Describe outsourcing and why it is controversial?

Outsourcing is the process by which organizations take a service that was being performed by employees in house and hire an outside company to perform that service. This process can be controversial for a number of reasons. First of all it usually involves laying off employees of the organization that is outsourcing. Today it is even more controversial when it involves offshore companies, sometimes called off-shoring. This is when large numbers of jobs in a country such as the US are outsourced to companies in other countries, generally India. Companies such as Dell Computer have moved many of there technical support positions to companies oversees. This results in a lack of tech jobs in the US. The advantage to the organization is that they generally cut costs by hiring a company from a country where the employment costs are much lower. Outsourcing can also be beneficial to organizations when they outsource a particular service that is not part of their core competency. In other-words hiring outside experts, which has always been done in areas like accounting and law. Outsourcing in a global economy can be dangerous for countries with a higher standard of living such as the US, because employees that are earning let's say $40,000 a year can be replaced by an equally or better educated person in a country with a lower standard of living for as something like $10,000 a year. Eventually that leads to wage erosion in the country with the higher standard of living until everything eventually, evens out which could take a long time.

outsourcing that we generally know is to outsource some jobs of a company to better firms and concentrate on companies compatent area. This can increase efficiency of company,but bring down employment and related costs, but in overall out look most companies show better financial performance on taking an outsourcing decision.But soon after or just before a outsourcing decision whole departments may disappear causing employment related problems mainly layoff. If we look from national perspective lot of people are loosing jobs due to outsourcing. unemployment is not good for any nation.

Outsourcing is when you send an occupation from where it has traditionally been done to another place outside of the tradition. Many times we think of outsourcing as sending jobs outside of the US, but in fact we outsource within the US too. If you think about a school district that used to employ people to take care of the grounds and painting as district employees but know they hire a company to come and paint class room during the summer and maintain the grounds during the year, this is a type of outsourcing. This type of outsourcing does the same for the dirstrict that sending a call center to India does for a business, it makes their operating costs go down and their productivity go up. In the case of the school district it is more about operating costs than productivity but productivity is still a small part of the equation. The advantages to outsourcing is higher productivity and profit (or smaller expendatures.) The disadvantages are consumer loyalty, negative media/ poor corporate image, loss of higher paying jobs for community and nation. I would reccomend a government policy that protected manufactured products only, call centers should not be limited as they are not high paying jobs in the US but manufacturing jobs traditionally have been how American's think of themselves as makers of the worlds goods. A policy would be to inflate prices of goods made outside of the US by companies that have moved jobs outside to raise profits and eliminate US jobs. This would make the US made products more appealing because their price would be presumed less as compared to their forgien counterpart.