Outsourcing

Friedman (2007) listed outsourcing as one of the ten forces that flattened the world. In order to understand the topic of this week’s discussion, one needs to understand the definition of the following terms: Outsourcing, and home sourcing. According to Miriam Webster Dictionary, outsourcing is to procure (as some goods or services needed by a business or organization) under contract with outside supplier. Outsourcing can be – internal (within the U.S. borders); offshoring/external (outside the U.S. borders), However, in general discussions, outsource refers to transfer of labor to a company not based in the U.S. Friedman talks about three classes of workers in the U.S (Friedman, 2007). The untouchable class includes celebrities, authors, and highly specialized professions such as top cancer researchers, those who cannot be replaced. The second group includes localized professions such as waiter, hairdressers, and attorneys. These jobs can't really be outsourced. The last group is the middle class can be outsourced easily (Friedman, 2007). The idea of outsourcing can be viewed in 2 different ways – “reducing cost at the expense of quality or reducing quality at the expense of cost.” Each industry will have to analyze what best suits them. Wal-Mart is known to have chosen to reduce cost at the expense of quality e.g. outsourcing the mass production of sweatshirts to China due to cheaper labor and less quality control has been beneficial to Wal-Mart. Drug manufacturers have compromised quality at the expense of cost. Drug testing in India for example takes less time as noted Hallinan (2006) A German drug firm, Mucos Pharma GmPH contracts out the testing of a new treatment for neck and head cancer to Siro Clinpham in India. Siro finds volunteers to test the drug in half the time and expense the German company would encounter in Europe – and without having to test for safety. Biggest concern with outsourcing is privacy. I had a question for the IRS some years back and was surprised that a person with Indian accent was answering my questions. It bothered me because this agent had access to my social security number and that of my children as well. I cannot help but shudder about the possible abuse of this information. References Friedman, T. L. (2007). The world is flat. A brief history of the twenty-first century. New York, New York: Picador. Hallinan, C. (2006). Out of our hands: U.S. healthcare industry turns to outsourcing medical services. California Nurse, 102(1), 14-18 Outsource - Definition and More from the Free Merriam-Webster Dictionary. (n.d.). In Dictionary and Thesaurus - Merriam-Webster Online. Retrieved from http://www.merriam-webster.com/dictionary/outsource