The negative and positive effects of outsourcing to developing Essay

The negative and positive effects of outsourcing to developing countries - Essay Example Outsourcing can be taken to refer to the downsizing of an organization's workforce, whereby those tasks previously performed by these individuals are alternatively performed by automation or the tasks are exported to another base for completion especially overseas where the tasks can be completed cheaply For instance, India and china are known to provide the largest pool of labour in the manufacturing industry, most notably the clothing industry. For the purpose of this report, however, outsourcing is defined as the provision of domestic tasks or assignments from internal production to an external organization particularly in the area of fashion (Eriksen, 2005). This definition can be supported by Ross (2004) who argues that many immigrants, especially from developing countries work in the apparel industry toiling in sweatshops where the violation of laws governing their wages, safety and child labour is rife (Ross, 2004). According to him, there are about a quarter million sweatshop workers in the United States all employing immigrants from the third world, hence producing a competitive race to the bottom among low-wage countries. Since its inception, therefore, outsourcing has become a phenomenon that has taken the world by storm (Haynes, 1999). Accordingly, it has brought about the growth of information technology, assisted globalization thereby generating multinational societies that have necessitated certain situations where stiff competition tends to take control of our lives (Eriksen, 2005). A manifestation of this cut- throat competition is witnessed in the frenzy with which research and development are occurring in business and most notable in fashion where trade mark names in the clothing industry are the order of the day. Take for instance labels like Van-Heusen, Marks and Spencer, Nike and Adidas just to mention but only a few. You are not fashionable if you don't don any of these household names (Rosen, 2002). Other areas where outsourcing is taking centre stage include computer programming positions, administrative works and production assignments, with third world countries such as India and China ending up being the highest end-users for this outsourced work (Haynes, 1999). The same competition is also found in the efforts shown by companies in cutting expenditure and attempting to offer the best of services ever, which has finally catapulted itself into outsourcing. This situation is becoming more frightening each waking day because more and more companies are emulating their rivals in business (Eriksen, 2005). On the other hand, outsourcing is considered by majority of business people as a win-win state of affairs but regrettably has not been always the case. In fact it is associated with plenty of shortcomings that are beyond the understanding of most people. The current major disadvantage of outsourcing is that the first world nations have policies in place governing outsourcing that are too inclined to one side to be able to offer a level playing ground for big and small companies alike, thus leaving the only alternative open for them to outsource (Haynes, 1999). Given that outsourcing generally leads to lowering of the prices for products and services, then most organisations are forced to outsource so as to remain in business. This outsourcing makes sure that products and services that are produced are both cheaper and of high quality and at the same time get better sales than those with only quality but costing a fortune, consequently making profits sky rocket (Haynes, 1999). Evidence available indicates that for the previous couple of years, the United States economy has emerged as a budding economy, significantly and irretrievably impacting strongly on the global market (Haynes, 1999). One of the most momentous impacts of this robust economy lies in the area of outsourcing to foreign countries. That is why the developed