Term Paper: Labor Economics Is the Study

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[. . .] The process is today being directed to meet a varied set of goals ranging from tactical to strategic and its global operations enable consistent management practices providing access to further new sources of revenue and also effecting the organizational changes. However, the efficacy of the process depends on, to start with, deciding what functions are to be outsourced. It is seen that outsourcing of Human resources administration, finance and accounting and payment services provide strategic advantages simultaneously considering the core functions like decision making is not appropriate to be outsourced. Thus the outsourcing involves identification of activities those can truly have core importance to the business and be regarded as the core activities and therefore, deserves investment and worth keeping them in house. [Services: Business Process out Sourcing]

Then the company is required to analyze the non-core process subject to mismanagement, wastage of energy, which if outsourced otherwise could have gained from the expertise and leverage of the service provider. Sometimes it is open to see that further leverage of the benefits of outsourcing is possible with the positive impact of the outsourcing of certain activities on the remaining activities. Considerable advantage is gained by the U.S. based companies similar to their peers in Europe out of the offshore outsourcing. The U.S. is benefited by the powerful labor arbitrage by offshore outsourcing. Amongst cut throat competition, the U.S. companies find it worthwhile to succeed by leveraging these advantages of offshore outsourcing that includes drastic reduction in labor costs. The expansion of BPO activities are presently further enhanced by cropping out of the service providers offering offshore BPO services to their clients by setting up of the delivery centers in the selected countries having adequate infrastructure such as strong pool of skilled labor, comparative advantage in labor cost, and also equipped by sophisticated network and telecommunication technology. [Services: Business Process out Sourcing]

Empirical evidences have shown that the outsourcing is good for the U.S. economy. A recent report released by Global Insight on March 30, 2004, after a thorough research sponsored by Information Technology Association of America (ITAA) concluded that outsourcing by U.S. based companies induced to create new jobs for Americans. The report infused consolation amidst widespread unemployment of United States of which the Information Technology sector is said to be hardest hit. According to the report, the offshore outsourcing in the field of computer software is growing at a compound rate of 26% which is expected to increase the volume from 10 billion dollars in 2003 to 31 billion dollars in 2008. Simultaneously, it is estimated to increase the savings from 6.7 billion dollars to 20.9 billion dollars thereby supporting the conclusion that the offshore resources lowering costs and boosts productivity. According to Nariman Behravesh, the head of the report strongly argues in favor of the outsourcing observing that the offshore resources reduces costs, dampens inflation, lowers interest rates, increases spending and induce creation of new jobs. [Offshore outsourcing helps U.S. economy, says report]

Amidst the gloomy atmosphere against outsourcing of jobs in U.S. And intensified campaigns against it, the outsourcing is reported to benefit the U.S. economy. A Virginia-based organization pointed out the U.S. economy has enormous gains in terms of job creation, higher wages, higher GDP growth, controlled inflation, expansion of exports, etc. from global outsourcing amidst an environment of free trade, open markets and fierce competition. Even though it is presumed to displace workers but predicted to increase economic activity and create wide range of jobs in both IT sector and non-IT sectors. [Outsourcing has 'great benefits' for U.S.: ITAA] The Times of India reports quoting the ITAA report that the job loss in United States out of outsourcing during the last year is estimated to be 104,000 which constitute only 2.8% of total IT jobs. This is outweighed by the growth of Gross Domestic Product by 34 billion U.S. dollar and created 90,000 net new jobs in new avenues.

It has also predicted that by 2008 the growth of GDP will be USD 124 billion thereby creating 317,000 more new jobs. The India Express taking excerpts from the report predicted more efficient operation of U.S. economy with the present trend of outsourcing and will create more than twice the number of jobs presently considered to be displaced. Amidst fierce protests against outsourcing in U.S. such positive trend led the ITAA to remark, "Given the benefits that accompany offshore spending by U.S. firms, it would be unwise to enact protectionist legislation or regulations as a result of political pressures being created by this economic transition." [U.S. Economy Benefits from Outsourcing]


Gaining Competitive Advantage" Online BPO Retrieved at http://www.onlinebpo.com/. Accessed on 15 May, 2004

Ask Ella: Is Outsourcing Good? What Jobs Will Remain In U.S. " May 3, 2004 Retrieved at http://www.thewbalchannel.com/employmentadvice/3262588/detail.html. Accessed on 15 May, 2004

Business Process Outsourcing: Facts and Fictions" Information Technology Update, December 2002 Retrieved at http://www.mallesons.com/publications/information_technology/6204415w.htm. Accessed on 15 May, 2004

Business Process Outsourcing" Retrieved from www.directories today.com/i_business.htm http://www.directoriestoday.com/i_business.htm. Accessed on 15 May, 2004

Services: Business Process out Sourcing" Retrieved at http://www.shridharmainfo.com/srBPO.htm. Accessed on 15 May, 2004

Business Process Outsourcing: Human Resources Solutions" April, 1999

http://www.outsourcingjournal.com/apr1999-bpo.html. Accessed on 15 May, 2004

Villafania, Alexander. "Offshore outsourcing helps U.S. economy: says report" Apr. 02, 2004

Retrieved at http://www.inq7.net/inf/2004/apr/03/inf_2-1.htm. Accessed on 15 May, 2004

Outsourcing has 'great benefits' for U.S.: ITAA" Indian Express Bureau. 22nd Apr 2004

Retrieved at http://www.indiaexpress.com/news/business/20040422-0.html. Accessed on 15

US Economy Benefits from Outsourcing" Times of India. April 06, 2004 Retrieved at http://www.blogsource.org/blog/unemployment/index.html. Accessed on 15 May, 2004 [END OF PREVIEW]

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