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Outsourcing - Essay Example

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Outsourcing begun in America in the 1970s but the industries that embraced the activity were not equipped to handle the results of…
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Outsourcing
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Outsourcing Outsourcing refers to a process where a business pays a firm in a given to provide services that could be possible using its own staff. Outsourcing begun in America in the 1970s but the industries that embraced the activity were not equipped to handle the results of outsourcing. This led to numerous effects on the American populace as well as the economy. In this case, a company that bases in South Carolina plans to outsource its call center to Asia. This will lead to the loss of 120 jobs in South Carolina. Such a move raises concerns on whether the process is legally and morally right and may led a number of business implications.
The society relies on a moral responsibility to follow a system of values and promote human development. Repercussions of outsourcing are evident in America, and they are clearly unethical since American citizens are usually educated in America for the purpose of employment in the same region (Hira & Hira, 2008). Once a company outsources, these Americans face displacement from their jobs (Charara, 2012). Conversely, Asia will benefit since outsourcing leads to increased employment and training in its region. Outsourcing has also contributed to other immoral practices such as discrimination, sexual harassment, as well as wrongful termination of employees in US, Canada or Europe. Asian companies have realized the need to address such factors through devising appropriate insurance policies meant to cover factors such as data security, property, workers compensation, extortion, kidnapping as well as nationalization and all other forms of possible risks.
Presently, outsourcing has become common in America and it is a legal business activity. This is because firms need the freedom to conduct trade internationally besides being able to boost growth within America’s economy. Legal procedures that an outsourcing company follows demands signing of a contract that will cover an array of areas such as the risk of poor performance by the contactor, unforeseen charges, property damages or data loss. The client will also want clearly outlined procedure on how the business will run as well as the day-to-day management. Modes of handling termination or breach of contract are also necessary in the contract.
Positive business implications that are due to outsourcing involve acquiring competitive advantage in the market (Hira& Hira, 2008). This is achievable through costs’ reduction, improved quality, and exposure to advanced technology, availability of labor as well as the ability to combat the competitive threats in the domestic market. The presence of strict labor laws in America also makes companies outsource. The labor laws bar the firms from wrongful termination of contracts amongst other business practices. Labor laws in Asia are less strict compared to South Carolina. Moving to Asia indicates that the company will obtain cheap and qualified labor (McIvor, 2010). Most of the available labor in Asia have English knowledge and are engineering or IT graduates. Outsourcing will also indicate that the managers will have more time to focus on their core competencies and other critical issues.
Negative business implications can also result from language barriers as well as cultural differences when it comes to system analyses as well as design. Language barrier influences employer-employee relationship hence affecting employee morale and eventually the company as a whole (Charara, 2012). In addition to resulting in over reliance in the outsourced company, outsourcing may lead to extra charges if the outsourcing company uses its own time and resources to train the recipients. Higher costs may also result due to the provider’s compliance with local laws
References
Charara, J. (2012). The Impact of Outsourcing on Employees. A guide to Organizations. Business and Economics. Lulu.com
Hira, R., & Hira, A. (2008). Outsourcing America: The true cost of shipping jobs overseas and what can be done about it. New York: AMACOM.
McIvor, R. (2010). Global services outsourcing. Cambridge: Cambridge University Press. Read More
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