Globalization and Outsourcing

Outsourcing is a primary and important factor to consider when thinking of globalization. Thus, understanding the economic implications of globalization is very much critical if policymakers aim to produce effective responses with regards to these policies. Outsourcing should be viewed as a new kind or type of competition and new policies should be developed that would enhance and maintain the national competitiveness as well as establish rules concerning global competition.

However, it is not about the benefits of technology that is at the heart of the matter here but rather it is an argument regarding the nature of competition and the appropriate rules that are essential for governing the competition both within and the country and outside.

Globalization has greatly influenced several factors and setting in both the developed and developing nations and economies around the world. Nowadays, it has been understood to mean the assimilation of various economies in an efficient manner which can be attained through a more lenient flow in assets and investments, services, and most importantly merchandise.

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It is in this process that several jobs have become unpredictable and has lost their stability. The basis and the foundation of tradition trade unionism is the mass production system, which has been destroyed and taken apart in other developing countries and is replaced with global networking and outsourcing. Japan, for example, have been known to have regionalized and globalized its pyramidal national subcontracting system and as such, the actual process of manufacturing is done at a slower pace. Examples of corporations who are doing this are Mitsubishi and Toyota.

These companies have actually relocated their parts manufacturing to other places in Asia and the world, for that matter where labor is cheaper. This process is also relocated in whatever place that is nearer in location to their industry. As a result, the Japanese labor market is also changing rapidly and unfortunately, lifetime employment is the one factor that is seriously affected. Among the industrialized countries, the United States is considered the most advanced in terms of flexibility of its work force.

The industry which is known as ‘temping industry’ provides ‘temporary workers’ and is the biggest and largest in terms of employment. According to Ofreneo (2006), “globalization has created new actors in the world of work who are not captured in the traditional IR paradigm” Nowadays, more and more businesses and global industries are continuously trying to look for profits that would yield higher returns and production site that would cost them the least. This reenacts a sort of race between these businesses and industries towards the pit for both national and global labor markets.

Thus, globalization has been responsible for making jobs unstable and unpredictable. It is during the late 1980s and early 1990s that Offshoring emerged as work and tasks that are related to customer service are contracted out. Nowadays, offshoring now occupies a broader perspective and outlook. As a result, the subject has become increasingly politically charged. Firms now do not surrender control of their organization, which is known as “turnkey contract manufacturing.

” Firms still retain control over the brand name and marketing of the product. Many airlines, have initially began outsourcing functions in the form of handling the customers’ baggage and when re-fuelling their machines and planes. Outsourcing of customer service, for instance, has also become increasingly popular (eg. Call centres). In a study conducted by the Australian Call Centre Association, it was found out that 7% of organizations only were prepared to outsource their call centre business (Harkins et al 1995).