Overall Impact of Outsourcing by American Firms Sample Essay

 Overall Impact of Outsourcing by American Firms

What is outsourcing?

Outsourcing is where a company or individual contracts a third party to carry out a specific business process. It can also mean to hand over control of a public service to another organization in a profitable transaction.  Outsourcing can take varied forms including transfer of employees and business assets from a firm to the contracted party or firm. Additionally, this practice can either be domestic contracting or foreign. In the latter case, outsourcing may involve off shoring or relocating business functions to other countries altogether. One of the reasons why companies outsource through foreign firms is because they want to save in terms of financial costs by exploiting cheaper international rates for labour.

Outsourcing has had both beneficial and detrimental impact on American firms. When it comes to the argument about outsourcing every person has their own viewpoint and this is in accordance to the perceptions as well as directly felt impacts of the individual, organization or scholar.

Positive impact of outsourcing by American firms

Outsourcing is always aimed at cutting on costs. This act has enabled many firms in the US survive the tough and Proofreading-Editingcompetitive markets. By outsourcing, these firms are able to produce more and better products without spending so much money.

Outsourcing also ensures that there is constant supply of high quality products in the US. Most of the companies that outsource are able to gain economies of scale because they are aware that consumption tastes keep on changing. This ensures that the consumers have access to very good products because of the healthy competitive production techniques used by the firms.

Negative impacts of outsourcing by American firms

On the other hand, outsourcing has had a few negative impacts on American firms. Outsourcing has unintentionally created stiff competition amongst companies. In fact, because of outsourcing, there have been many new emerging producers enter the American markets on a daily basis. This means that even the older producers have to embrace high efficiency and cater to a demanding clientele in order to survive the markets.

Additionally, outsourcing also leads to complacency by some firms. The firms that have outsourced in order to concentrate on what they are best at doing normally suffer the complacency syndrome. They become very comfortable producing particular products and forget the dynamic shifts in consumer tastes and market trends.

Outsourcing has also on several occasions led to a compromise on company security. Many American firms have had their data leak to their competitors because of outsourcing from the wrong firms.

On the consumer’s perspective, outsourcing has detached the relationship between consumers and American firms. This is because there have been several firms which have changed their products yet they were initially well known for producing specific products. This creates a gap between customers and firms and hence there is no loyalty.

Many employees have also lost their jobs because of outsourcing. When a company decides to outsource certain services to another country or even company, there is shift in labour prospects. Hence many American employees can no longer feel secure in their jobs because if the company decides to outsource, they are the biggest losers.

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