OUTSOURCING PROBLEMS

The Problems of Outsourcing in Business

The Problems of Outsourcing in Business

Globalization

Globalization is the key in today's world. The world economy is a primarily new concept. The world is becoming a melting pot and integrated systems paired with new technologies are being incorporated in contemporary businesses. We often hear a cliché phrase that the world is becoming a global village, which itself shows how the world has changed in the past hundred years or so, especially over the past few decades. Business schools have integrated cross-cultural courses in their curriculum (Choate, 2005, pp. 1). The western world is studying methods and trends of business in the Eastern world; which indicates that global reach is no longer a theory, but a practicing phenomenon. The concept of globalization has opened new doors in this world and people mingle with each other like never before. Continuous globalization has transformed the world into a global village and opportunities on a mass level are opening up for nations all over the world. On the same hand, globalization has its adverse effects as well and we will discuss these adverse, possible solutions and their evaluation in this paper.

Globalization has given birth to a vast array of problems for economies all over the world. In this paper, we would discuss some problems related to outsourcing. Outsourcing has led to a number of problems in the Western world. In order to reduce the production and operational costs; organisations all over the world have started to outsource their businesses operations and manufacturing sectors to countries where labour is cheap (Goldstein, 2007). Countries such as India and China are the main outsourcing regions. Mainly, the manufacturing giant of the world is China. On the other hand, India is mainly used for outsourcing information technology services. People in India and China are willing to work in low paying jobs due to inflation. The fact has caused much resentment in the Western world. All the jobs that were supposed to be for people in the West are being outsourced. Due to low production and labour costs, companies prefer getting services from developing countries; which has increased the level of unemployment in Western economies (Haugen & Mach, 2010, pp.n.d.)

Many argue that outsourcing has increased child labour in the world. Many big famous American and British companies are indulging in outsourcing activities and getting their requirements complied by child labour. Due to this global trend, business practices are no longer ethical and because of fierce competition, companies are striving to reduce costs which eventually lead to unethical business practices. Laws that prevent exploitation are not universal. Most developing nations are experiencing with an increase in human right violations (Sjursen, 2000).

Another problem caused by global reach of the companies is the garbage factor. Almost all the developing nations in the world complain about companies turning their cities into garbage cans. Environmental factors are a significant factor which needs attention. Most corporations in the world are following the go-green campaign because of the rules and regulations ...