Gov 2 Chapter 26

Outsourcing- “ I just lost my job to a call center in India!!!

Definition

When a company contracts with another company to provide services that otherwise would be done in-house

Ex- Call centers, customer service, payroll and benefits-handled by outside companies

Why outsourcing?

1. Saves $$$$ 2. Less costs in salaries and benefits 3. Focus on bigger issues –markets

opened and Research and Development

4. Uses less technology 5. Allows companies to expand 6. Promotes free trade among nations

Why not?

1. Eliminates communication between companies and clients

2. Dissatisfaction with companies 3. Time wasted on looking for new

outsource partners. 4. Leads to a lack of control over

business 5. Costs and unreliable employees

Pro’s

1. Creates jobs in developing nations 2. Raises standard of living in dev.

Nations 3. Expands growth and educational

opportunities 4. Expands technolgy

Con’s

1. Dead end jobs with no future 2. Little or no upward mobility 3. Drain on work force

Solutions- see article also. 1. Government promote free trade

around globe 2. Tax breaks for businesses here. 3. Gov’t investment in markets

around the world 4.Isolationism/high tariffs 5. Protectionism-taxes on companies

who outsource 6. High taxes on foreign companies.