The Importance Of Corporate Outsourcing

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One of the most popular subjects of debate within the literature focused on corporate outsourcing is the true intent of corporate outsourcing. Some scholars, such as Kenneth L. Deavers, believe that outsourcing is a corporate competitiveness strategy, not a corporation’s search for low wages and poor working conditions. Deavers’ primary thesis is that “outsourcing is the result of a complex change in the cost boundaries facing firms as they choose between inside and outside production. The question of what happens to wages is one to which there is not a simple a priori answer.” Instead, Deavers introduces four fundamental changes that have recently occurred in the labor market that drive companies to outsource. He suggests that rapid technological …show more content…
corporations should still be liable for the low wages and abuses that occur abroad, whether or not they are intentional. Deavers is an example of an individual who is one of the reasons why some companies, like Walmart, fail to assume corporate responsibility for the injustices and human rights violations that their employee (the independent contractor) imposes upon its workers. I would question why bright intellectuals like Deavers fail to admit the flaws in the corporate system in order to move forward and create strategies that will either sentence U.S. corporations to some form of remedial punishment, or compel the corporations to take a stand and provide the individuals within their supply change with residual income on which they could support a family. Viewing corporate outsourcing as a purposeful and self-serving action taken by corporations, as Hira does, allows an individual to coordinate a comprehensive plan in order to eliminate these injustices and take action to create remedies, such as adopting a minimum wage or a uniform code of conduct that the independent contractor must accept and the corporation as a whole vows to abide …show more content…
An article written by Boniface and Rashmi Michael illustrates how outsourcing “lowers innovation costs and risks, improves financial performance, and increases productivity,” but also how outsourcing can “have adverse effects on workplace health and safety and product and/or service quality”. The data collected from the Extended Mass Layoff Survey (1999-2010) that was included within the Michaels’ article indicated that those who were reemployed after being displaced by an outsourced job within the last eight years earn on average 17.5% less in their new jobs than in their lost jobs. Additionally, the number and percentage of workers within each sector (garments, IT, etc.) who have been displaced due to outsourcing have been steadily increasing within the last twenty years. The percentage of workers in the finance sector that have been displaced has increased from 4.54% of the population in 1996 to 5.79% of the population in

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