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Example research essay topic: Outsourcing Jobs To Foreign Countries - 1,636 words

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Outsourcing Jobs to Foreign Countries Outsourcing jobs formerly held by Americans to the foreign countries is one of the major issues that are currently discussed in various circles. While the opinions on this subject differ, after careful analysis it is apparent that job outsourcing is totally wrong not only it results in job loss for the United States as a nation, but also the quality of work the foreign countries can come up with is really sub standard. Outsourcing is a management strategy that farms out non-core organizational activities to vendors who specialize in these activities in order to execute them more efficiently. In the public sector, the bureaucrat transfers resources to the vendor such as real estate and employees and, in return, receives a commitment for a certain level of service.

Outsourcing includes the management and operation of computer facilities, the maintenance of information networks, the development of computer infrastructure and applications, and the training and support of employees. Public administration scholars have warned that consultants today enjoy greater management responsibilities for government programs than ever before and that a handful of demoralized, politicized, and incompetent bureaucrats cannot control them. Regrettably, empirical studies rarely pursue these important insights. Consider, for example, the marginal role consultants play in the studies of researchers from the URBIS center at the University of California which pioneered the power politics approach for organizational computing research. These scholars argue that large organizations contain diverse social groupings, each with its own agenda and objectives, competing over resources, influence, and autonomy using every means available. These "groups of coalitions" or "federations of groups" battle over what kind of computing equipment to acquire how to organize access to it, and how to standardize and regulate its use. (Gaudio, Louis M.

and Myron G. Myers, p. 73) Power politics scholars have demonstrated how elite members who are not technically skilled manipulate the acquisition and application of technical skill within the organization to ensure that computers are made to fit whatever agenda they already had in mind. Hence, according to this approach, consultants are merely the "weapons" of bureaucrats and therefore have no independent political standing of their own. Likewise, most of the empirical literature on outsourcing ignores politics. Economists study the production and transaction costs of outsourcing but rarely address less tangible political variables. Even scholars who debate the tradeoff between efficiency and control when IT operations are outsourced rarely write about vendors as "political creatures" battling against bureaucrats and consultants over power, influence, and control. (Gaudio, Louis M.

and Myron G. Myers, p. 80) Turning to the literature on consultants, we find plenty of generic "cookbooks" in which seasoned consultants tell readers how to be a good consultant but politics is never the primary topic. Several scholars who reviewed this type of literature concluded that the reports of management consultants are either misleading or designed to legitimatize their role as "obligatory passage points" in organizational decision making. A handful of scholars address IT consultants as "political creatures" but they tend to overstate their power or even demonize them.

Similarly, scholars from the developing world resent the political power of western technical consultants who build information systems in their countries on behalf of various donor organizations. Finally, there is a small but excellent body of scholarly literature about the political work of IT consultants who are employed by large multinational corporations such as the "Big Five" accounting firms. In this literature, consultants are portrayed as individuals whose technical and socio-political skills are inextricably intertwined and who are skilled at translating social and organizational problems into technical ones. Estimates of the actual number of jobs outsourced overseas are sketchy. About 500, 000 jobs in the technology sector could be sent abroad over the next two years, which would amount to a still moderate 5 % of the total 10. 3 million workers believed to work in the technology sector. Deloitte Consulting predicts that as many as four million service jobs could be outsourced over the next five years, which would still amount to only about 3. 5 % to 4. 0 % of the total U.

S. service sector. (Gaudio, Louis M. and Myron G. Myers, p. 111 - 112) In many cases, these jobs might have been filled by foreign immigrants or by firms buying entire offshore facilities. The free flow of labor and capital is vital to a healthy global economy. At the same time, part of any increase in foreign incomes should come back to the United States in the form of either new purchases or investment.

Many jobs cannot be exported overseas. Face-to-face contact with customers remains vital, local control is often integral to the management process and logistical and security concerns may require domestic locations. Indeed, financial institutions need to exercise special care to insure against identity theft for their customers. That said, the export of some service jobs to other nations should help drive U. S. workers and capital to even higher valued-added industries with cutting-edge innovation.

