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Reaction paper 6 - Article Example

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Outsourcing on the other hand means either to recruit foreign workforce in the local company or to employ a foreign workforce in the foreign…
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Reaction paper 6
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Reaction paper 6

Download file to see previous pages... The once famous off shoring and outsourcing strategies are not as beneficial to the companies as it used to be. Companies like Ford motors are reconsidering closing their subsidiaries located in the foreign countries (Here, there and everywhere par. 4-15).
The reason for this major reorganization is the constantly increasing cost of labor in countries that once provided the cheapest labor in the world. The increasing cost of labor in countries like China deprives the companies that have their existence in China, an opportunity to generate high revenues. Second, most companies have realized that it is highly risky to produce in a foreign country away from the major market target. The disadvantage this creates is a low response to the change in consumer needs due to the extended time between acquiring the information and implementing a strategy to respond to the consumers needs. This renders most companies less competitive. Third, the off shoring has another side effect that is the increased transportation cost due to shipments made over a long distance. Fourth, the distance proved to destabilize the supply chain of most companies. The named emerging pitfalls of off shoring have forced most companies to move their operating location back home. This major reorganization also applies to the service industry. This trend is likely to cause an explosion of job opportunities in the U.S, thus increase the employment rate. Therefore, the U.S job market could run short of employees in the short-term (Here, there and everywhere par. 4-15).
There is a heated debate about the effect of technology on employment. Some argue that the increasing sophistication in the technological environment reduces the level of employment as computers and robots replace human labor. This section of people justifies their point by sitting the increase in productivity levels in the U.S while the unemployment rates decrease. Another section of people with a ...Download file to see next pagesRead More
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