Is Outsourcing a Good Idea - Research Paper Example

Outsourcing is not a good idea Outsourcing is not a good idea when the picture is analyzed in a broader frame. Outsourcing only benefits the entrepreneurs. Outsourcing is a practice directed at enhancing the profitability of the business. In any business, the fundamental goal of the entrepreneur is to minimize the cost and maximize the profit. Outsourcing helps the entrepreneurs achieve this goal. When an entrepreneur in an advanced country outsources labor or services from an underdeveloped or the developing country, the service is provided at a much lower cost than what the local labor or services would have cost.

Recent developments in the global economy like the Internet have played a major role in promoting the practice of outsourcing. In the contemporary age, business entrepreneurs do not even need to always call the service providers in person abroad as the services can be provided over the Internet, thus further reducing the cost of operation and increasing the profitability of the business. “Because IT services, in the United States, from equipment to IT personnel and specialists, are expensive, there is a significant degree of financial incentive to a company when outsourcing for this reason alone” (Cadena, 2007).

Outsourcing is potentially dangerous for the stability of economy and the socioeconomic system of a country. When a company outsources, it essentially plays its role in reducing the number of employment opportunities available to the local workers. As a result of this, the rate of unemployment in the country increases and people become more frustrated and dissatisfied. Outsourcing is a selfish move as the entrepreneurs make profits at the cost of the happiness of the whole society. Outsourcing poses complications when the organization feels the need of change and be more innovative.

When a company produces a product with tight competition, outsourcing may reduce the company’s tendency to maintain this competition because the customers want to see and witness the provider of the product. It is crucial to retain the services domestically to land new accounts. Outsourcing is disadvantageous for the local workers but advantageous for the foreign workers, particularly when they are from the underdeveloped or developing countries. Although many people do not like the US for the role it has played in the international politics, yet they are still optimistic about working in or for America (Dutton, 2007).

When the situation is considered as a whole on a global scale, outsourcing may appear to be in positive light, though the risks it poses, the complications it puts the business into, and the results it produces for the local labor tarnish its image. A good alternate to outsourcing is hiring fresh college graduates from within the country. This is a mutually beneficial deal between the employer and the employees. The employer gets an opportunity to save the cost as he is not required to compensate the fresh graduates heavily like experienced employees.

On the other hand, the fresh graduates get employed immediately and start getting experience. This enhances their professional skills and saves them all the frustration of looking for jobs. References:Cadena, C. (2007, April 26). Outsourcing: Pros, Cons and Alternatives. Retrieved from http://voices.yahoo.com/outsourcing-pros-cons-alternatives-306876.html?cat=37. Dutton, G. (2007). Grassroots diplomacy: How corporations can change the way people think about America. In F. H. Maidment (Ed.), International business (14th ed., pp. 97-101).

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