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Thread: Offshore outsourcing: why companies do it?

  1. #11
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    Default Re: Offshore outsourcing: why companies do it?

    It may seem to be a blessing in the beginning, but outsourcing is a curse for the third world countries. The brain drain has been apparent now and it is now that we realize that we have sold our souls to some money mongers who call themselves the future of IT. They want to cut on their cost of inventory and that is why they outsource. Its a imperialistic business approach. If they want to really be friend to the third world, why do they not pay all their employees at the same scale all over the world!!!!!

  2. #12
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    Default Re: Offshore outsourcing: why companies do it?

    Some companies actually do save a lot of money by outsourcing to third world countries. Wages there are lower and people work longer hours than they do elsewhere in the developed world. Some call it some form of slavery.

    The companies still sell the finished products as the same prices they would if they [the products] were locally produced. It's what they are after ó huge profits. And that's why outsourcing will be around for a really long time.

  3. #13
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    Default Re: Offshore outsourcing: why companies do it?

    Quote Originally Posted by CarlosTL View Post
    Well we may ask for George Soros' insight on Forex, he also happened to have made a fortune out of manipulating South East Asia currencies and ultimately (as some claim) causing the 1997 Asian financial crash. But I can cite some outsourcing examples I am familiar with: GE were dumping all of their dirty steel casting in China not for the love of the latter or to make any kind of profit (it's a pretty cheap & dumb process) but just because it was dirty. You could pretty much walk with a foundry factory in any OECD country and you'd basically get a "no thank you take your money we don't want that dirty stuff here". China was the only place that had the size to do it and the only one country that invested and heavily subsidized in getting a giant steel industry that no other small country could compete with its prices (not =/= wages). Another example I know is the aeronautics industry, I know of a manual polishing process for a new composite material that is being delegated to "crap country" because this process has many health hazard that we have yet to fully grasp; very small particles that infiltrate any protection and no single operator is permitted (or even able) to work on this for more than 2 years before serious health issues kick in.
    That's not outsourcing, by the way. Outsourcing is basically taking advantage of cheap labor in another country. The GE issue you were talking about had nothing to do with outsourcing whatsoever. That was simply the case of an industrialized country letting a developing country take care of its trash. Dumping trash in another country is not the same as outsourcing, regardless of how China transformed trash into a profitable venture.

  4. #14
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    Default Re: Offshore outsourcing: why companies do it?

    Quote Originally Posted by xTinx View Post
    That's not outsourcing, by the way. Outsourcing is basically taking advantage of cheap labor in another country. The GE issue you were talking about had nothing to do with outsourcing whatsoever. That was simply the case of an industrialized country letting a developing country take care of its trash. Dumping trash in another country is not the same as outsourcing, regardless of how China transformed trash into a profitable venture.
    It is outsourcing 100%. No, the point of outsourcing is not only cheap wages in a another company, that is not to mention that wages are not that important in many sectors, I started this topic to point this out.

    You can read a bit about the history of outsourcing and its relation to supply chain management, it all started in the 1980s when companies started specializing, focusing on their core skill and abandoning the vertical pyramidal way of doing things. This type of stuff used to be done not only in the country of origin but by the brand itself, which by today's standards seems totally crazy but was back then totally normal. It is no wonder that almost all steel-related factories have closed in the advanced world over the last two decades or so. Work moved abroad for various reasons, wages being really an anecdotal part of the story in this particular trade.

  5. #15
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    Default Re: Offshore outsourcing: why companies do it?

    Many companies are involved in offshore outsourcing because of the numerous benefits that may be derived from this arrangement. Some countries whose economies may probably be in a bad state will literally bend over backwards to have these investors in their countries, hence they offer these investors huge tax breaks and incentives to establish businesses there. In addition, the businesses are able to enjoy the opportunity of paying lower wages than they would in their country, thus enhancing profitability. In most instances all that is mostly gained by the country that is offering the incentives is the increased low wage employment.

  6. #16
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    Default Re: Offshore outsourcing: why companies do it?


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    Default Re: Offshore outsourcing: why companies do it?

    Why do IT offshore outsourcing firms dominate the H-1B program?

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    Default Re: Offshore outsourcing: why companies do it?

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