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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