Outsourcing may be defined as the process which involves the contracting of the business to another country or another party. It may involve outsourcing of the employees and the assets from one firm to another, one place to another or one country to another. US has been continuing to do the outsourcing for a number of years (Gilley et al, 2003). Job outsourcing in US is defined as how the different companies in USA hire low paid workers from other countries where the markets are emerging other than the people from their own nation. However, there are a number of negative effects of outsourcing. This discussion in this essay will be focused upon the process of outsourcing, the causes of outsourcing and the negative effects of outsourcing in US. A large number of organizations are outsourcing the works and labors.
Causes of Outsourcing in USA
1) US is a country where the labor is costlier in comparison to a large number of fellow nations. In the other countries such as India, labor is available at a cheaper cost. Thus, the companies in USA outsource in order to maximize their profits.
2) A large number of times companies in USA outsource the products and jobs in order to do the offshore jobs so that they can have a better focus on the core business processes.
3) Outsourcing of jobs enables the companies of USA, to build a better relationship with the fellow countries where they are outsourcing the work or the jobs.
4) For most of the company, sales of the products and services are a primary requirement. By outsourcing, the US companies can build a major market for themselves. This will not only lead to the creation of a new market but make them globally popular.
5) The companies outsource because they believe that by doing the same, they can build a better capital.
6) As a result of outsourcing the companies tend to earn the benefits related to leverage of taxes as they may have to pay higher taxes in USA, in comparison to other nations.