The Positive and Negative Effects of Outsourcing Research Paper

The Positive and Negative Effects of Outsourcing - Research Paper Example However, outsourcing impact on the economy is widely debated in order to ascertain its inevitability or otherwise. In American society, the debate has not lasted as yet and both sides have some solid evidence to favor their arguments. Although the argument that denies the inevitability of phenomenon claims it to be a major cause of unemployment in America, the positive impact of outsourcing on the economy cannot be rejected altogether. As a matter of fact, there is a fair amount of subjectivity in the questions like where, when and how outsourcing should be employed and the detrimental effects of outsourcing on US job market are a reality but another reality is the importance of these outsourcing companies to the US economy. Although cost is the key factor while making a decision of outsourcing, it must also be a strategic decision at the same time. A strategic decision takes into account the capabilities of company's resources, challenges at hand, benefits and key factors that favor outsourcing. The strategic outsourcing prevents the outsourcing of goods, services, and labor that are critically important to the function of the company. At the same time, strategic outsourcing can take into account the expected impact of an outsourcing decision on a national economy. The establishment of a separate formal Officials authority might be a good idea to evolve a regulating mechanism and to strike a balance in outsourcing decisions. Nevertheless, purging it all together is not an option.   Pacing with rapid changes in business dimensions has become a demanding challenge for business leaders in diminishing geographical limitations. Technology in general and cutting-edge communications in particular drastically redefines business operations in terms of resources. The globalization has vast and vivid repercussions on business domains and business leaders have to be very knowledgeable and current on prevailing trends in human resources, purchases, and supplies to manage these effects in their specific domain. The globalization of businesses and advancement in technologies to support these global business operations have reduced the geographical limitation of engaging low cost human and material resources while managing supplies of products produced overseas in the spur of the moment they are required by the businesses. Today, the stage is all set for businesses to engage low-cost resources through outsourcing; a concept that can considerably slash the production and service costs while targeting the profit maximization. Companies all over the world are now striving hard to reduce the cost of their products or services by efficient management of resources, purchases, and supplies. Jacques1 defines, â€Å"Outsourcing means more than just the purchase of raw materials and standardized intermediate goods. It can be defined as a long-term, result oriented partnership of company with an external provider for activities that would otherwise have been pe rformed in-house.†Ã‚  Ã‚