What is the defination of outsourcing?
Outsourcing is the delegation of tasks or jobs from internal production to an external entity (such as a subcontractor). Most recently, it has come to mean the elimination of in house staff to staff overseas, where salaries are markedly lower. It became a popular buzzword in business and management in the 1990's.
Outsourcing is a legal business activity affecting America, and it is an inevitable response to globalization--international trade. Outsourcing occurs when a business purchases services or products from a foreign supplier or manufacturer, or when a business pays another company to provide services that a business might otherwise have employed its own staff to perform. Businesses outsource for the purpose of cutting costs and raising profits. The origin of outsourcing in America dates back to the 1970's, when IBM developed the IT industry in India. Later, the Internet and telecommunications boom encouraged outsourcing as a means of promoting capitalism.
United States
Outsourcing to India
OutsourcingThis practice became even more popular after the dot.com crash of 2000. As many businesses struggled with cash-flow problems, many investors were leery in
investing money in high-tech companies, which many felt were still vulnerable to the dot.com effect. Struggling to do more with less, companies looked for less expensive avenues of development and support. For the United States, India seemed like a perfect resource for these needs since most nationals spoke English. A company can hire an engineer in India, for example, for $10,000 a year where an equally qualified engineer in the U.S. could cost $60,000-$90,000 a year.
In practice, this trend has experienced mixed results. Some companies, which were required to hire offshore talent by investors, reported many communication barriers and high foreign personnel turnover rates. They would often ask for one thing, but be delivered a different item. A domestic...