developing countries? The short answer is Yes, probably.

      I will start off with something I noticed in the readings. In “Why It Matters Global Environment”, the author mentioned ethical concerns that Bangladeshis make as little as “0.21$” in the garment industry. However, as someone who is from a Bangladeshi family, I have actually brought this topic up many times to family members who grew up there or still live there. From what I can gather and my understanding of the country, Bangladesh is one of the most overpopulated countries in the world; on the worldpopulationreview rankings, Bangladesh sits at number 5. One of the consequences of that as well as still developing is there are very few jobs in Bangladesh relative to the population, especially jobs with a  set salary that families can depend on. The little work that is available is typically entrepuenrail or acquired through pure nepotism. Even with foreign work due to limited work available families that do not have the benefits of knowing people who have work typically don’t find work. These international firms that bring jobs into the country are widely welcomed despite the negative press and sentiment such business behavior has in the American public. In short, countries that need jobs and are still developing despite the low pay benefit greatly from these business ventures. Furthermore, these investments lead to increased economic activity, money, and greater participation in the labor force. The impact of this can be seen as Bangladesh’s biggest industry according to worldatlas.com is textiles, which is only possible through the massive exports that the industry has, as well as the foreign investment to create these manufacturing facilities and to employ these workers that may have been not participating in the labor force otherwise.

      Although I have listed all these pros, ethical questions should still be asked. The pay and working conditions considering the value some of these companies outsourcing to Bangladesh are receiving could be and probably can be increased. Despite all this, the low pay is still welcome to no pay, which is the reality of many in Bangaladesh especially 10 or so years ago, the county has developed fast in large part to the industries. Giving families some income at least allow their kids to go to school and hopefully have one or two of them become educated enough and lucky enough to work more preferred jobs in skilled trades like programming and medicine.  Even though Bangladesh’s labor has been “exploited” in the last 15 or so years the country is one the fastest developing nations in the world and has a GDP per capita on the same level as India and is on pace to pass them. Another aspect is having these global companies working in Bangladesh they can share the expertise, resources, and knowledge that can lead to a more skilled and educated population. As well as, gain familiarity with the global business landscape and allow Bangladesh to do much of what these companies are doing. This can already be seen with many Bangladeshi businesses expanding outwards with great success.

       

      https://www.worldatlas.com/articles/what-are-the-biggest-industries-in-bangladesh.html#:~:text=Farming,GDP%20also%20comes%20from%20agriculture.

       

      https://www.coursehero.com/study-guides/wmopen-introductiontobusiness/global-business-strategies-2/

      https://worldpopulationreview.com/country-rankings/countries-by-density

      • #13671

        Brielle Buckler
        Participant

        This is excellent perspective, Mubtasem. Thank you so much for sharing! We see something like 21¢/hour and become outraged — but if there is no other way to make money in an emerging country like Bangladesh like you mention, this could mean all the difference for a family. Your comments about a “steady salary” are spot on — it may not seem like much but it has the ability to elevate families out of poverty relative to where they start prior to securing a job like this.

    • #13604

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

      Firstly what is outsourcing? According to the text, human resource management outsourcing can be referred to as ” contracting with another company (onshore or offshore) to perform some business-related task.” Outsourcing is beneficial to a company because it can partner with someone to bring new ideas and innovations that will help build and move the company forward. However, that is not the only benefit because when companies outsource the production expense can be lowered, access to more resources, and promote growth. According to https://www.thebalancesmb.com/top-outsourcing-advantages-2533765 “Businesses often think about outsourcing purely in terms of cost savings, but outsourcing can do more than just lower expenses. As your business grows, outsourcing can be a way to promote innovation, disrupt your industry, and access new skill sets that reposition your company in the market” Outsourcing can push companies/ businesses to a whole different level which leads to major competition amongst one another. Because companies that outsource can provide more to their customers/consumers with more for less and still make a respectable profit.

       

      articles: https://www.oercommons.org/courses/human-resource-management-3/view

      https://www.thebalancesmb.com/top-outsourcing-advantages-2533765

      • #13672

        Brielle Buckler
        Participant

        Thanks for sharing, Renique, and for choosing to answer a question in the prompt no one else had. Profit-driven companies often turn to offshoring & outsourcing to increase their profits and/or to reduce costs for their consumers, thus setting themselves apart from their competition. Nice job!

      • #14060

        kfran
        Participant

        Hello Renique, I like how you were able to give a defined answer to what Outsourcing is and then explain further the benefits of it by using and quoting your sources! Well said and worded!

    • #14055

      kfran
      Participant

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

      Outsourcing is a business practice wherein services or job functions are farmed out to a third party. Outsourcing is suitable for companies seeking low-cost labor. These companies boost profits and then hand the more low expenses onto buyers. There are many favorable and unfavorable results of outsourcing, especially for employees. It allows workers/staff to focus on what they do best, concentrating on their primary tasks and future methods. Basically, it will enable workers to zero in on what they excel at, allowing them to do the more critical errands. Also, another thing is that re-evaluating helps productivity and work fulfillment for representatives(third parties too). 

      • This reply was modified 3 months, 2 weeks ago by kfran.
      • This reply was modified 3 months, 2 weeks ago by kfran.
      • This reply was modified 3 months, 2 weeks ago by kfran.
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