Negative and Positive Effects of Outsourcing

Published: 05th October 2011
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Outsourcing also called offshoring is shifting a business function from one country to another.

It is used to reduce the cost of business. Even though Outsourcing has positive impact to the company and to the citizens of the country. Outsourcing also have a negative impact in the country, it has left some American unhappy, jobless and loss trust on the corporations or company who practice Outsourcing and the Outsourcing trend is failing to meet with general approval in the United States. WA is concerned about the impact of outsourcing and many feel that long term outsourcing will harm or affect American Economy and Workforce. There has been a debate about the Positive and Negative effects of outsourcing.



For the Positive effects of outsourcing, The reason of some companies who use outsourcing is because it will lessen their needs to maintain facilities and they are not taxed, it will allow them to focus on the core competencies of the company, Increase the speed and quality of delivery for outsourced activities, increase employee productivity, reduce cash outflow, there will be a free space in company buildings for other use, one theory on outsourcing states that outsourcing boosts the U.S. Economy by stimulating trade and creating more jobs, Outsourcing also works in both ways because many jobs in America are jobs that have been outsourced to America by foreign companies and some companies claim that bilingual workers in foreign-based call centers will benefit people who live in the U.S. But who speak English as a second language.



Some people are against Outsourcing because of the negative effects of it, they say that Outsourcing is bad because of loss of jobs for Americans, especially those in customer service or technical fields, it reduces employment opportunity and people will experience financial problems which they will need to limit their money on spending on their needs and this will hurt the economy of the certain country because it will lower the quality life of its citizens. There will be loss of direct control by the company over the management, the quality problems because American workers outrank overseas workers in terms of the size and availability of the labor force, education level, relevant experience, language skulls and turnover rate, some customers have problems understanding the accent of some agents, the problems above usually lead to unhappy customers, employees and unions.



So, to ensure long term financial success, companies must properly serve their customers, regardless whether or not this entails outsourcing work. They must balance on saving money and providing the customer with the quality products and services.

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