Student ID: 14041834, 14057483
Course Code: ENG 1014
Course Name: English for Business
Assignment: Argumentative Essay
Weightage: 15%
Title of Essay: In your opinion, is offshore outsourcing a viable business strategy for companies? Justify your stand and support your arguments with reasons and examples. Your essay should be between 600 and 650 words
Instructor: Ms. Joanne
Lee Kuan Yew once said, “If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business”. In this modern century, offshore outsourcing is developing the business patterns of organizations. According to Global Insights, instead of lowering the amount of jobs in the U.S., offshore outsourcing is lowering …show more content…
In today’s world, it is almost impossible for anyone to survive without having a proper job. With the presence of offshore outsourcing, jobs availability is declining which results in high unemployment. This is because offshore outsourcing attracts companies as their costs is lower. The Forrester Research estimated that there will be a loss of 800,000 jobs in the service line and 3.3 million jobs will be offshored by 2015. As there are lesser job opportunities, many employees will lose their source of income which will lead them to have a lower income status and standard of living. These will cause the employees to spend lesser causing the economy of country and the businesses for companies to be negatively affected Therefore, offshore outsourcing will cause a huge loss of job opportunities in a …show more content…
For example, in the United States, the labor cost is $100 an hour while in Beijing, it is only $20. This saves the companies 80% of cost. This is true to a certain extent, however, the truth is that no one saves 80% of cost. United Technologies, a leader in developing best offshore practices, is just saving over 20% by outsourcing to India. This is because of the hidden cost that is associated with offshore outsourcing. The cost of selecting a vendor is high as the employees need to travel overseas to search for the most suitable vendor. The cost of transition is incurred because the company needs to bring the offshore workers to the headquarters to analyze the work before they begin the actual work. The other costs are cost of managing an offshore contract, cost of laying off employees and overpriced cost of raw materials. Therefore, there are underlying costs that companies fail to realize which will increase the company’s total costs.
In conclusion, many companies are implementing offshore outsourcing as it reduces their costs. However, the drawbacks of offshore outsourcing outweigh the benefits. This is because offshore outsourcing has replaced the citizen’s job opportunities and put company in risk of losing confidential data. Besides, the hidden cost is much higher compared to the cost that the company saves. This shows that the company as a whole will be negatively influenced and therefore,