Contents

• Introduction 2
• Outsourcing 3
• In shore & Offshore Outsourcing 3
• Benefits of Outsourcing to the Organization 4
• Cost Benefits 4
• Increased Focus on Core Processes 5
• Reduced Capital Investment 6
• Risk Sharing & Mitigation 7
• Disadvantages of Outsourcing 7
• Loss of Process Control 8
• Threat to Data Integrity & Security 8
• Lack of Motivation and Negative Publicity 9
• Hidden Costs 10
• Benefits of Outsourcing to the Nation- The U.S.A 10
• Impact of Outsourcing on Developing Nations 12
• Recommendations 13
• Conclusion 14
• References 16

Description

This report is based on the following requirement –
A large number of firms from developed economies outsource various works and operations to emerging / developing countries. However, global outsourcing has become a controversial strategy raising conflicting debates. Proponents of global outsourcing point to the benefits. Some of the key points they mention include the following: The outsourced work provides needed jobs that help decrease poverty in developing countries. By reconfiguring value chains to the most cost-efficient locations, companies in the home country can reduce production costs, allowing them to hire more workers and reduce prices charged to customers, etc.
On the other hand critiques argue that foreign suppliers frequently operate sweatshops, factories where people work long hours for very low wages often in harsh conditions. Some outsourced work is performed using child labour. Many factories have poor environmental standards and generate excessive pollution, etc.
The Minister of Trade and Industry in a developed economy (chose any one of developed economies – e.g. France, Japan, UK, USA, etc.) is considering whether his government should pass a law that would restrict the ability of firms in his country to outsource work to countries that pay lower average wages than his country.
Assume you are an Adviser to the Minster, and he has asked for your advice on this issue. What recommendations would you make to the Minister on whether the country should pass a law that would restrict the ability of firms in the country to outsource?