Outsourcing
Labour is one of the factors of production. Labour is a mental or physical effort of a human being in the process of creation. Outsourcing refers to the process of recruiting individuals outside an organization, company or country to create goods and provide services which are often undertaken as a cost-cutting measure. Other companies align with outsourcing partners who help them outsource single service resources and assets that are outside the company’s core. In the US, outsourcing is inevitable since it is viewed as a means of cutting down the cost and scaling up of organization operating within a country (Akinyemi 4). Therefore, there is motivation which helps the US companies to stay competitive in the global market and provides a bigger market that translates to higher profits.
In the past outsourcing was not just considered as a business strategy. Many companies were not self-sufficient that is they lacked internal competency hence outsourcing such functions. Therefore, outsourcing was mainly done for essential but ancillary services which would not be provided internally (Zamfir 13). Currently, outsourcing is regarded as a bad idea due to the rise of the unemployment rate since companies are outsourcing non-core activities and services at a lower price (Hoag 5). It would be difficult for US companies to compete in the world market without outsourcing. Outsourcing allows companies to sell to foreign markets using overseas branches. The companies maintain low labour costs by hiring from emerging markets that have lower standards of living. As a result, the prices of goods are lowered, which are then shipped back to the US and the global market. The foreign market economies are boosted by demand of the products as well as the US economy (Zamfir 11).
References.
Akinyemi, Abidemi. “Outsourcing to the Developing Economy: It’s Impacts on GDP and Unemployment. A Case Study of India and the United States of America.” (2016).
Hoag, Anne, and Jenna Grzeslo. “Awareness of and experience with online outsourcing journalism labour markets: A benchmark study of freelance journalists.” First Monday 24.1 (2019).
Zamfir, Alexandra, Sorin Ionescu, and Andrei Niculescu. “Outsourcing in the Business Processes.” FAIMA Business & Management Journal 5.2 (2017): 73.