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In: Economics

Many companies around the world, including those in the US, have outsourced goods and services to...

Many companies around the world, including those in the US, have outsourced goods and services to India and China. However, some of these businesses have reversed course and are now insourcing these goods and services. Do you agree that this course reversal may be justified?

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Expert Solution

In sourcing is transforming into a more noteworthy example in various associations and organizations today than in the earlier years. There are points of interest and inconveniences to both in sourcing and outsourcing however. Companies want high quality product and competitive prices (Gaspar et al., 2014). If outsourcing is the best way to achieve those things, then that is perfectly fine. Each company is looking for that competitive advantage over another company. That is why I believe outsourcing may be the best route to take.

I agree that the course reversal can be justified. This would mean a company bringing their outsourced work back in house. However, with that said, I also do not oppose outsourcing either. Companies that have tried to bring manufacturing or production back into the United States after outsourcing the work before can often face labor challenges (Conerly, 2014). Those companies have reported having a difficult time finding workers who can pass drug tests, do basic math needed for the job, and come to work regularly (Conerly, 2014). Additionally, some companies are finding that the foreign markets are growing faster than those in America (Conerly, 2014). If a company decides on a course reversal, they are choosing to do so because of the best interest of the company. Not all companies will benefit from outsourcing and they may see that a course reversal is in their best interest.

An example of a company who decided against outsourcing in favor of in sourcing for one aspect of their company is Disney. After coming under much scrutiny over rumors of misusing the H-1B visa for cheaper labor, Disney decided to keep the over 30 technology positions in house instead of outsourcing the jobs (Hsu, 2015). There are numerous organizations all through America who were making their merchandise in house then later chose to outsource the creation. For this situation, Disney done the inverse and chose to keep work and creation in house.

Rahul Sunny answered 2 years ago
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