The economic effects of outsourcing are wide and varied and outsourcing in the global competition has brought major changes in the business processes of many organizations and even countries are experiencing massive changes. Politicians raised their voice against the concerns of outsourcing and they believed that outsourcing have adverse affects of the economy of United States and other major countries.
According to a research done by Alsbridge, approximately 80 percent call centers and business process outsourcing takes place in India all these cal centers are owned by American companies. This phenomenon poses several economic threats to America and one of the most obvious threats is people in America losses their jobs and unemployment increases in the country (Manghirmalani, 2009). However, these organizations attain economies of scale and their operational costs reduce due to outsourcing. By outsourcing in a third world or an underdeveloped country multinationals can save their cost and many companies can even cut their cost to half of their total costs. Similarly, by concentrating on their core competencies organizations can attain larger returns and they can easily enlarge their vision. Therefore if we look at the bigger picture outsourcing have both short term and long term economic benefits.
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