Outsourcing and its negative effect on U.S. economy
Kamila Burak
March 10, 2017
Harper College: ENG 101 – Spring 2017
Prof. Karen Witt
In today’s business environment, many companies are involved in what is known as outsourcing. American business organizations have implemented this corporate strategy as a cost saving measure. In order to gain more competitive advantage and higher profits major corporations started to outsource their functions, tasks, and production processes to third world countries, such as China or India. This movement towards outsourcing is relatively new; it was not officially recognized as the business strategy until 1989, although almost all electronics were being made in Taiwan way back in the seventies. However, once domestic companies began contracting with offshore
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Employees may be let go entirely, resulting in a loss of employment for U.S. workers in an economy with an already high unemployment rate. Furthermore, employees that remain may be less productive and efficient, mainly because their morale and dedication to the company are low. They may fear for their positions not knowing if the department they are a part of will be outsourced next. Control over employees and how the company is run becomes an issue as well. A parent corporation that has an outsourcing division offshore cannot continuously monitor what that division is doing. Even if the outsourcing sector does its best to follow the company’s plans, economic factors can affect performance. Employers in the U.S. understand the U.S. employees’ current economic and social conditions; however, it will be difficult for these employers to understand the situation of foreign workers. For example, a civil movement in the offshore country can instantly prevent employees in that country from