Is outsourcing work to other countries a good thing or a bad thing Essay

Is outsourcing work to other countries a good thing or a bad thing - Essay Example This essay discusses that in an increasingly globalized world, the physical boundaries for international and even domestic firms are vanishing fast. The interconnected nature of the world has made it possible for the firms to continuously look for better ways of conducting their business. Outsourcing is also considered one such step towards achieving efficiency and reducing costs. Outsourcing is not a recent phenomenon as firms at international and national level often engaged themselves in such activities since long. Some of the reasons for outsourcing include reducing the overall cost of business as well as regaining or developing the competitive advantage by outsourcing those activities which do not fall under the core competencies of the firms. International firms also take advantage of this as they can achieve the economies of scale at relatively rapid rate as well as get the benefit of cost advantage over their competitors. It is however, important to understand that due to out sourcing of the jobs and functions, resources from one country move to another country. It has been politically debated that due to outsourcing, jobs have been relocated to other countries and as such domestic jobs are being relocated to other countries. There is a widespread debate that as a result of outsourcing the overall number of jobs available is reducing as well as they also create skill shortages. The relocation to new jobs therefore not only results into getting low paid jobs but also significantly reduce the overall quality of life of the workers. One of the key reasons as to why I have chosen this topic is the overall magnitude and volume of outsourcing work to other countries. US is probably the largest country which has outsourced many activities to countries which can offer American firms a distinctive competitive advantage. Above all, this topic can also affect the way future dynamics for the employment will shape and might help in determining my own future once I st ep into the practical field. This paper will therefore discuss whether outsourcing work to other countries is a good or bad thing. Competitive Nature of the Business Before discussing different arguments and issues, it is important to discuss and outline the theoretical background of the phenomenon of outsourcing. It is argued that the business in current times is changing very fast and the overall dynamics of doing business have rapidly changed. The way firms compete with each other therefore requires that the management of the firm becomes more pro-active in approach and design and develop strategies which can offer it a consistent and sustainable competitive advantage. There can be different reasons for such increase in capital however, globalization and the resulting opening of the markets for international firms has become one of the key reasons as to why the international and domestic firms have increasingly open to new ideas and strategies. Globalization has also allowed the firms to move beyond their traditional physical boundaries and access the markets which are either more profitable or cost effective. (Schniederjans, Schniederjans, & Schniederjans, 2005). Such nature of markets therefore has made them more competitive. Outsourcing It is important to understand that in order to decide whether a firm should outsource or not should consider its overall goals and objectives of the firm. A critical evolution of the firm’s overall objectives and goals therefore require that the firm must decide in its best interest before going for outsourcing. It is also critical that a firm must get a clear and well-defined insight about its core and non-core competencies because outsourcing of non-core activities of the firm is more dominating. It is important therefore that in order to successfully outsource, the correct identification of the core competencies of the firm is essential and failure to do so may result into spending of firm’s resources on things which can significantly impact the firm. Outsourcing is defined as â€Å"