Question

In any situation where jobs are outsourced to places where labor costs less, what stakeholder group(s) would be identified as primary stakeholders and which as secondary stakeholders and what would their consequent pros and cons be?

Answer 1

In any situation where jobs are outsourced

Primary Stakeholders

1. Employees

2. Customers

3. Owners, Stockholders

Pros

> for employees whose jobs not directly impacted by the outsourcing may have a more stable and healthier employment outlook because the company may become financially strong.

> customers may get the benefit of lower prices through low labor costs

> the company will have reduced its manufacturing costs. this Savings can be used grow market share through price discounts to customers or increase in Net profit. Good for share holders/ oweners

Cons

> When company outsources, jobs in home company is lost.

> customers such as government customer would be bias for made in country products

Secondary Stakeholders

1. Employee unions

2. Governement

3. Media

4. Competition

Pros

> Government of outsources country may support as the new jobs are created

> due to increase competiton, the benefit will pass on to customers and employees

Cons

> The first con in dealing secondary share holder is identifying everyone who will fall in this category.

> secondary stakeholders may sometimes be the most vocal, even when have no direct stake in the company. e.g. worker union that is opposing the co. that is outsourcing production and laying off labours may cause bad goodwill among the community