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Is Outsourcing Good or Bad for Our Economy?

Essay by   •  December 19, 2011  •  Research Paper  •  815 Words (4 Pages)  •  1,956 Views

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Is Outsourcing good or bad for our Economy?

The subject of outsourcing is controversial and critical for our economy. This topic seems to stay in the public interest as companies try to reduce costs and improve their bottom line. There is nothing wrong with outsourcing, however when companies choose this option, it must be for the right reasons and not just to save money.

Organizations who are interested in outsourcing are often curious to know more about the pros and cons of off shoring. By gaining insight about both the advantages and disadvantages of outsourcing, the companies can decide if outsourcing is right for them (Lowe, 2002).

Despite the possibilities of losing many jobs to off shore sourcing, more Americans are employed now, then before. Outsourcing occurs every day in the United States. With outsourcing, the organization can experience increased efficiency and productivity in non-core business processes. Another benefit is that outsourcing can give companies a competitive advantage and will be able to increase productivity in all areas of their business. Many organizations' that use the outsourcing concept are providing more quality time for their products and services to the public. The difference is that many of the outsourcing stays in the states. Another contribution fact is that outsourcing has little net impact, and represents less than 1% of gross job turnover. There can be several disadvantages in outsourcing, one being that the outsource provider might not be only providing services for your organizations needs. Since the provider might be catering to the needs of other companies, there would be no loyalty to the companies' best interest. Also by outsourcing, the company might forget to cater to the needs of their valuable customers because the focus will be on the business section that is being outsourced (Power, 2008)

In fact, the number of jobs lost here in the United States because of outsourcing overseas is far less than the number of jobs being created here. A lot of people can argue this, but since outsourcing can improve profits for corporations, it also encourages consumers to spend more money. Some say that the reason as to why there is a lack of jobs being created in the United States is due to corporations exposing their greed by giving away jobs to cheaper labor overseas. From a business point of view, it is understandable for a company that is struggling to resort to off shoring in order to stretch their bottom line, in order for them to reinvest their money into their product. However, most corporate tycoons such as Ford and General Motors, use these extra dollars to see their personal salaries dramatically increase instead of their overall business. This, in turn, leaves millions of workers struggling and left in the dark in terms of job availability (Power, 2008).

One of the problems that might occur by encouraging outsourcing



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