American Corporations that has outsourced jobs - Essay Example

"Global access to vendors, falling interaction costs, and improved information technologies and communications links are giving manufacturers unprecedented choice in structuring their businesses. Through outsourcing, companies can now dump operational headaches and bottlenecks downstream, often capture immediate cost savings, and avoid labor conflicts and management deficiencies" (Doig, Ritter, Speckhals, & Woolson 2001). However, outsourcing has its drawbacks as well. When companies choose to farm out high capital manufacturing assets to overseas or other outside entities, they may also unknowingly be giving away those skills that have helped them to stand out in the marketplace.

For instance, consider the company Gibson Greetings, which is the oldest greeting card maker in the United States. The company began to face hard times in the 1990s as it started to run out of cash. At that point in time, the company's management team chose to outsource its manufacturing. It was not very long before the company started to run into supplier-management problems. These problems caused the company to lose its place at large retailers. "In the meantime, its competitors had been investing in more efficient printing and production technologies.

Ultimately, one of those competitors acquired Gibson. The final nail in the coffin was that Gibson got out of the manufacturing business and started outsourcing." Gibson Greetings is a NASDAQ publicly traded company headquartered in Cincinnati, Ohio. The company has 4,600 employees and enjoys annual sales of $546.2 million. Gibson was incorporated in 1895 and, at that point in time, was known as The Gibson Art Company. It belongs to two industries: greeting cards and converted paper products.

Coming in just behind Hallmark and American Greetings Corporation, Gibson is the third largest greeting card manufacturer in the United States. Gibson also makes gift wrap, gift bags, boxes of cards, calendars, party favors, and the related. Subsidiaries to the business are located in Memphis, Tennessee; Mexico; and the United Kingdom. "As Gibson readied itself for the 21st century, the company with the industry's hottest licensed properties, strategic alliances, and ethnic market leadership would have to overcome prior losses of customers and mismanagement of finances in order to reach its goal of becoming the leader in the social expression industry" (About.

com 2008 and American Greetings 2007). This is not to say that the choice to outsource always ends in this fashion, but it definitely can. If it is done properly, it can really turn a company around by lowering costs and, therefore, boosting their bottom line. However, it is necessary for each and every company that considers outsourcing critically analyze the pros and cons of doing so before taking such a big step. Simply assuming outsourcing will work for just anyone can be a fatal mistake.

MemoTo: Whom It May ConcernFrom: Your NameDate: 2/15/2012Re: Outsourcing Gibson GreetingsThe purpose of this essay was to identify an American company that had outsourced and to discuss that company in terms of its nature, size, and power, as well as how it presents itself to both stockholders and the