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Tuesday, June 5, 2012

Outsourcing to a Foreign Country

Outsourcing to foreign countries has been a growing trend for our nation's manufacturing and business applications industries over the last decade. Outsourcing is defined as the practice of having certain job functions done outside a company instead of having an in-house department or employee handle them. These job functions can be outsourced to either an individual or even another company outside or inside the United States. More and more companies, whether big or small, have turned to outsourcing to enable their company to grow and become more successful.

Many large companies including DuPont, General Electric, and Wachovia have been outsourcing jobs to other foreign countries in the last decade or so. Some of the major jobs that are being outsourced to these countries include communication services, help desks, business applications, and specialized manufacturing to name a few. Outsourcing has become very attractive to all these big name companies and has driven them to outsource more and more jobs every year. Foreign countries that have low labor, production, and energy costs are prime candidates for outsourcing, and many firms have been taking advantage of these low costs.

India, Mexico, China, and Japan are seen as the big four when it comes to our nation's outsourcing. Since many companies have noticed the drastic decrease in cost if they choose to outsource to a foreign country, the companies are closing down their factories in the U.S. and opening them elsewhere. This is creating a huge impact on our nation's economy because it is causing many Americans to lose their jobs and inevitably lowering the standard of quality for these companies. The average American factory worker has seen his or her job being terminated and shipped overseas to a foreign country time and time again and cannot do anything about it. A company that has chosen to outsource jobs will be saving a lot of money in the long run but is inversely affecting our nation's workforce and economy.

Outsourcing started to flourish in the early 1990's during Bill Clinton's presidency. In 1994, NAFTA (North American Free Trade Agreement) was put into effect by Clinton to ultimately open trade routes to all countries. What seemed to be a promising stride for our nation's companies unfortunately took a turn for the worst for the American worker. Not long after NAFTA was put into effect, many companies decided to move their factories across the boarders into Mexico and Canada. Since Mexico and Canada have lower labor and energy costs as compared to the U.S., companies decided to take advantage of this opportunity. Many of the steady factory jobs that were offered to the American worker would now be outsourced to another foreign country and negatively affect the U.S. economy. Any sort of company, big or small, could now be able to outsource a job to another country and be able pay a much less wage to a foreign worker. Many businesses decided to adopt outsourcing and left ma ny Americans out of work. Our economy began to falter and the average American worker was forced to live on a minimum wage while the higher paying jobs were outsourced to a foreign country.

There have been many negative effects due to companies relying on outsourcing over the past years. Companies seem to only care about the well-being of their business and aren't focusing on how they affect the world around them. Despite all the risks and setbacks, outsourcing to a foreign country will always be an eye-catching solution for many companies. Companies will more likely chose to send jobs to foreign countries to reap the benefits of lower labor and energy costs than keep their business entirely within the states. This type of action will cause many Americans to lose their jobs, but the company will be making more money than they would in the U.S.

Another substantial problem with outsourcing that has been growing consistently throughout the years has to do with the kind of jobs these companies are sending overseas. When a company chooses to outsource certain jobs, they usually never develop a full proof plan that will enable them to overcome potential barriers. Call centers that are outsourced to a foreign country are one of the major barriers a company might face. Many Americans that call a company to get information about a product or need help installing something run into problems with the person who picks up the phone. Many computer companies have their call centers in countries that use very heavy accents, and it makes it harder for the customer to communicate with the person. This barrier has been a big problem for companies since customers were becoming dissatisfied with the service the call centers were providing. This is just one of the many problems companies have been facing over the years with outsourci ng, and they need to develop better strategies to overcome these barriers to become successful in the future.

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