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Disadvantages and Advantages of Outsourcing and Offshoring

One of the most controversial topics in the area of sourcing is outsourcing of U.S. domestic jobs to areas with cheaper labor rates, such as India and other areas in Asia. Using course materials and other resources, do the following:

1. Detail the reasons why companies are moving labor to offshore locations.
2. Is there an ethical bias with this trend? Do you believe transferring domestic labor to a foreign workforce has ethical issues? If so, what are they?
3. Identify the advantages and disadvantages of this outsourcing trend.

Solution Preview

1. Reasons for outsourcing:
-Rising costs of healthcare and labor in the domestic arena
-Placing workers in a location close to where raw materials are obtained to save on shipping costs
-Lower labor costs
-Lower healthcare costs
-Fewer union issues to deal with
-Even though labor is cheaper, wages are usually pretty good compared to other jobs in the area. This means that the company can attract a relatively skilled workforce for low pay. If someone is unhappy with working conditions, they can leave. The company doesn't really care because there are plenty of other workers to take ...

Solution Summary

This solution discusses reasons for outsourcing, possible ethical issues and advantages in 368 words.

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