• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11

Outsourcing. From the us point of view, how large is the outsourcing phenomenon and what types of jobs are being outsourced:

Extracts from this document...

Introduction

Outsourcing: In this paper we will consider and explore the question of Outsourcing. Primarily what is outsourcing? Based on a simple breakdown we have: out and sourcing (implying putting the source out). But more accurately outsourcing "is the delegation of tasks or jobs from internal production to an external identity along with the elimination of native staff to staff overseas, where salaries are markedly lower"(the tech-encyclopedia). This research will be divided into four parts, primary our focus will be on measuring the importance of outsourcing and the types of jobs outsourced from the USA. Subsequently will take a closer look to insourcing, to what extent is this phenomenon occurring in United States. As a third part, based on economic theory we will analyze the different benefit and cost of outsourcing. Ultimately we will examine what is the stance of the Bush administration toward outsourcing? From the us point of view, how large is the outsourcing phenomenon and what types of jobs are being outsourced: The outsourcing phenomenon is pretty recent in the United States and its quantitative importance is significant. Why did this phenomenon become so popular in so many sectors? Esssentially, technology improvement was the main engine of this new process. Four main sources contribute to the outsourcing trend: The first one is communication technology, an improvement because it offers services from remote locations. Next there is the development of the internet which enables people to work from different locations and to constantly be in contact with their original working location. ...read more.

Middle

Secondly, it is a good way for the companies to escape from different kind of tariff barriers and protectionism policies. Finally, they strive to take advantage of the American workforce and the advanced technology infrastructure available. What does economic theory have to say about the benefit sand cost of outsourcing? In order to answer this question in the most accurate way possible, I will first look at the gain and loss based on economic theory in the USA, and then I will contrast it with that of underdeveloped country or third world countries. Based on the Hecker-Ohlin model, the country will export the good that uses its abundant factor intensively, and will import the good that uses its scarce factor intensively. The United States is a capital intensive country. However, it is scarce in land and labor in comparison to the third world. Based on the theory the US will gain by outsourcing the products that require a lot of labor or land and produce the ones which are capital intensive. Some people might argue that outsourcing has a negative effect because workers will loose their jobs; this issue is true but only in the short run. The country will balance its loss on the long run. Alfred Sauvy, a French economist famous for defining the expression "third world," explains why country will lose jobs. The "pouring" theory states that disqualified jobs will be outsourced; jobs will be lost, but more high skilled jobs will be created, balancing the original loss. ...read more.

Conclusion

tell him that he should not worry because the fact that he lost his jobs will have a positive effect on our economy. He will certainly never understand it. The president have to (play) in order to both satisfy workers and, company owners, on one hand he knows that it is beneficial for the economy but on the other hand he can not corroborate this idea to the population and workers therefore he is showing himself has against it. Others data and statistics on the growing importance of outsourcing: 1 Bardhan, A, and kroll, C. 2003. Reports, University of California Berkeley. The new wave of outsourcing. 2 1-Engardio, Pete, business Week october 17, 2005 issue 3955 Designing dream machines-in India 3 Jacob F. Kirkegaard research assistant, Institute for international Economics .Fall 2003. Outsourcing-Stains on white Collar. 4 Mike Bucken. Computer world October, 2005 (p12). Microsoft to double workers at Indian unit. 5 Kharif, Olga. Business Week online.8/11/2004. The outsourcing Boomerang. 6 Teresko, John. Industry Week, sept2003. Vol 252, p47. Toyota trucks in Texas. 7 Advanced Materials and processes/ February 2005. Industry insiders. 8 8 Kharif, Olga. Business Week online.8/11/2004. The outsourcing Boomerang 9 Samuelson, Robert J, Newsweek,9/6/2004, vol 144, p58. Bush's Jobs Albatross. 10 Sridhar Krishnaswami. Financial Times Information. February7, 2004. Outsourcing of jobs becomes a poll issues in US. 11 Dan Keeler. Global Finance. April 2004 (p4). Powell takes the outsourcing debate offshore. 12 www.whitehouse.gov/infocus/technology/21stcentury-economy/06.html. Bay shore, NY, march 11, 2004. 13 Daniel T. Griswold. National review. May 3, 2004, Monday. Outsource, Outsource, and Outsource some more. ?? ?? ?? ?? 2 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    Until there is a general consensus, at least in the economics profession, on the exact variables that should be used, there will be no way to produce a model for a free drug market that will be readily accepted. The U.S.

  2. Bellway Plc is a holding company with subsidiaries; its main subsidiary company is Bellway ...

    Apart from 2001 when the ratio was 0.11, Bellway experienced cash problems, demonstrated by significant reduction in cash-in-hand and the establishment of a �8,980,000 bank overdraft. The cash was required to finance �145,238, 000 in stock. These two ratios can be affected by 'window dressing' which involves manipulating the working

  1. The Politics and Economics of Outsourcing

    However, other industries such medicine, accounting, and finance are also beginning to outsource as well. India is the country of choice when it comes to sending labor overseas, due to its abundant job market of well trained and highly proficient English speaking workers.

  2. Transaction Cost Theory

    It should be added, however, that Demsetz (1988) has more recently argued that much of the work on transaction cost does not adequately take into account the role of the firm in the acquisition and use of knowledge3. This particular inadequacy of Williamson's transaction cost approach is elaborated by Lazonick (1991, Ch.6).

  1. Corporate strategy of Arcelor: how to penetrate the Chinese market?Second world largest steel maker, ...

    It is probably its main advantage to penetrate the Chinese market. As a company it can bring there its high technical knowledge, as a European leader it enjoys strong political influences necessary to penetrate the Chinese market. An illustration of this is the speech that G.

  2. The Famous Grouse - company profile and exports

    The sales of alcoholic drinks may have heavier restrictions in other countries and levels of sales may be limited to a certain extent by this. In France, for example, there are restrictions on the advertising of alcohol in sports venues, on the field or at the ground.

  1. Evaluate the impact of Nike's outsourcing strategy and factory location on the host nation

    These would benefit the host nation as they could benefit from new production techniques and knowledge on how domestic businesses can improve. On the other hand there are also many costs to the Host nations of multinational operations that also need to be considered, and the benefits outlined above to the host nation are all questionable.

  2. The Ohio Pilot Scholarship Program

    While evidently already a good deal to the families of 3,761 low-income Cleveland students (or else why did they choose it?), the amount could be increased and still be a good deal for the public school system. Consider: If better students are more likely to participate in the program and

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work