Effects of Outsourcing on Companies Employees and the Economy

Effects of Outsourcing Timothy Nicotera University of New Hampshire Abstract This paper will look through the effects that outsourcing has on American business, the economy, and social issues now as well as into the future. Outsourcing is a growing trend among companies large and small as an attempt to gain a competitive advantage in both local and global markets. There are both positive and negative impacts of this way of doing business that need to be realized and accounted for in order for the economy and American business to remain strong. There are future implications that have not been thoroughly analyzed and will be discovered further down the road. By using several research tools it is possible to piece together what we do†¦show more content†¦The increased capital gains also in turn make the company look more attractive to investors, buyers and stakeholders as it converts fixed costs to variable costs(stand 2009 p.1). These gains can then put more money towards more revenue based expenditures. It is much simpler and cost effective to p ass on redundant day to day maintenance chores to IT technicians outside of company. These freed up resources help companies improve their customer focus. With more adequate to manage customers their responsiveness is not only quicker but better adapted to their customer needs and wants. Companies can also lower risk by having a portion of their entity outsources to other areas. The companies that are outsourced to take over a certain amount the of risk and are often better at managing it as it’s there area of expertise (William 2003 p.1). The time saved as the company is able to focus more on its core objectives they are better able to accelerate their company into the future. With the numerous benefits of outsourcing come substantial negative side affects to the company. When outsourcing, is done overseas there is often substantial cultural barriers that must be overcome. These differences may unintentionally hinder progress as the companies may be working towards different objective. These cultural differences can cause issues between the company that’s outsourced to and the customers that they willShow MoreRelatedThe Impact of Outsourcing on the U.S. Economy Essay561 Words   |  3 Pageswhether offshore outsourcing has a positive or negative effect on the U.S. economy. It may actually depend on which perspective you take on it. As stated by Hira and Hira (2005), outsourcing in the services sector is a major shift in how the economy operates and will have serious impacts, both positive and negative, on the trajectory of economic growth, distribution of income and the workforce. However, there are many factors to take into account when cons idering globalization. Companies must familiarizeRead MoreOffshore Outsourcing Essay1693 Words   |  7 Pagesdiscuss offshore outsourcing and the effects it has on the American worker in a technology environment. We begin with the scope of the problem and how it has changed the economy for better and for worst. Various figures representing miscellaneous data about off shoring will be represented. The topics include the background and nature of offshore outsourcing, reasons for outsourcing, why trading promotes gain, current economic standing from outsourcing, and finally how outsourcing affects wages andRead MoreCompetition And Sustainability For Reducing Production Costs1467 Words   |  6 PagesCompetition and sustainability in the third-party IT contracting industry in the United States are driven by economic factors such as outsourcing, globalization, mergers, and acquisitions (Rose-Anderssen, Baldwin, Ridgway, 2011). In turn, these factors shape and transform third-pa rty IT contracting companies (Jancikova Brychta, 2009). IT outsourcing (ITO) is a business solution for reducing production costs (Desar McGee, 2010). This approach is used frequently in the operation of call centersRead More How Outsourcing Affects the Economy Essay760 Words   |  4 PagesOutsourcing is nothing new. It is a difficult issue to handle and tackle, supporters and detractors agree on one thing. That outsourcing will not be eliminated to a complete. That is why I wrote on what is outsourcing, how it affect the economy, and can it be stop. The word outsourcing can be defined in a numbers of ways depending on the type of service and the form of relationship with the supplier. Also referred to as contracting out or buying in. May be the delegation or handing over to a thirdRead MoreCompetitive Analysis of Business Cycles1301 Words   |  5 PagesBusiness information is not perfect at Wal-Mart Stores: economic experts are not dismayed or surprised with the unemployment rates at the stores. Employees at Wal-Mart stores are likely to be affected by frictional unemployment. This occurs at a result of everyday changes in the companys economic structure, which is likely to lead to the death of the firm. Employees at Wal-Mart are likely to get tired of the old bosses and old jobs. Bosses at Wal-Mart find the claim that subordinates are producing unsatisfactoryRead MoreOutsourcing Of Aviation Maintenance Practices And The Effects Of Globalization1352 Words   |  6 Pages Outsourcing of Aviation Maintenance Practices and the Effects of Globalization Matthew Wilkerson Embry-Riddle Aeronautical University Worldwide May 16, 2016 â€Æ' Abstract Within the aviation industry outsourced maintenance practices have become increasingly more prevalent to maintain current assets. There is generally three processes currently being utilized by the airline industry: outsourcing specific maintenance needs, in-house operations, and lastly, a hybrid approach, which entails a combinationRead MoreThe Negative Effects of Offshoring Customer Service1648 Words   |  7 PagesThe Negative Effects 1 The Negative Effects of Offshoring Customer Service Lisa Morris Com 120 December 1, 2009 Karen Halusek The Negative Effects 2 The Negative Effects of Offshoring Customer Service She is very excited. She just came home with her brand new computer. She and her husband had been saving every extra dollar for quite some time and they were finally able to purchase the computer they had been wanting. They succeededRead MoreOutsourcing, The Key to Globalization Essay examples995 Words   |  4 PagesThe concept of outsourcing in the Unied States goes back to 80s. But it was in the 90s that really companies began to use it more and more and they found out that this is something that really works for them. Outsourcing is defined as the practice of subcontracting manufacturing work to outside and especially foreign or nonunion companies. This concept became very widely used in practice today in the United States. Firms such as IBM, Sprint, ATT, Dell Hewlett Packard, and Novell are someRead MoreIndian Bpos Essay906 Words   |  4 Pageschapter, impacted jobs outsourcing in the BPO industry? The global economic downturn has impacted jobs outsourcing in the BPO industry as it has helped to be one of the largest job creators in India. Due to this, many companies had to increase their operations output and therefore employ more and more people to keep up with the expanding trend. One of the major impacts, being growth and maturity, had an effect on the BPO industry and contributed to the outsourcing companies and continued growthRead MoreDoes Globalization Only Have Adverse Effects On Large Corporations?915 Words   |  4 PagesDoes globalization only have adverse effects on large corporations? In theory this reading should provide the reder with the information that Globalization is not just a concept that effects large corporations, but also small businesses along with their employees. Through the following, effects such as, outsourcing, telecommunications, and developments in new technologies. The first adverse effect is outsourcing, this business strategy has its advantages and disadvantages, one is that it can help