This, in turn, should lead to higher real wages. Adjustment is never easy, but American workers have demonstrated their flexibility and responsiveness to change over the past two decades. Our competitive advantage will continue in fields requiring higher skills and knowledge. This is why employment among college graduates has expanded by over two million jobs in the past year and why the jobless rate among these more educated workers is only around 3. 0 %. (Gaudio, Louis M. and Myron G. Myers, p. 117) As the recovery matures, look for job growth to show further improvement over the next several months.

A resumption of higher capital spending, a more competitive dollar, and a rebuilding of inventories should press industrial output higher. Meanwhile, productivity gains -- vital to long-term prosperity -- should remain at a healthy pace of 2. 5 % or more but cannot persist at their recent explosive rates. This means that companies will need to resume hiring to meet their output needs, thus easing some of the anxiety over the loss of jobs overseas. If you consider, for example, Hewlett Packard to be a manufacturing company and therefore put its revenues into the U. S. manufacturing column, you " ll be kidding yourself.

Very little that HP, Dell or many other high-tech manufacturers make is built in the United States. The exodus of actual, physical manufacturing throughout the high-tech supply chain has been moving slowly (and sometimes rapidly - the ' 70 s and early ' 80 s saw a breathtaking exodus of semiconductor assembly to Malaysia, the Philippines, etc. ) out of this country for many years, and that trend has accelerated dramatically in the past two years for many component and semiconductor manufacturers and just about all board- and system-level manufacturers. As of about a year ago, 30 percent of outsourced high-tech board- and system-level manufacturing - i. e. , done by contract manufacturers (CMs) such as Selection, Flextronics, Celestica, Sanmina-SCI Corp. and Jail Circuit - was being done in such low-cost labor regions as China, Mexico and Eastern Europe, according to iSup pli Corp. (an industrial analysis firm). The target, according to chief executive officers of these top-tier CMs, is for that to reach 60 percent to 70 percent in 2004, with most of that going to China. (Gaudio, Louis M.

and Myron G. Myers, p. 145) More and more U. S. high-tech companies that manufacture internally are closing U.

S. plants and replacing them with plants in China or Mexico (see Kemet, for instance) or simply outsourcing the work to a CM in China or foundry in China, Taiwan or Singapore. That is what is meant by manufacturing to those of us in the manufacturing business, and that is the exodus of manufacturing that concerns us. Increases in productivity have nothing to do with the movement of actual, physical manufacturing of tangible high-tech goods from the United States to China; the plants the CMs have built there are as automated as any here, and productivity is on par. It's simply that building goods there is cheaper, or so it seems. Contract manufacturing is expected to be a $ 140 billion business in 2005, doubling from 2002 levels in 2006. (Gaudio, Louis M.

and Myron G. Myers, p. 173) Regarding productivity of the Chinese, that's irrelevant and also misleading, again because of the fact that the plants there are as automated as the U. S. factories they replace. U. S.

jobs are going directly to China. A machine operator here is not replaced by 12 persons there, but by one. Not to be concerned about the movement of leading-edge, high-tech manufacturing to China is not to be concerned about the future of U. S. technology leadership or the ever-eroding ability of the United States to supply our own military / homeland security needs. Technology leadership is dependent on manufacturing leadership.

If we let go of the latter, we risk losing the former. Today, in addition to manufacturing jobs, we " re losing both high-paying software and electronics engineering and other white-collar, technical jobs at an alarming rate to China and India. Silicon Valley's unemployment rate officially stands at 8. 5 percent; the real rate is 15 percent to 20 percent. Meanwhile, Motorola just announced that it will hire 1, 500 engineers in India, not because their engineers are better than ours, but because they " re cheaper. (Gaudio, Louis M.

and Myron G. Myers, p. 191) This is something our country's government, financial institutions and corporations must take seriously, because if we don't, we will decline as a nation. Bibliography Gaudio, Louis M. and Myron G. Myers. Outsourcing best practices.

McLean, VA: Logistics Management Institute, 2003. Venkatraman, N. Beyond outsourcing: managing IT resources as a value center. Sloan Management Review 38, no. 3 (Spring 1997): 51 - 64.


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