Reference no: EM132172680
International off-shoring has become more prevalent in the 21st century. Outsourcing to China and Mexico for manufacturing has become almost second nature for most companies, allowing for low-end manufacturing to completed at much lower costs to companies. However more recently business process outsourcing has become much more common to countries like India for IT related services. With the recent rise in of the Internet and reduction of international communication costs this option allows companies to save on hefty overheads associated with doing these tasks in house.
Some may argue that off-shoring can create value for companies and the economies. This allows western companies to use low-cost yet high-quality labor, which in turn leads to cost savings. In the end some people may lose their jobs if these changes take place, often in the end off-shoring is a win-win solution.
Critics of off-shoring make three points on strategic, economic, and political grounds.
Strategically, even if core functions can be moved off-shore, what is left of the company?
Economically do developed economies really gain more?
Politically many large US companies claim to be global companies and they should neither represent nor be bound by American values anymore.
With what my company does manufacturing and importing of flooring and textiles from China we have a very large need to offshore parts of the business. We have entrusted parts of our IT to a company in India that helps write scripting for us. We have a third party company in China to address production delays and issues on site in real time versus the day lag we have by doing business from the states. I feel without the option to off-shore some of this work we would not have the quality of products and customer service we currently have.
In the end I think companies need to look for what is best for their business and figuring whether off-shoring will work for them or not.
References
Mike W. Peng, P. (2017). Global Business. Cengage Learning.