Strategic Guide to Outsourcing - Assignment Example

Should U.S. companies use offshore locations to enjoy lower wage rates? Are there ethical issues or concerns about employee morale to be considered?"Student Name Student ID Lecturer Submission Date University The offshore movement of jobs has become an issue not only in travel but also in other industries. Two such nations which stand out in this scenario are India and the Philippines that appear to be the most popular locations for setting up call centers as these countries offer a pond of civilized, scholarly English-speaking personnel who will do the same amount of work as their American counterparts for much lesser money. Shifting jobs to lower-wage countries is a form of what is known as offshore outsourcing and is indeed an increasingly popular practice among US businesses seeking to cut operating costs. Outsourcing in the field of Information Technology is nothing new as in recent years it has changed shape several times to reflect new, and arguably better-planned, organizational objectives. And best practices for creating contracts are now evolving that promise to move outsourcing from a road often pockmarked with potholes and lawsuit-bound to a more reliable relationship for both provider and customer. There has been a general perception that outsourcing means taking jobs away from a region, particularly if we talk about the US. From a financial standpoint, the debate regarding the United States businesses spreading into offshore locations is more pertinent than anything else within the lengths and breadths of the nation since financial health has ensured decent composition of an economically secure nation and US is sure to thrive on the same premise. (Hom, 2005) What remains to be seen is to realize that US authorities could do a lot more than raising the offshore locations’ cutting down on wage rates since they need to understand the bigger picture and forget about the short term incentives, if any, they have in sight. The US businesses would suffer immensely due to the high offshore costs in terms of the employee insurance and the like since it would encourage outsourcing of jobs which would have been easily completed had the individuals been given the offshore guarantees, coming from the US land alone. Much needs to be done in the relevant context and that too quickly. (Domberger, 1998) As far as US is concerned, this could be made appropriate if the offshore policies and strategies are proportionate with the policies that have been laid down time and again within the US. What this means is that the laws that allow for the effective handling of employees as well as the workers within the US need to be followed so that the top management understands what is best for them and how they can contribute in an effective manner towards the well being of the employees and the workers as well. The end result should be one that benefits all and sundry and not only that but also the US government and its related departments. From an organizational standpoint, the US businesses could lose out on maximizing profits if the government does not ensure the high costs attached with the offshore wage issues. (Sessions, 1999) What this will do is to send out negative signals to the investors and it will keep them away from investing within the US economy as a result of the same. It is a known fact that the business entities want to ensure that their individuals get the best salaries and competitive levels of growth as well as a guarantee of their long standing commitment towards the respective business organizations and this could only be made possible if the government drafts certain policies which go down well with the related regimes. From a business standpoint, it is mandatory to make certain that the employees and workers receive best possible wages and this could only be made possible when the US government makes significant headway in the realization of the same. (Jude, 2005) This holds true for not only the businesses within the US regimes but also towards its own people – the common man and woman on the street. The US businesses need to guarantee to their employees that the offshore locations would not cut down on their chances to contribute towards their economy. The companies which have moved out of the US in the recent times include mainly the call centers and related industries which indeed give an idea as to what the company owners have in their mind and how best they have tried to re-position their strategies and tactics with the passage of time. Hence the companies which have their sole focus on technology and its different shades have moved out of US outsourced their business to third world countries like India, Pakistan and so on because the labor in these countries is cheap and the operating expenses are minimal as compared to running a business within US. (Nigh, 1998) There is the aspect of moving the company completely by such owners as well, as stated before and at times, the outsourcing paves the way for their business to succeed, operating it from an offshore campus and thus earning money sitting from a distance. The latter is also an exercise which reaps huge dividends in the related scheme of things. The ethical concerns come directly into the equation since price cuts are seen for the offshore units and the people within the US territories are deprived of work at the hands of these company owners and entrepreneurs. When one speaks of the tenet of employee motivation and morale within such offshore locations, he must understand that the same becomes a plus point for the employee and/or the worker to perform to his best possible levels and thus provide the productivity that is need from him, both in the crunch times and under normal circumstances. It facilitates to the working basis of the organization as well as the people who are on the top – they come to know of the employee’s potentials as well as their organization’s strengths. Also they get assured of the commitment levels of the employees on a proactive basis as well as the intensity of the hard work that they will put in day in day out. (Hira, 2005) This would also include the most strenuous of circumstances. Human motivation seems to exist only if the top management understands the concerns of the employees and tries its best to allay them with the passage of time. However this motivation seems to fade out sooner rather than later if the top hierarchies present within the organizations do not take any note of the basic needs and requirements of the employees and start giving them a tough time all said and done. A conflict within an organization can take place due to differing personalities of the employees or in their attitudes that lead in their linkage with each other. This could also happen due to their norms and behaviors which might not be liked by any one party (person) and thus lead to a conflict of thoughts, ideas, actions and eventual behaviors towards each other. The cost of offshore movement of businesses is an investment that reaps rich results for the pertinent companies yet deprives the US government as it fails to address the issues related with its own men and women – for whom the government is undertaking all the steps and the measures in the first place. The spending that a country does in this regard is directly proportional to the results that it expects in the long run, through the different offshore programs, wage rates issues and so on and so forth. These measures testify the attention paid towards the basic human life which is a very significant step within any state, country or society for that matter. (Grigg, 2003) When the talk goes out loud regarding the employees’ well-being within the US movement of businesses to offshore locations, it has been seen that they have been left on the mercy of the outsourced unit and no remedial measure has been taken to take care of the lower wages which are being offered at the offshore units. But it needs to be understood that the US is making more investments in the outsourcing realms than any other nation presently which is a sign of success for its different business units and departments. (Linder, 2004) In the end, it would be proper to suggest that US needs to do something regarding the offshore units which are working for the betterment of its own businesses and corporations. It is about time these workers are paid in an ethical and moral way – taking care of their wages and working conditions and bringing the same in line with the mannerisms adopted at the US end. The ethical concerns need to be addressed adequately enough to look at finding solutions which are pertinent for the overall well-being of the business entities as well as the people working under the domains of the said businesses. It is high time that these issues get settled by the people at the helm of affairs. (Jasper, 2004) References Domberger, Simon. (1998). The Contracting Organization: A Strategic Guide to Outsourcing. Oxford University Press Grigg, William. (2003). Driving Jobs Offshore: The Crushing Burden of Government Regulation Plays a Key Role in the Ongoing Exodus of American Jobs. The New American, Vol. 19, November 3 Hira, Anil. (2005). Outsourcing America: Whats behind Our National Crisis and How We Can Reclaim American Jobs. AMACOM Hom, Peter W. (2001). The High Cost of Low Wages: Does Maquiladora Compensation Reduce Turnover? Journal of International Business Studies, Vol. 32 Jasper, William. (2004). Losing Americas Livelihood: The U.S. Is Headed for Third World Status Unless We Change Government Policies That Are Driving U.S. Businesses Offshore, Destroying Jobs and Putting Entrepreneurs out of Business. The New American, Vol. 20, January 26 Jude, Michael. (2005). Making the Outsourcing Decision: Dont Overlook These Five Cost Factors When Evaluating Outsourced Solutions. Business Communications Review, Vol. 35, December Linder, Jane. (2004). Outsourcing for Radical Change: A Bold Approach to Enterprise Transformation. AMACOM Nigh, Douglas. (1998). Foreign Ownership and the Consequences of Direct Investment in the United States: Beyond Us and Them. Quorum Books Sessions, Jim. (1999). Cross-Border Blues. Forum for Applied Research and Public Policy, Vol. 14 Word Count: 1,518 Read More