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Outsourcing: the Effects on the Global and American Economy Essay

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Outsourcing: The Effects on the Global and American Economy


College of Business

Albany State University

504 College Drive

Albany, Georgia 31705

Willie Silas

Outsourcing: The Effects on the Global and American Economy

Abstract

The objective of the paper is to provide the definition of commonly used terms with outsourcing, an analysis on the state of outsourcing in the present global economy, and a review of the advantages and disadvantages of outsourcing. This paper isn’t solely focused on the denotation of outsourcing, but to show the positive and negative effects of this decision.  

Key Words:
Cons-outsourcing; off-shoring; offshore outsourcing; outsourcing; perspectives; pro-outsourcing; subcontracting; supply chain; governance; global market; BPO;

I. Introduction

Since the Industrial Revolution, companies have tried to figure out how to take advantage of their competitive advantage to increase their markets and profits. The norm for most of the 20th century was a large integrated company that can own, manage, and directly control its assets. In the 1960s, companies decided to use diversification to broaden corporate bases and take advantage of economies of scale. By creating a lot of diversity, companies expected to keep their profits safe, even though expansion required unprecedented layers of management to keep everything in order. Afterwards, organizations that tried to compete in the global market in the 1970s and 1980s were at a disadvantage by a lack of flexibility that resulted from outdated management structures. To increase their agility and innovation, multiple large companies developed a new strategy of concentrating solely on the heart of their business, which required identifying critical processes and deciding which could be outsourced.
Outsourcing was not formally identified as a business strategy until 1989 (Mullin, 1996). Yet, most companies were not totally self-sufficient; they outsourced...

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Outsourcing: the Effects on the Global and American Economy. Anti Essays. Retrieved June 22, 2018, from the World Wide Web: https://www.antiessays.com/free-essays/Outsourcing-The-Effects-On-The-Global-710775.html