Why do we, and why should we, study outsourcing?

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vangoghfan eNotes educator| Certified Educator

Outsourcing is one of the most important and controversial aspects of business today and therefore is a logical subject of study. Most people on the planet are affected by outsourcing to one degree or another.  These people include

  • people whose jobs are outsourced
  • people whose jobs result from outsourcing
  • people who purchase products or services that are the result of outsourcing
  • people who live in countries whose economies are affected, one way or another, by outsourcing

Because outsourcing affects so many people, outsourcing is often highly controversial.  Such controversy is another reason justifying the study of outsourcing. A few of the claims made as parts of this controversy are the following:

  • outsourcing damages the economies of nations from which jobs are outsourced because it raises unemployment rates
  • outsourcing benefits the economies of nations from which jobs are outsourced because it helps to make and/or keep firms competitive and because it helps consumers by keeping prices lower than they would be if outsourcing did not exist
  • outsourcing benefits the citizens of countries to which jobs are outsourced. It lowers unemployment rates in those countries and helps raise wage rates in those nations
  • outsourcing benefits the countries to which jobs are outsourced because it strengthens their economies, raises their standards of living, and thus helps create new consumers
  • outsourcing often involves exploitation of workers in the countries to which jobs are outsourced. Often these workers earn extremely low wages and suffer from very inhumane working conditions
  • without outsourcing, many people in under-developed countries would have no jobs at all or would have jobs far worse than any jobs they are likely to gain through outsourcing

The points cited above are just a few of the many controversies raised by outsourcing. Because it is so controversial, and because it affects so many people in so many different ways, outsourcing deserves to be studied in depth and detail. As is reported in one of the sources cited below,

By the late 1990s, 93 percent of executives in North America and Europe reported outsourcing at least one business function.

This startlingly high figure helps justify the need for thorough study of outsourcing.


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