Offshoring and Outsourcing Term Paper
Term Paper The debate of outsourcing or offshoring American jobs rather than utilizing our unemployed citizens has been a highly controversial topic in the past decade. Outsourcing has many advantages to business firms such as lower production costs, lower labor costs, improved quality of work, more time to focus on domestic operations, and increased profits which help stimulate our economy. The opposing view argues that by outsourcing jobs to other countries it is causing higher unemployment in America and stimulating the economies of other nations rather than our own by providing them with jobs, resources, facilities and capital. Though there will never be a universal agreement on this matter both sides do have merit to them and make an interesting case on whether or not the shift toward a global economy is a good or bad thing. In looking at the many benefits a firm can attain from outsourcing jobs it is clear why they would choose to do so. The lower labor costs in foreign countries allow domestic firms to have their products produced much more quickly and efficiently for fractions of the cost. Nike is an example of a very successful company who opts to do most of its production overseas. The use of foreign labor and the need for employment in other countries has allowed Nike to mass-produce its sportswear, which is then shipped back to America and sold with huge markups on price allowing a tremendous profit margin. Firms can also benefit from lower production costs when performing processes in foreign countries is less expensive due to lower material costs. Offshoring is also beneficial when the domestic firm is already an international business because shipping from the foreign country doing the production may be much less costly then shipping it overseas from America. The savings from removing shipping costs alone would be very beneficial if the company is large and doing a lot of international sales because the large volume and frequency of
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