The Benefits And Costs Of Outsourcing For America

3280 words - 13 pages

America is known for being the land of opportunity. With a very high quality of life and low unemployment rates, many people have left their countries, ways of life, and even families for the opportunities that exist here. The American people also have a great sense of pride and want to protect what is enjoyed here. Americans are grateful to work and enjoy the fruits of their labor - and rightfully so. In spite of this, America has recently had to find ways to remain competitive with other countries.In recent years, due to catalysts such as the Internet, there has been an increase in global economics, or businesses conducting business all over the globe and collaborating with other countries. Because of this, each country is forced to remain competitive, which has required companies to keep prices low. Sometimes, companies change their production strategies to remain competitive. Sometimes, companies lay people off to cut costs. This has many Americans are fearful that they will lose their jobs to other countries by means of outsourcing. The definition of outsourcing is the delegation of tasks or jobs from internal production to an external entity, such as a subcontractor. Most recently, it has come to mean the elimination of in-house staffing to overseas staffing, where salaries are markedly lower. It became a popular buzzword in business and management in the 1990's (Outsourcing, April 12, 2007).Outsourcing has been occurring for decades and has affected the manufacturing sector for a long time. Since cheap manual labor was available overseas, corporations became profitable by outsourcing tasks to foreign markets.In the early years of the United States' history, American companies outsourced tasks of building covered wagon covers and clipper ships' sails to workers in Scotland, with raw materials imported from India. England's textile industry became so efficient in the 1830s that eventually Indian manufacturers couldn't compete, and that work was outsourced to England (Kelly, 2004).The roots of modern outsourcing are associated with the computer bureau of the 1960s, which offered business support services such as payroll data processing. The outsourcer's investment into the infrastructure would be recovered from its client group, who in return received up-to-date processing services for a significantly less amount than acquiring and maintaining its own operations.In the US during the 1970s, it was a common practice for companies to outsource their payroll processing to out of state vendors for processing tasks. During this time, most of the tasks were outsourced to out of state service providers, rather than overseas service providers. In the 1980s, most common tasks that were outsourced included accounting services, payroll, billing, and word processing and in the late 1980s, outsourcing started to emerge in the business world (Moore, 2005).Meanwhile, in technology circles, the focus on outsourcing turned from its efficiency to its economy...

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