Question

"Some business and political leaders argue that offshoring is dangerous because it can move jobs from developed countries to less-developed countries. Others argue that although offshoring might displace workers in the short run, in the longer term, everyone benefits by having developing economies create new industries, products, and markets for products and services that create high-level service and managerial jobs in the developed world. In recent years, some economists have argued that offshoring today is having a negative impact on service and professional employment in highly developed countries.

Using resources in your library or online, write about 100 words in which you present two arguments for and two arguments against a U.S. company offshoring the management of its customer relationships to technical and managerial personnel in a less-developed country."

Answer 1

Answer and Explanation:

Arguments for U.S. Company offshoring:

1. Cost savings:

Companies usually offshore manufacturing or services to developing countries where wages are low, thus resulting in cost savings. These savings are passed on to the customers, shareholders and managers of these companies.

2. Skills:

The competitive advantage of nations often means that some countries or regions develop a much better ecosystem for certain types of industries. This means there is better availability of skilled human resources in that region for specific types of tasks. For example, India and the Philippines have a large pool of English-speaking, college educated youth; as well as a mature training infrastructure; that makes it ideal for business process outsourcing. Therefore, many companies choose to offshore certain business functions (e.g. call centers for customer support) to these locations.

Arguments for U.S. Company offshoring:

1. Quality Control:

While companies can set quality standards for work performed by foreign employees, language and cultural barriers, as well as overseas supply chains, can present barriers to quality control. Products made overseas can be flawed because of out-of-date or worn equipment in overseas factories, or substandard raw materials. In 2000, for example, Masterlock had to recall more than 750,000 locks made in China. Worn dies at the Chinese factory produced locks that could be pulled apart without a key.

2. Public Image:

In times of high unemployment in the United States, sending jobs out of the country can hurt a company’s public image. Fewer regulations in other countries can make it less expensive for American factories to operate, but environmental damage and labor abuses that make the news can tarnish the image of companies involved there. Consumers have organized boycotts against companies that use child labor or sweatshops to produce clothing and shoes. In response, companies such as Nike, Dell and Gap have established codes of conduct for their suppliers.