Provide an overview of outsourcing. What does it entail? Many U.S. firms have ou

Question

Provide an overview of outsourcing. What does it entail?

Many U.S. firms have outsourced jobs to China (primarily for manufacturing) and India (primarily for back office duties). Pinpoint a firm or firms that have undertaken such outsourcing. What types of jobs were outsourced?

What did the workers and or manufacturers offer that drew these firms away from the U.S. labor market? Describe the benefits firms found in outsourcing.

Explain the implications of outsourcing for employment and wages in the domestic and foreign labor markets. What are the implications on product prices in the home country when outsourcing is used?

Explanation / Answer

Outsourcing is a method of getting a non-core activity done through an agency at a lower price and convinience.The traditional name of outsourcing is sub-contracting. India has the largest number of software professionals and they can also speak good english. Since the labor cost is low in India , IT works are being outsourced from US to India. Similarly China has been able to achieve very low cost of production through economies of scale and therefore many manufacturing work of different countries are being outsourced to china.

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