Transcript Outsourcing Notes Ch 26

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 inhouse
 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.