Contents

• Introduction 2
• Outsourcing and Off-shoring 3
• Impact of Offshore Outsourcing 3
• Positive effects 4
• Negative Effects 8
• Conclusion 11
• References 13

Description

The world has changed a great deal in the last three decades largely due to the effects of globalization. The advances and innovations in science and technology have revolutionized the modes of communication, interaction and the way businesses are run in the 21st century. The business world has grown by leaps and bounds due to the advances in science and technology. This has given rise to new business models and one such business model is outsourcing and off-shoring. The concepts of outsourcing and off-shoring did exist in the past and their practical applications were limited due to geographical boundaries. However off shore outsourcing has gained momentum in the past two decades, courtesy the advances in the telecommunications sector and the World Wide Web. The world today is a small place as global connectivity has increased. This has served the cause of offshore outsourcing. Off-shore outsourcing started off as an innovative idea in the early and the mid-nineties but today has become an integral part of every multi-national company’s business plan. Every multi-national company in one or the other way has adopted the outsourcing business model to make monetary benefits. It helps the companies in workflow maximization, operational efficiencies, and cost optimization. As Ian Marriott states “Global sourcing has become a mainstream delivery model" (Schneiderman, 2004). A company is benefited by outsourcing its business to low wage countries and third world countries, but it also attracts a lot of criticism in the parent country for the loss of jobs and the low job growth rate.
This essay is aimed at discussing both the positive and the negative effects of off-shore outsourcing. Economists world wide are split between views of whether outsourcing is a boon or a bane to the parent country. To understand the situation better, the author discusses the arguments made both for and against the strategy. In order to do so, the author first explains the concepts of outsourcing and offshore outsourcing.