Why Domestic Outsourcing Is Leading Americas Reemergence in Global Manufacturing by Pearce - Article Example

The paper "Why Domestic Outsourcing Is Leading America’s Reemergence in Global Manufacturing by Pearce" is a delightful example of an article on business. There are many articles that address various issues concerning business operational strategies within a dynamic and competitive global environment. Why domestic outsourcing is leading America’s reemergence in global manufacturing by John A. Pearce, 11 is an example of such an article. The article address issues of key concern in the trade including options United States have on whether to outsourcing or not domestically and the key considerations. The article addresses these options from five different perspectives. The factors include increasingly competitive U.S. labor costs; increasingly competitive domestic production costs; increasing productivity of the U.S. workforce; improved synchronization of production with other business Functions and incentives from federal, state, and local governments. The author supports his opinion with a credible correlation between the various scenarios that United States companies have outsourced domestically and internationally and the returns in terms of labor cost and profitability. The author seems to be in support of a sudden shift in outsourcing back to the U.S domestic market. This thorough analysis has been attributed to the abundant availability of natural resources in the U.S and the increasing investment in capital-intensive services combine to offer a national infrastructure that attracts many manufacturing companies more than before.
John A. Pearce is a reputable author with vast experience in issues of business strategic planning and globalization and thus makes the article more credible. He communicates to the readers of his work who are also majorly business scholars and researchers authoritatively to articulate his issues and concerns. In this particular article, he critically echoes his opinions on issues of domestic outsourcing and the reasons he feels the United States should consider outsourcing domestically. More often than not companies may outsource a given line of the production process due to inadequate facilities and high labor costs. The article has expanded on the government’s contribution to ensuring domestic manufacturing thrives. These according to the analysis of the article are achievable through proper incentives to local companies. Furthermore, the article is in support of the continuous shift by American multinational companies back to the United States due to the new and exciting opportunities that were previously lacking. For instance, increasing recognition of the United States as a main provider of production for outsourcers is more evident among manufacturers more than before. The article singles out companies in the chemicals, glass, minerals, coal, food and beverage, petroleum among others as shifting production to products United States or are investing to keep it there. The article uses these examples to further support the main idea that the U.S. is increasingly becoming the home of outsourcing just as it was before the shift.
Wal-Mart, for instance, has been hesitant to relocate all his overseas outsourced production lines in various parts of China. This has been due to the faith in overseen production lines and the labor force. Analysis of the article also points to the fact that for decades labor costs in most other nations have lower than in the U.S. Employers in these nations thus not only will pay a reduced level of wages, but they never have to pay tax on unemployment, worker’s compensation and other employment costs connected with domestic workers. In these nations the larger the firm, the more employees it may outsource and the bigger the savings will be. These costs could escalate over, in the long run, reducing some of the differences between the United States and foreign wages. Though this may be skeptical, the economic downturn in the future in the US has been great fear and many companies have been reluctant in moving with the new trend and outsource with the US-based countries.
The unique issue addressed by the article is the manner in which prominent international providers of manufacturing-based abroad are experiencing austere reversals of fortune. The comparative advantages they enjoyed before having shifted, and labor cost is steadily rising likewise. Critically, the author’s echoes are logical in expanding knowledge of the already existing macroeconomic theories on investment location and issues of comparative advantage.
In conclusion, the article is logical in addressing issues of outsourcing as it highlights the concerns that everyday business organizations go through in identifying investment and production locations. The article is also rich in facts on the current paradigm in global outsourcing.