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alex penny

on 20 May 2014

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Transcript of Outsourcing

Global Issue
Outsourcing In China
Obtain (goods or a service) from an outside or foreign supplier, especially in place of an internal source.
Global Issue:
Large population- perfect candidate for outsourcing.

workers are more reliable and labor costs have gone up.

outsource passed America's in 2010.
Monday, May 19, 2014
Vol XCIII, No. 311
Outsourcing in India
Global issue:
The US had 400,000-700,000 jobs that were in India in 2004,
They estimated that there would be 3.3 million US jobs in India by 2015
India is taking on more foreign jobs than it should.
What is outsourcing?
A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally.
When did outsourcing begin?
Outsourcing was not formally identified as a business strategy until 1989.
Why is outsourcing important?
It provides cost savings for the particular company and improves third world countries develop by providing employment opportunities to it's citizens.
Why do companies outsource?
Reduce and control operating costs
Gain access to world-class capabilities
Free internal resources for other purposes
Insufficient resources are available internally
Share risks with a partner company
A function is time-consuming to manage or is out of control
What is Outsourcing?
Outsourcing in USA
American labor was more expensive than in foreign countries and was more organized.

Global trade increased competition due to foreign firms having cheaper labor which allowed the U.S. to save more money.

90,000 engineers graduated engineering school in the U.S. in 2004.
Global Implications:

Case Against Outsourcing:

• Outsourcing services will be able to see your company’s confidential information which is a threat to security and confidentiality.

• When you begin to outsource your business processes, you might find it difficult to manage the offshore provider when compared to managing processes from within your organization.

• Off-shoring can create potential redundancies for your organization and your employees might express lack of interest or lack of quality at work.

• Your outsourcing provider might not be providing services only for your organization.

• Outsourcing, though cost-effective, might have hidden costs, such as the legal costs incurred while signing a contract between companies.

• With outsourcing, your organization might suffer from a lack of customer focus.

Reasons for being against Outsourcing:
local workers lose jobs
improves 3rd world countries
many competitions
americans have reduced costs
we conserve our resources
Global Issue:
Outsource example...
The Walt Disney Company occupies today the tenth position in the rank of the Best Global Brands.
The company today has their worldwide known amusement parks in three different continents, stores in United States, United Kingdom, France, Italy, Spain and Portugal; and licensed shops in nearly every country in the world.
The main factories are located in Asian countries, especially in China, and then have their products distributed to all the stores.
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