Social Impact of Outsourcing on India - Annotated Bibliography Example

Social Impact of Outsourcing on India Viteri, Armando. What are the Problems with Outsourcing to India Today? San Diego: Neubloc. N.d. Print. This white paper talks about the negative impacts of outsourcing of development services with a major focus on India. Looking at the ongoing outsourcing of development services, the paper’s main idea is that there are substantial issues which require India to take its focus to alternative such as Eastern Europe. One of the social impacts of outsourcing to India as suggested by the paper is Attrition. Firms and software consumers in India are facing the problem of attrition which causes social problems such as unemployment on the Indian population. Another social problem of outsourcing as suggested by the paper is quality of work. The paper suggests that 75% of the global IT initiatives outsourced to India fall short of expectations. As a result, people experience low quality of work and poor living conditions. The paper has also suggested that outsourcing kills talent in India, making people dependent on low wages and miserable; at the mercies of foreign investors who outsource development services to India. Unlike other sources which focus on the positive and negative social impacts of outsourcing on India, this source has mainly focused on the negative side. However, it is a bit easier to follow than other sources because it is clear and concise to the point. It is a simple white paper with only a few social impacts in a summarized form. Mendivil, Luis. Ethical Implications: Outsourcing of Clinical Trials by Pharmaceutical Companies. Arizona: University of Arizona. 2012. Print. This printed article is mainly concerned with the ethical perspective of outsourcing to developing countries. The paper focuses on developing countries such as India and China. This annotated bibliography will focus on areas of the source that are concerned with India. The paper also focuses on pharmaceutical industry. The paper is relevant to the topic because when it comes to the issue of ethical outsourcing, social impacts of outsourcing are always exposed. Intellectual property rights agreements and patent regulation has enhanced comfortable outsourcing of pharmaceutical products from offshore locations. This article suggests that one of the mainly outsourced pharmaceutical services in India is clinical trials and Contract Research Organisations (CRO). China and India are considered as the major destination for outsourcing of clinical services and CROs. Mendivil (2012) has identified one of the positive social effects of such outsourcing – improvement of health conditions for people in India. However, the paper also suggests that there are ethical issues resulting from the outsourcing of CROs. This is because the outsourced CROs attract participants who are underprivileged socially and educationally; hence can be easily exploited. The person who benefits from outsourcing to India is the one outsourcing the service; but local communities of India are exploited. There is no social value created in terms of health benefits. This source is different from other sources because it focuses on both economic and social impacts of outsourcing but in this annotated bibliography we have focuses on social impacts; both positive and negative. Greene, William. Growth in Services Outsourcing to India: Propellant or Drain on the U.S. Economy? Washington, DC: U.S. International Trade Commission. 2006. Print. This is a printed working paper for the Office of Economics in the U.S. International Trade Commission. It is the most relevant source in this annotated bibliography because it has a lot of information on social impacts of outsourcing in India. The paper first explains the process of outsourcing in political, economic, and social perspectives. It then proceeds to explain the business outsourcing sector of India in terms certain issues including Geographical BPO concentration, employment, Indian sector size and market share, wage rate advantage, trade liberalization, etc. The paper then provides the weaknesses of business outsourcing sector of India. Greene (2006) suggests that outsourcing in India results in hidden costs such as redeployment costs, cultural costs, layoffs costs, and loss of quality. These effects on hidden costs are mainly social in nature. For example, layoff costs may include the frustrations and stress that someone undergoes when he is dismissed from job. Cultural costs may also entail abandoning one’s culture in favour of outsourced business from abroad. Greene (2006) identifies the social effects of high attrition rates as also suggested by Viteri (n.d.). Corruption, wage inflation, illiteracy, security concerns, and hidden costs are also mentioned discussed in depth by this source. This working paper provides a wide range of information on outsourcing in India. It discusses mainly negative social side of outsourcing on India. Therefore, it agrees with other sources such as Viteri (n.d.). Erber, Georg and Sayed-Ahmed, Aida. Offshore Outsourcing: A global shift in the present IT industry. Stuttgart: Hohenheim University. 