You own a company that employs about two hundred people in Maine to produce hockey sticks. Why might you decide to outsource your production to Indonesia? Would closing your plant and moving your operations overseas help or hurt the U. S. economy? Who would be hurt? Who would be helped? Now, armed with answers to these questions, ask yourself whether you would indeed move your facilities or continue making hockey sticks in Maine. Explain your decision. Support your claims with a scholarly source.
Why might you decide to outsource your production to Indonesia? There are fewer regulations to adhere to (health care laws, company security policies etc).
In addition the minimum wage within Indonesia will be less than that of the U. S. These drawbacks usually result in lower production cost and therefore greater profits. Would closing your plant and moving your operations overseas help or hurt the U. S. economy? For U. S workers and consumers, outsourcing would create a multitude of problems.
According to James Moreland (2013) Americans should realize that outsourcing has little or nothing to do with patriotism. It’s simply a matter of market competition. Who would be hurt? Two groups would indeed be affected. Employees will lose their job security and the consumers will be forced to pay higher prices for goods and service. As stated by Yunchuan Frank Liu (2011) if a firm outsources to a third world country, there will be a cost saving effect but, on the other hand there will also be a weakening among the competition.
The Essay on Outsource Production or Remain Producing at Home?
Based on and inspired by the widespread outsourcing moves of many companies from their home countries to other more “production friendly, non-very costly” countries all over the world, this paper evaluates the logistics factors and trade regulations affecting decision makers such as the management and/or the organization’s board whether to outsource its manufacturing plant or to retain production ...
Who would be helped? Outsourcing would provide benefits to the foreign economy and the company. Foreign economies would be boosted by the jobs created, and the company will be saving production cost. Today economies rely heavily on global marketing. According to George B. Grey (2002) the U. S economy and world economy are linked in many ways. In the end we must realize that the intent of outsourcing is not to purposely take jobs away but, it’s a mechanism to sustain companies that create jobs while providing consumers resources and products.
