Final answer:
Executive management opts for outsourcing and offshoring to reduce operational costs and stay competitive, impacting both manufacturing and service industry jobs domestically. Globalization and consumer demand for low-cost goods have driven these trends, leading to significant domestic unemployment but potentially cheaper prices for consumers.
Step-by-step explanation:
The executive management's reasoning behind outsourcing and offshoring decisions often centers on cost savings and competitive advantages. By moving jobs to countries where labor is less expensive, corporations can significantly reduce their operational costs. This practice has affected both blue-collar manufacturing jobs and white-collar positions, such as customer service and technical support, which were previously thought to be secure. Notably, outsourcing refers to contracting jobs to an outside source, and offshoring means relocating some operations overseas.
Globalization has further facilitated these trends. For example, trade agreements like NAFTA have made it easier and more cost-effective for companies to build plants in countries like Mexico, while still selling products in their home markets. Additionally, outsourcing and offshoring were greatly influenced by the desire of consumers for lower-cost goods, which has created a market that supports these business practices, despite the domestic job loss.
While these strategies can improve a company's bottom line, they have contributed to significant job losses domestically, challenging the labor force in developed countries to adapt by developing new skills for different job markets.