Outsourcing has already become the distinguishing feature of modern business. Businesses strive to reduce their costs and to improve their profitability; and in this context outsourcing provides unlimited improvement opportunities. In his article, Pritchard (2009) writes about large outsourcing deals and the impact they produce on the quality of present day business. On the one hand, “the logic has been that businesses will be more efficient, more effective and more profitable by concentrating on core activities, and by letting specialist service providers run the rest” (Pritchard, 2009).
On the other hand, the cost-saving which firms seek in their outsourcing initiatives is likely to come over medium and long-term periods, and cannot be fast. Nevertheless, companies more and more actively engage in outsourcing strategies. Low-cost labor markets are becoming the primary outsourcing targets. Large IT service providers like Amazon and Google offer easy-to-buy services on a monthly basis.
Conventional outsourcing contracts are gradually improving and are made for longer terms (Pritchard, 2009). The more competitive the market becomes, the more probable it is that companies will use outsourcing as the instrument of improving customer relationship management and security of business operations. With the expansion of outsourcing strategies, companies choose to work with small businesses, which appear more flexible and adjustable in the changing environmental conditions.
Certainly, the growing outsourcing trends suggest that trade barriers between countries are gradually vanishing. It would be fair to say that globalization and outsourcing go hand in hand. Simultaneously, not all trade barriers easily disappear, and where the U. S actively works to promote outsourcing as the critical business decision and American businesses hire workers from all over the world to reduce their costs, the U. S. makes everything possible to prevent foreign companies from entering its markets.
The financial crisis has substantially increased unemployment risks, and many countries use their economic preferences to outsource, but they also build additional obstacles against international expansion of foreign businesses. While the current crisis bubble constantly grows, it is very probable that outsourcing will become a kind of a business savior for those, who were not able to withstand the growing financial and economic pressures.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 24 September 2016
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