International business Wipro case - Essay Example

There is plenty of available labor for programmers and engineers at low cost in India. This paper provides the answers to three discussion questions. Outsourcing work has become a very popular business strategy in the 21st century. This business tendency began to manifest itself in the latter half of the 20th century. General Electric is a giant company that due to its size has become a bit static and its overhead and operating costs have been on the rise. In order to take corrective action to stop the rising cost from hurting the profitability of the company GE when it started doing business with Wipro in 1989 that the Indian based firm could served as valuable business allied and partner.

The company began to outsource a lot of its contracts to Wipro because the company could provide valuable technical assistance at fraction of the cost of doing the same tasks in house. By the late 1990’s the outsourcing of contracts to Indian companies help GE achieve $300 million in savings. These savings allowed to company to become more competitive since lower overall costs meant the company could offer more competitive prices. These types of outsourcing contracts help the US economy instead of hurting it.

The general public sometimes thinks that outsourcing is taking jobs away from American Citizens. I guess a simplistic view of the issue would anyone think that since companies such as GE eliminate labor requirements by outsourcing, but the truth of the matter is that outsourcing has saved millions of US jobs by allowing American firms to compete in the global marketplace. When a company out sources certain tasks it lowers its operating costs which enables firm to lower its overall cost structure so that companies such as GE can compete with foreign companies operating in developing nations.

Such process improvements allows the manager to fulfill the goal of maximizing shareholder’s wealth (Garrison & Noreen, 2003). As