Outsourcing Case

Outsourcing; and age old concept of delegating work to someone for a multitude of reasons. If we study our society, most people outsource many essential things. As typical Americans, we don't produce or manufacture the majority of what we consume. Yet when a major company such as Dell, HP, or T-Mobile, outsource a call center in India, Americans become outraged, stating that "big business is taking jobs away from everyday Americans." Although if a company is going to make such a big venture going to another country in pursuit of a service, there must be a primary purpose, and overall benefit to the company. The reason therefore must be determined, whether it be freeing up American workers to take jobs of a higher priority, cutting down overall cost to leave room for future growth and development, or maybe just because outsourcing provides a better means of servicing the driving factor of all decisions made by a business; the consumer.

"It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy."

-Adam Smith, Economist.

Economist Adam Smith summed it up quite well in this quote, in American society this relates to so many aspects of the consumer market. Here in lies a huge cause of cooperate outsourcing, the fact that some jobs, in this always-evolving world should be placed in others hands. More than anything it has been found that many of these tasks raise company's productivity and ultimately yield a greater profit overall (Taylor).

The causes, and justification for outsourcing have come primarily in the information technology sector, with the largest amount of jobs going to people in India and China (Dutta). In the last ten years approximately 7 million jobs have been outsourced from the United States, with the future projections estimated to be even larger. A 2004 study done by the McKinsey Global Institute stated that when a company moves part of itself to India, for every dollar spent India only collects 33 cents, where the firm, and ultimately the United States accumulates an astounding 67 cents of its original dollar (Taylor). Whether it is a multi million-dollar company or a small business, yielding 67 cents back on your dollar is nothing to be passed down. That is another very pertinent factor in the decision, money. If outsourcing saves money, it is essentially making money.

Another big cause of sending jobs over seas is the ability to give service 24/7. If a customer has an issue at 3am in the morning in Phoenix, Arizona they can call technical support and speak with a trained representative in India. Prior to outsourcing, the customer's problem would have to wait until the American call center opened at least 4-8 hours later. In a market driven by the consumer, and the consumer alone giving services like 24/7 support can be the difference between them buying one product or another,