Globalization, outsourcing and social justice: Does globalization justify outsorcing - Thesis Example

Globalization should serve the greater good, and not the interests of powerful elites. If it does, then that would make globalization, and outsourcing in particular, justifiable. Introduction Due to the expansion of globalization new business strategies like outsourcing emerged. Outsourcing is a necessity for businesses nowadays. Outsourcing is largely driven by the emergence of new information and communication technologies (ICTs) like the Internet. The outsourcing of business operations to other countries seems to be an important component of the mechanisms of economic globalization (Marjit & Acharyya, 2003).

The concept of outsourcing is very complicated and, as expected, has provoked fierce debates in different countries, especially in the United States. This essay analyzes whether globalization justifies any means to outsourcing. The analysis focuses on how outsourcing generates widening income and social inequality and unemployment in different countries. This essay argues that globalization does not justify any means to outsourcing because it promotes two major social injustices: widening wage inequality and higher unemployment rate.

Globalization and Outsourcing The outsourcing trend has become more and more related to globalization. Recently, businesses have become increasingly globalized. The formation of the North American Free Trade Agreement (NAFTA) and other regional agreements, as well as the emergence of the European market with a standard currency, contributed to the growth of global trade. This occurrence has forced businesses to expand globally in terms of production, service delivery, and target markets (Wagner, 2000).

These developments have given businesses numerous prospects in terms of accessing cheap labor, targeting additional markets, expanding research and development, and attaining wider economies of scale. Furthermore, numerous businesses have been given the chance to build globally known brands for their products and/or services. In highly developed countries standardized commodities have become increasingly important (Abrahamson, 2004). However, globalization has also created numerous problems, including widening social inequality and unemployment.

Globalization has major economic impacts. Global trade liberalization has fostered economic progress in numerous countries. For instance, export-driven development has been fundamental to the business strategy of numerous Asian countries; this, consequently, has improved the standards of living of their people (Pogge, 2008). The principles of free trade are derived from the law of comparative advantage introduced by David Ricardo, an English economist. According to this law, countries must focus on generating and exporting the products/services manufactured at a cheaper cost to competing foreign markets.

Nevertheless, trade liberalization has resulted in higher rates of unemployment in highly developed countries as businesses increasingly engage in outsourcing (Yotopoulos & Romano, 2007). Businesses increasingly prefer to outsource their production and service-based operations to developing countries because of cheaper labor outlays-- a pattern which is at times called offshoring. Major U.S. firms have been highly supportive of offshore outsourcing. All of these companies have strongly supported their unrestrained capabilities to outsource jobs and have no