The World Is Flat is a metaphor used by Thomas L Friedman to demonstrate the great changes taking place in our time as advances in technology and communications put people all over the world in touch with each other as never before. In his book, he describes the consequences of globalization and its impact in today’s business world and mentions ten factors that he believes are the main cause of this flattening of the world. One of these factors is the phenomenon of outsourcing. Although outsourcing is not new, it has become very popular. The practice of outsourcing illustrates how the access to resources and labor are not as limited as they once were, since today’s businesses can sustain or improve their competitiveness simply by implementing cost-effective measures such as purchasing cheaper goods or hiring a cheaper labor force in foreign markets such as India and China. One of the most important statements in Friedman’s book is that any work that can be digitized will flow to those who are best able to do it. This is a practice that we’ve seen especially during the recession in the past few years. As the economic crisis continued, the profitability of many businesses decreased; therefore managers and decision makers had to find cost-reducing measures that would allow them to survive. Many companies with components that are intangible in nature, such as customer service, downsized their existing labor force and outsourced operations to foreign markets in order to obtain the same service for a lower cost. Managers need to take into consideration pros and cons of outsourcing, so far it’s been a proven method to reduce cost, but it also has a flip side, mainly because it reduces the employment opportunities in the nation where the job is outsourced.
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