Colegio de San Juan de Letran: Name: Lazo, Myles N. Course: Ent112 Date

Colegio de San Juan de Letran
Name : LAZO, MYLES N. Course : ENT112 Date :

02/04/2021
Section : AC2A Professor : MRS. MA. NANCY T. BALASAN, DBA
Instruction: Explain the Pros and Cons of Global Outsourcing

GLOBAL OUTSOURCING: Weighing the Pros and Cons
In everything we do, we can tell that there will always be considered a bright and a dark
side. Outsourcing offers us a number of advantages but it also has its downsides which have to
be considered before we venture into any course of action relating to this.
Let’s start with the Pros— Outsourcing can maximize profitability for the company.
Companies usually decide to outsource the services and production of goods if they believe they
can save them money and thereby maximize the income of the business. The most widely cited
example has to do with labor costs. Companies can consider outsourcing and/or offshore to a
country with lower wages. While others can see local employment reductions as a detrimental
impact of outsourcing, the improved earnings that may result are impossible for businesses to
resist. Companies can also outsource to save themselves the cost of training to recruit all in-
house staff or to scale up their company. Next is, Outsourcing will boost economic efficiency.
Often, businesses are outsourcing because of the opportunity costs of performing or supplying
products or services themselves. For e.g., a tech startup CEO could outsource HR because she
thinks like her time will be better spent meeting venture capitalists and bringing her tech team up
to speed than handling employee benefits. When highly qualified workers are able to outsource
low-value jobs and spend more time on high-value tasks, companies begin to benefit.
Outsourcing supporters argue that they will also maximize total productivity in the economy by
outsourcing jobs to individuals who have the required skill level for those tasks and encouraging
highly skilled employees to be more efficient.
Another pro is that Outsourcing will spread jobs to developing countries from the
developed ones. Such outsourcing proponents argue that it is possible that outsourcing (and
offshoring) to foreign countries results in the loss of some jobs, but that less developing nations
profit and that those advantages outweigh the losses to wealthy countries such as the United
States. People may object to this, they argue, but in the developing world to which businesses
outsource, outsourcing will lead to higher pay and more work opportunities. This is seen by
some observers as an asset, claiming that it will narrow the distance between developed countries
and developing countries over time. And the last pro I can give is that, International relations
can be intensified by outsourcing. Some experts feel that there’s less possibility that they are to
go to war against each other, the more countries trade with each other, and the more they will
collaborate in search of common interests. And the degree that outsourcing reinforces the
relationship between businesses in two or more countries, it may also reinforce the relationship
between those countries' governments.
Now that I’ve explained the Pros, we can now take a look at the Cons so that we can
know more about global outsourcing. First, this leads to employment loss. The downside of
outsourcing that attracts the most coverage is the lack of jobs (for whichever country is doing the
outsourcing). The idea that employers in other nations which get work openings they have not
had before is little consolation for members of, say, manufacturing communities hard hit by
factory closures. Also, there is insufficient transparency. Consumers constantly want to know
where their items came from and who made them. This sort of transparency is made complicated
by outsourcing. A corporation could outsource part of the company to a company in, say,
Bangladesh, which could then outsource staffing to another Bangladesh company. So if the
workers at a plant in Bangladesh work in unhealthy conditions, is it the responsibility of the
staffing firm, the production company in Bangladesh, the textile company in the United States,
or all three? Outsourcing makes it difficult to track capital and labor in order to obtain insight
into the supply chain of a business.
When engaged in global outsourcing Standards of labor and the environment could
also slip. Some outsourcing critics say that it is leading to a general slippage in the labor and
environmental standards that apply to citizens consuming goods and services. This is a critique
often cited by NAFTA opponents. The resulting good or service may not be up to the standards if
a business outsources to a country with lower wages, more lax labor laws or lower environmental
standards, in our country, what the government has decided must apply. For consumers who
want to feel good about where their products come from, that's not just an issue. It's still a
problem for workers in other nations who are struggling to get the salaries they need to survive
and people who experience the effects of overseas emissions. Plus, as more goods are
manufactured in countries with poorer environmental standards, this raises the net exposure to
climate change. In developed nations, outsourcing can even crowd out small local enterprises
and small farms. And as the final con, it can backfire for the outsourcing company.
Outsourcing is not necessarily a money-saving home run for the businesses that do so. They may
be able to find that the company they outsourced to misses agreed deadlines, does not perform
well, or otherwise has a negative impact on the business. Communication issues may occur, or
costs may surpass estimates. For smaller businesses in particular, outsourcing may be a threat.
Outsourcing is a complex problem that continues to cause intense reactions. Our views
about the topic which vary on the basis of where we live, where we work and what viewpoints
we read or listen to, so it is useful to have the fundamental reasons for and against outsourcing in
the back of our mind when we hear about it in any kind of discussions or debates.
BIBLIOGRAPHY
Josephson, A. (2018, May) “The Pros and Cons of Outsourcing” retrieved from
https://smartasset.com/career/the-pros-and-cons-of-outsourcing
Gaille, B. (2015, July) “8 Global Outsourcing Pros and Cons” retrieved from
https://brandongaille.com/8-global-outsourcing-pros-and-cons/
Riggins, N. (2017, February) “20 Advantages and Disadvantages of Outsourcing from

Your Small Business” retrieved from https://smallbiztrends.com/2017/02/advantages-and-
disadvantages-of-outsourcing.html
Digneo, G. (2018, April) “The Pros and Cons of Outsourcing” retrieved from
https://biz30.timedoctor.com/pros-and-cons-of-outsourcing/
Augusta Free Press (2017, June) “The Pros and Cons of Global Outsourcing” retrieved
from https://augustafreepress.com/pros-cons-global-outsourcing/

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Colegio de San Juan de Letran

Name : LAZO, MYLES N. Course : ENT112 Date :

Instruction: Explain the Pros and Cons of Global Outsourcing

Riggins, N. (2017, February) “20 Advantages and Disadvantages of Outsourcing from

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