Globalization of Outsourcing Trends - Essay Example

But the shape of outsourcing is completely changing, now organizations no longer outsource tasks to organizations located within their nations and are only outsourcing their jobs to other nations to achieve the benefits of decline in cost of labor which eventually adds up to decrease in the cost of production. This paper will focus on the historical, current and future trends of outsourcing. History The activity of outsourcing started taking place during the 1980s. According to the assertions of United Nations, the activity of outsourcing started during the period of 1962, when huge companies that used to operate globally were involved in the act of outsourcing certain amount of their jobs, later the activity was given the name of outsourcing during the period of 1989 (UN 81).

During the middle periods of the era of the 1990s, companies realized that outsourcing will assist them in attaining cost efficiency. Due to this realization, companies started outsourcing those jobs and tasks that were necessary to them but were not directly related to the essential parts of the business. They used to outsource tasks such as accounting jobs, data management jobs and jobs related to the security sector. Other entities started forming up that that used to provide services such as human resource management and organization maintenance.

By the period of 2000, jobs started being shifted from within the boundaries of a nation to other nations and this act was named as offshoring. There is a slight difference in the operations of outsourcing and offshoring, in the case of outsourcing jobs are delegated to providers of different services, in the case of offshoring, entities are formed that are controlled by businesses located in other countries (Chadee 414). Current Trends The activity of outsourcing is conducted by several businesses that operate in the 21st century.

Due to increase in the number of outsourced tasks, job creation of developing nations started increasing. After the world experienced the new millennium, managerial positions as well as engineering jobs even started being outsourced. This led to the creation of workforce that got involved in the task of producing reports on weekly basis and continued to increase the importance of outsourcing activities. Services such as customer assistance, support for technical and jobs that are desk based even started to be outsourced.

Several organizations throughout the world outsource tasks to fulfill several purposes and attain several benefits and the main purpose was to eliminate or decrease various costs of running an organization (LOHR, 2013). Businesses that outsource even enjoy the benefit of focusing on its core activities and participate in more creative activities. Those entities that obtain outsourced jobs enjoy the benefits of experiencing skills and technology that did not exist in their own nation due to lack of capital and time issues.

Outsourcing has proven to be assistive to both the developed and the developing nations, but this activity even has another side of the coin which is negatively impacting nations and entities. Issues such as a nation and an entity’