Pros and Cons of Globalization – Up until relatively recently large Multinational business has been practically the sole user of Global Outsourcing. That’s all changed with recent trends now showing small to medium business has been dipping it’s tow into the Outsourcing pool of resources.
For the single entrepreneur the vast pool of human resource that was once beyond reach is now available through the medium of the Internet. However and this is a big one, just like large business’s have had their problems and triumphs so does the smaller business. The opportunities found from Outsourcing your current business tasks are best taken from the perspective of ‘experience’, were angels fear to tread is an apt saying here.
To the uninitiated who jump right in without knowing the water, there are plenty of sharp rocks to bring an end what could have been a massive success – At the end of this article I make reference to a resource for those looking to get started with outsourcing today.
The relocation in managing the day-to-day carrying out of business activities has added another dimension to the Pros and Cons of Globalization. The client organization and the supplier of services drafts and executes a contractual agreement that stipulates the rules and describes the terms of provision and procurement. Nowadays, outsourcing trends have become more expansive encompassing more and more industries. Offshore outsourcing is the transfer of the enterprise’s service module to a secondary management that is located elsewhere other than the country where the goods and services are actually availed or consumed. The principle behind the practice is for minimization of production cost with the global electronic Internet network as its enabling medium.
Primarily, the reason for engaging this method is due to a significant difference in salary allocation. It is expected that the cost of service in the host country is much lesser in comparison to that of the origin. General criteria for the job that may be sent overseas are jobs accomplished through teleworking, jobs with high information content, jobs that can be repeated and easy to set-up, and work that could be transmitted through the Internet.
However, this trend has been a source of controversy and perhaps underlines the pros and cons of globalization from a Political standpoint, were the issue of job protection can become a major issue for governments (especially approaching an Election). Opposing factions have raised the threat it poses to the domestic job market of the developed country since fewer opportunities will be offered. Contrary to that, job opportunities in the host country will dramatically increase. For many growing firms the question about ‘how to outsource’ gets overshadowed by what should be outsourced.
Cannibalization is yet another trend in outsourcing. It is characterized by the reclamation of the serviceable parts of the projects by which open production and failure-related requirements are executed with the use the existing components of the project. This practice ensures the efficacy and proficiency of the supportive facility.
In this case, the work done earlier which was proven to be unsuccessful is outsourced to someone who is basically home bound. The service provider may actually be situated in the same country as the organization in need of the output.
Growth in captives and organizations that are owned and operated by a parent firm but in a different country is also a way of outsourcing. Nationals of the parent firm who have transferred due to work or those who have been living in the place as expatriates compose workforce. A big part of the wage revenue basically goes to the country of origin since foreign citizens do not supply it.
The Pros and Cons of Globalization debate has also in more recent years focused on outsourced electronic commerce. This has to be one of the more common trends wherein transactions for selling or buying a good or commodity is done over electronic systems. This has also gained popularity over the recent years. Since the development of the Internet a significant increase in this area has been reported. The variety of business conducted through this process includes fund transfer, Internet marketing, supply chain management, electronic data interchange, online transaction exchange, and several others.
The above-mentioned outsourcing trends have given the business sector a boost. Companies making use of these systems are generally more financially stable than those who do not. The face of business has been altered through globalization and de-regulation.
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