Effects of Outsourcing on Companies Employees and the Economy

Topics: Outsourcing, Economics, Types of business entity Pages: 4 (1621 words) Published: October 17, 2010
Effects of Outsourcing
Timothy Nicotera
University of New Hampshire


This paper will look through the effects that outsourcing has on American business, the economy, and social issues now as well as into the future. Outsourcing is a growing trend among companies large and small as an attempt to gain a competitive advantage in both local and global markets. There are both positive and negative impacts of this way of doing business that need to be realized and accounted for in order for the economy and American business to remain strong. There are future implications that have not been thoroughly analyzed and will be discovered further down the road. By using several research tools it is possible to piece together what we do know in an attempt to understand what is happening now. There is currently ongoing debate as to whether or not this trend of outsourcing is good or bad for America as a whole.

The trend of outsourcing is becoming increasingly popular as more companies face tighter budget constraints. The decline of the economy has made much company’s look for a competitive edge by for off shoring workers to cut costs. When examining outsourcing there are several key aspects to look at. There are both internal and external pressures that encourage companies to look to outsourcing some of their resources. The outsourcing these company’s use has both positive and negative effects on the organization, stockholders, and employees that are a part of it. When a company chooses to outsource there are long term effects that fall on the areas outside of the company such as the economy, society, and political issues.

There are several internal pressures that lead a company into outsourcing some of their employees and technologies. Depending on the type of business a company is running it can be very expensive to manage data. For a company to design its own in house software it can be very time consuming and difficult if even...
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