Outsourcing Is The True Intent Of Corporate Outsourcing Essay

1604 Words null Page
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 change, increased risk and the search for flexibility, greater emphasis on core corporate competencies, and globalization are the driving forces behind the “need” for outsourcing. These fundamental changes have changed the market so that outsourcing jobs is the only avenue for a large firm to stay competitive in today’s market. Furthermore, Deavers states that the outsourcing of jobs to other countries may not result in a reduction of the wages paid at all.
Ron Hira, an associate professor of public policy at Howard University, on the other hand, argues that the primary reason why most American corporations choose to outsource essential tasks to companies in foreign countries is due to the cost and salary differences between the…

Related Documents