Disadvantages of Outsourcing - Term Paper Example

Disadvantages of Outsourcing Outsourcing is defined as the amalgamation of the required skill set from a number of different areas with the eventual aim of benefiting the people in a number of ways by providing them what they really need as well as provide back to the organization and at times the country as well. Outsourcing of late has come out as something that is becoming a trend and thus is an important issue to surface in the recent times. It has also hit the presidential elections in the United States. With outsourcing comes a responsibility as well. The companies need to understand their duties towards all the relevant stakeholders as well as the employees. An important question which has come to the notice of all and sundry here is that offshore business processes can be best used for meeting demands of the customers when we discuss the subject of demand and supply. However the problems that remain within this issue are something to talk about as well. One needs to understand that a significant notion that is making rounds within business circles relies on the fact that whether or not outsourcing of jobs can tie in easily with the aspects of innovation and creativity. Recent research and studies have shown that within the US, nearly 1 million jobs have factually been reserved over a period of time. The same is mentioned as something being in duration of economic recovery for the huge multinationals as well as the corporations. A number of different issues thus surface which relate with the tax cuts and whether or not the scenario has thus hurt the job creating situations. The offshore movement as concerns to jobs has become a subject of debate within the tourism industry just like any other sector as well. A couple of countries which stand out in this whole scenario are the Philippines and India. These two countries are the best possible areas (of strength) for setting up the call centers as there is an abundance of related talent and required skill set as well. The people within these countries take less amount of money and do the job which their foreign counterparts would do at an exorbitant rate. Also countries like Pakistan, Sri Lanka and United Arab Emirates are giving positive signals to the developed countries of the world to come and invest in the form of outsourcing with minimum possible risks. Outsourcing can pose quite a few problems for the stakeholders and just about anyone who is attached with this business. To list three of the more significant ones, we can quote the case of the organizational, educational, environmental and infrastructural aspects. We will briefly explain each one of these in the proper contexts. To start with, one severe concern has been in the form of brain drain and hence we discuss the flow of educational minds from the developed nations towards the different regions of the world. The US education programs have changed and their ambitions lowered up a little bit ever since there was change within the global competitive levels and the same has come about because there is just so much at stake in present times. We can take the example of different companies which have aligned various ways under which they have adopted the bandwagon of global competition in the wake of outsourcing. Environmental concerns rise when there is a trend of congestion within a particular area or where there is an alarming situation of having pollution as well as toxic emissions. This can be pretty evident if a country asks for production of plastic at a place which is not so close to its boundaries but has cheaper plastic production rates as well as trained manpower in the respective area of expertise. Hence when the deal is struck between the two players, it is only after that they come to the knowledge that this can eventually result in a situation where environmental concerns can become the talk of the town. In such cases, proper litigations need to be enacted in order to put environmental concerns before anything else and then only grant the respective players or the companies their right to go ahead with the production processes. Global sourcing can also result in a problematic situation for the people who live in that area and just cannot do anything about it since their both ends are met by the salaries thus given out by the industry as a whole. No matter, how much the situation could be alarming, one has to see that the same can result in pretty drastic consequences and thus lead the people residing in the area to suffer at the hands of the risks posed by global sourcing. There is a quagmire in this whole situation since the hand feeding the residents is the hand which is making their lives terrible both in the short term as well as the long run. The infrastructural concerns are an unlimited proposition since the problems posed with setting up an industry of a particular product is virtually next to impossible at times. This could be accredited to the shoulders of bureaucracy and red tape, not to forget the several amendments made in the government’s litigations with regards to the very same. The infrastructure for setting up selective industries is difficult to come by. It is all the more hard to acquire trained manpower and select skill sets. If only all these measures are taken in the right direction, the single most issue of funds poses as the biggest hurdle in the way of setting up the infrastructure in that place. Only when all these combine in unison, then the same is possible with the backing of major players, the outsourcing representative which in these cases is generally the government itself as well as the people who are taking the gamble of investing their money, i.e., the stakeholders. The reason for global sourcing of products and industry is that there are no infrastructures in place which can help and thus this leads to a situation of chaos and more than that a price hike in the neglected area of concern. Another concern related with outsourcing is that of the organization. It might be possible that an organization does not manufacture a particular product within its industry due to the shortage or lack thereof a raw material, which could only be made available with the permission of the government or the situation is such that the same is made ready at an expensive price which the manufacturer does not allow to come cheap at all. This poses problems at all levels, but acts as an agent of hope and business for the concern which has the raw material with it, in the first place. The organizational concern also details the aspects of supply and demand issues where a product does not reach the channels within a set time frame and this is able to trigger a downfall in the market indicators as well as facilitate in increasing inflation and price hikes. This is an unethical situation, one that is lying on the shoulders of the major players who fleece their customers every now and then. Also the issue of shortage of a product can increase the chances of making it available at a later time at a higher price and thus making people adept at buying it again and satisfying their necessities. These are the loopholes within the marketing framework of running a business or an organization for that matter. An important perspective in this whole discussion has been in the form of the risks associated with global sourcing in particular and thus we shift our attention towards the infrastructural problems related with it. The infrastructural aspects are very closely inter-twined with that of the environmental concerns that have previously been stated in detail in this paper. However, for the sake of providing more insight into this aspect, we will once again underline the key issues, the touch points between the two as well as the remedies that can go a long way in bridging the gap between what is prevalent in the present times and how the same can be changed for the better in the times to come. The most basic and significant aspect behind setting up infrastructure at foreign place is due to the fact that cost is a major issue in this whole equation and in order to meet the same, one needs to be proactive rather than being reactive and thus incur losses. The risk in this scenario is also something to write home about but one that is of less significance when there are potential profits for the key players in sight. Thus this gives rise to the notion of setting up industrial concerns at places and suburbs which at far stretched areas or even in other countries due to cheap labor, access of skilled manpower to the industrial concerns, their problems being met by the industrial units in more ways than one as well as abundance of the key raw materials at the place where this unit is installed. Global sourcing has required the companies to take one step further from the traditional thinking mindset. People are now more open to experimentation then they were in yesteryears and are ready to take risks which were unheard of before. With that, people have realized that their businesses cannot be shelved into a single area or region for that matter and they need to explore new territories and break new grounds in order to reach out to the desired customers and make them into clients. However doing so requires tact, intellect and a sense of direction. Without any of these missing from the whole equation is just like inviting trouble but then again, this entire scenario is full of risks and uncertainties and thus it is better to take this leap forward than grumble about doing nothing at all. In the end, it is important to apprise ourselves that the relation between globalization and outsourcing is a strong one. One can gain so much from their linkage that is pretty difficult to document here. The gains outnumber the negatives in the whole discussion and one should focus on what is achieved rather than moaning on what has been lost in the long run. Globalization and outsourcing are intertwined with each other so much that the end result of their combination can bring in instant results, positive influences and alliances to form up in a quick and steady manner. This assures one and all of the positives that can be spelled out courtesy the linkage of the two potent forces for any developing or for that matter, a developed market. Bibliography Krebsbach, Karen. Near-Shore Outsourcing: With Low Costs, Belfast Lures U.S. Financial Firms, 2005 Valentino, Gina. Staffing Up For Success, 2004 Word Count: 1,790 Read More