Why outsourcing is becoming widely used approach?

Answer 1

companies save tons of money with this kind of approach. they don't have to worry about separation fees and full benefits to pay for employees that are outsourced. plus companies get the experties they would look for due to competition amongst those who offer outsourcing.

Answer 2

I don't wish to be offensive, but every answer above has confused "outsourcing" with "offshoring". Offshoring is a specific type of outsourcing.
Outsourcing is done to reduce costs, increase quality, to prevent bad press or morale (from activities that do not fit the company's image like laying off or relocation). It's also done to allow a firm to focus on key activities instead of trying to be comparatively good at many non-integral activities. Nike is a supreme example of outsourcing: All it does is organize marketing. All other phases in its product's value chain are done by other firms that Nike chooses, like any firm, by quality and cost, irrespective of country of origin. So, sneakers are made in Vietnam and Malaysia. Advertising material is done by US and European firms.
Outsourcing is done because it is easier to find other firms that can do some of the things that your firm is doing, that do it better than you. This makes your firm more competitive by focusing on the things that it still does better than everyone else.

Answer 3

It is cheaper for companies to pay employees who live in an area where the cost of living is not as high. However, this is becoming a regretful practice. Not only are outsourced manufactured products being recalled, but outsourced customer support gives customers a unsatisfactory service experience.

Answer 4

Outsourcing is a new term for screw America.

I love talking about this. Outsourced tech, or call centers cost American jobs. Outsourced manufacturing costs American jobs.

It has become widely used because it's cheaper for a company to hire some Habib in India to do the job for $3.50 per day than it is to hire a professional Amercian at $15.00 per hour. And manufacturing is outsourced mostly to China for the same reason. Chinese workers are paid little to nothing per month to work hour after hour and turn out junk that fills our land fills. However guess what the corporate balance sheet looks great. And that is what is all about. Corporate greed. Some say greed is good. Well it isn't.

The CEO's of these companies are bringing in multi million dollar bonuses while the workers that used to have the job that fed their family and made a quality product is off on welfare or working in what they call the "service" industry. What is the service industry? McDonalds, or any other type of non manufacturing job. While some say tech jobs are service well yes but most of those have been blown off to India. Called AOL lately? Tank you for calling AOL my name is Steve and I like baseball (use a thick Indian accent it sounds better.)

Now as to corporate greed. Corporations only look at one thing. Their balance cheet (yes I did mis-spell it) and to make their stock holders happier. Well corporations not just 15 years ago used to have all sorts of perks for their employees and cared about America. You know the country that made them what they are??? They used to have clergy on the board of directors and lead sessions off with a prayer to God. Now they lead the thing off with what can we do to screw someone today. Lay people off, outsource, cheat on taxes, or sue some poor innocent slob that doesn't have the resources to fight this sort of nonsence. Or spend the evening counting the millions in bonus bucks donated to them by you and me by buying their product when we should instead tell them go to hell.

I hope that helps. And if anyone else wants to chime in on this go to my web site: walkingzombies.com I would love to hear on this subject from others.

Answer 5

Because its cheap.

I had the displeasure of calling Dell on a number of occasions recently. I didn't get my problem resolved because I couldn't understand "Joe" who had a thick Indian accent. When I called back another time, I was put on hold and eventually disconnected. One last attempt had me trying to talk to "Sue" and although she was really trying, didn't have a clue how to follow the flow chart in front of her to resolve my problem.

My response: This PDA is my last Dell product. Period.

Unless there is a concerted effort to effect the bottom line on companies that outsource, it will continue. But, Americans like a good price, shareholders want to see those dividends and jobs will continue to go overseas.

Answer 6

it's cheaper.