2005. Print. This source focuses on offshore outsourcing in relation to the IT industry in various countries including India. India has been used in the most part of the paper, so it is relevant in this annotated bibliography. Erber and Sayed-Ahmed (2005) explored various benefits and costs of outsourcing and based on the theory of comparative advantage, they concluded that offshoring and inshoring countries benefit from international division of labour. Arguably, outsourcing on India causes decreased income and job loss. Erber and Sayed-Ahmed (2005) suggest that outsourcing causes social disruptions which in turn lead to disproportionately negative welfare impacts on the short term. This source mentions the aspect of corporate citizenship in outsourcing from other countries. The paper argues that the inclusion of social organisations and corporate citizenship in outsourcing reduces impact of the social effects on India and other developing countries. Quoting the current protectionism debate, Erber and Sayed-Ahmed suggest that outsourcing lead to social costs of globalisation as organisations are required to provide social safety in the countries to which they outsource their businesses. Furthermore, the researchers argue that social progress cannot be separated from economic progress. Therefore, as India outsources IT services from US it is likely to experience social progress accompanied with the economic progress brought about by such outsourcing. This source gives a unique perspective of outsourcing compared to other sources by providing a link between economic and social impacts of outsourcing on India using the concept of corporate social responsibility. Specifically, outsourcing of IT services from US has improved the economic performance of India, and consequentially improved the social standards of India in terms of various social parameters such as job security, improved employment, improved standard of living, social safety etc. Lee, Eddy and Vivarelli, Marco. The Social Impact of globalization in the Developing Countries. IZA discussion Paper No. 1925. 2005. Print. This discussion paper focuses on outsourcing as an aspect of globalization. Lee and Vivarelli (2005) suggest that outsourcing of products and services through globalisation has led to poverty reduction in India and other fast globalizing countries such as China and Vietnam. Job losses and redundancy which often lead to social problems are minimised through outsourcing because goods and services that could not have otherwise been accessed can be accessed through outsourcing from other countries. This source is also concerned with institutional organization of the labor market as a social consequence of outsourcing. Lee and Vivarelli (2005) argue that outsourcing leads to labour market flexibility in both formal and informal sector. This results in positive employment impact as both an economic and social consequence. On the negative side, this discussion paper recognizes the social impacts of outsourcing as income inequality and social dumping. The paper argues that globalization has induced “race to the bottom” and “beggar thy neighbor” problems which have resulted in social dumping. In this regard, Lee and Vivarelli hold that the regessive race occasioned by labor transfer through outsourcing may result in the reduction of socio-economic capabilities of Indian labor. This source uniquely relates outsourcing (especially of labor and production) with the issue of globalization. It agrees with Erber and Sayed-Ahmed on the issue of social disruptions in India as a result of outsourcing. However, the weakness of this paper is that it does not provide in-depth information on the social aspect of outsourcing. Instead, it focuses mainly on globalization and labor transfer. This relates to outsourcing in some way; hence the paper is relevant in this study. Works cited Erber, Georg and Sayed-Ahmed, Aida. Offshore Outsourcing: A global shift in the present IT industry. Stuttgart: Hohenheim University. 2005. Print. Greene, William. Growth in Services Outsourcing to India: Propellant or Drain on the U.S. Economy? Washington, DC: U.S. International Trade Commission. 2006. Print. Lee, Eddy and Vivarelli, Marco. The Social Impact of globalization in the Developing Countries. IZA discussion Paper No. 1925. 2005. Print. Mendivil, Luis. Ethical Implications: Outsourcing of Clinical Trials by Pharmaceutical Companies. Arizona: University of Arizona. 2012. Print. Viteri, Armando. What are the Problems with Outsourcing to India Today? San Diego: Neubloc. N.d. Print. Read More