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Friday, January 4, 2013

Essay on Outsourcing



 Essay on Outsourcing

What exactly is outsourcing, and should it continue, given the impact on the current US unemployment rate and US GDP? then justify your response from one of the ethical perspectives that we have used. (utilitarian ,imanuel kants, or aristotle.)




Outsourcing is fast becoming a common trend among numerous U.S. companies. This type of business process works whenever a company contracts an individual or a company to perform a particular job or function. This process involves two different organization or companies who enter a contractual agreement which involves an exchange of payments and services. This may be in form of information technology or I.T. services, janitorial, customer service, or security services. Typically, the job or position outsourced by the company is regarded as non-core yet important to the business. For instance, a telecommunications firm may outsource its janitorial operations to another company which specializes in the maintenance or janitorial services. Similarly, a hotel may outsource its I.T. operations. The outside company that provides the services are commonly referred to as service providers or third-party providers (Outsourcing Mag 1).

One of the most common reasons why companies today prefer outsourcing over hiring an employee is to cut cost and save. Most companies choose to outsource in order to avoid high taxes, government-regulated employment benefits and other costs associated with hiring an employee. Outsourcing on the other hand, offers reduced expenses and allows the company to save and focus their resources towards the firm’s core business (Outsourcing Mag 1). 

Although outsourcing proves to be beneficial to the company, many argue that this greatly affects the country’s unemployment rate. This is because more and more U.S. companies are outsourcing services overseas. Numerous companies prefer to outsource services in developing countries because of lower employment salary. U.S. corporations are also hiring overseas as a way of expanding their operations there. For instance, companies today outsource their call-centers in countries such as the Philippines and India because of the low wages in these countries (Outsourcing Mag 1).


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This trend has immensely affected U.S. workers. According to reports, Caterpillar, Inc. has hired more than 15,000 new employees last 2012. However, half of this number is employed outside the country. Similarly, UPS is reportedly hiring more workers overseas as their way of responding to the biggest demands of their services abroad.  These, along with the outsourcing decisions of other companies have resulted to an increase in the unemployment rate last year. In fact, it has risen to a record low of 8.3 percent. In addition, the country’s unemployment rate has been constantly above 8 percent for the past 42 months (Purushothaman 1). 

Despite of the unemployment statistics, outsourcing should be considered as a positive choice. It should be looked at in the perspective of cost-benefit analysis, where in the company utilized its best option or course of action. Doing so, allows them to become more competitive in the global market arena. According to the Categorical Imperative Theory of Immanuel Kant, “all moral law or obligation is the main focus of reason.” More than this, the theory argues that moral laws apply to only rational agents. Therefore, applying the categorical imperative to outsourcing would mean requiring the company to take measures in order to boost their profits and avoid possible losses. Ultimately, this will create benefits in part of the shareholder which can affect others. In this case, outsourcing may seem like a bad idea since it promotes unemployment. In the long run however, it will prove to be beneficial as it allows the company to stay competitive which will then help improve the nation’s economy which, in turn could result to the creation of more jobs inside the country (IEP 1).

Cited Works


Immanuel Kant. 2012. IEP. 4 January 2013 <http://www.iep.utm.edu/kantmeta/>

Outsourcing. 2012. Outsourcing Mag. 4 January 2013 
<http://www.sourcingmag.com/content/what_is_outsourcing.asp>

Purushothaman, Uma. Outsourcing. 21 August 2012. Euroasia Review. 4 January 2013
<http://www.eurasiareview.com/21082012-the-outsourcing-debate-in-us-elections-
analysis/>


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