Outsourcing has been a major topic during previous presidential campaigns. The presidential candidates usually try to entice the electorate into believing that they are the most equipped into preserving American jobs and lifting domestic employment standards. Outsourcing on these platforms has always been sold as something which brings more harm than good contrary to what I believe. Even companies, out of competition and rivalry usually hammer at each other on the basis of outsourcing strategy, their goal being to invoke the feelings of the people and attract them towards their brand (Kokemuller, 2016). Given the current economic environment, all businesses have a right to do what is best in their interest to ensure that they are actively pursuing their objective, which is usually to maximize wealth. Outsourcing or minimization of cost of operation is a key element in achieving this objective.
Wickford (2016) defines outsourcing as the business exercise of hiring or engaging an outsider; an external firm or even a person, to execute contracted operations which could have otherwise been done by employees. Many companies usually employ this tactic based on the expertise requirement and labor cost advantages. From a company’s perspective, outsourcing seems like a good deal for business. By seeking to employ cheap labor from overseas, these companies reduce labor costs which in turn lead to increased productivity and profit, something which has always been of great importance to many companies. With the current level of international trade, outsourcing gives these companies the freedom to expand internationally. Also, money saved from outsourcing can be reinvested to other ventures hence increasing employment opportunities and even increase tax revenue for the national government.
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The business process of outsourcing is a key requirement if not a necessity in the current economy if businesses are to fit into the current free enterprise system. Maximization of Profits can be achieved in two ways, namely by increasing sales or minimizing costs something which is achievable through outsourcing. The world has become a global village and outsourcing is one of the ways through which businesses can explore markets which are abroad thereby expanding their markets. These parent companies may also act as ambassadors in the foreign nations helping enhance cohesion between nations. Outsourcing does not mean seeking labor from foreign countries only. One can contract even domestic companies to provide certain logistical services which are none-core to the business, such as IT services data collection and analysis amongst others. Outsourcing is only in the best interest of the business as it only strives to find beneficial ways to contract out non-core services and focus on their core duty something which does not seem to compromise their ethics.
Many people against outsourcing, argue that these companies only focus on their benefits which are usually short term and only exploitative since they export services abroad for their low wages and inferior working conditions. They also argue that outsourcing has a negative impact on employment, innovation and earnings to Americans. By sending manufacturing services overseas, America’s exports capacity diminishes hence lead to an increase of trade deficit which in turn lead to inflation which American people cannot compete with due to the reduction in the number of employment opportunities (Wickford, 2016). The companies which are found guilty of outsourcing are usually negatively targeted and sometimes their products or services boycotted within their domestic market a good example being Nike in 1999. Other arguments put forward against outsourcing include confidentiality issues when domestic clients’ data are taken oversee for analysis without client’s knowledge or permission. Outsourcing has also been found to cause a decline in the number of graduates registering for certain courses since the target jobs are usually exported abroad.
All These arguments stem from the perspective that American companies have the obligation to protect American jobs. In all its fairness is a duty which lies with the government. It is the duty of the ruling government to see that the business conditions within the country are attractive and conducive to companies. The government can employ tools such as tax subsidies and holidays to domestic companies to enable companies to remain within the country. Other than that business is in the business of making a profit, and it could only be logical to make strategic moves such as outsourcing labor to achieve the desired balance between cost of operations and profit. As long as these companies maintain high-quality standards and export services to countries whose laws are related to American laws and her ethical standards, then there is no problem in outsourcing business services.
In conclusion, even though outsourcing decisions could sound unpopular with some of the general population due to their effects in the long term, we cannot reverse this phenomenon. Due to the current economic market with rising operation cost and stiff competitions, companies must go back to the drawing board and look for the best mix of operations which could maximize profits and reduce costs. Outsourcing seems to provide the best way out in this situation. To create a win-win situation between the domestic employees, the companies, and the government, then the society in conjunction with the government and businesses must join hands and work together towards the development of outsourcing standards to guide them.
References
Kokemuller, N (2016). Is Outsourcing an Ethical Practice? Retrieved from http://smallbusiness.chron.com/outsourcing-ethical-practice-80639.html
Wickford, H (2016). Negative Effects Outsourcing Has on Organizations. Retrieved from http://smallbusiness.chron.com/negative-effects-outsourcing-organizations-25351.html
