A new threat to the global market: OUTSOURCING

• What is outsourcing?

Outsourcing involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider. The client organization and the supplier enter into a contractual agreement that defines the transferred services. Under the agreement the supplier acquires the means of production in the form of a transfer of people, assets and other resources from the client. The client agrees to procure the services from the supplier for the term of the contract. Business segments typically outsourced include information technology, human resources, facilities and real estate management, and accounting. Many companies also outsource customer support and call center functions, manufacturing and engineering.

• My personal opinion

I think that enterprises should not outsource because it damages the local labour market. Outsourcing is the transfer of a function and that affects jobs and individuals.

• U.S. citizens opinion

A Zogby International poll conducted in August 2004 found that 71% of American voters believed that “outsourcing jobs overseas” hurt the economy while another 62% believed that the U.S. government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource.

• Measures

There are legal protections such as the European Union regulations called the Transfer of Undertakings (Protection of Employment) (TUPE) that protect individual rights. The labour laws in the United States are not as protective as those in the European Union and form my point of view they should be harder in order to protect individuals.

• Workers behaviour

Outsourcing may represent a new threat, contributing to rampant worker insecurity, and reflective of the general process of globalization. While the "outsourcing" process may provide benefits to less developed countries or global society as a whole, in some form and to some degree - include rising wages or increasing standards of living - these benefits are not secure. Further, the term outsourcing is also used to describe a process by which an internal department, equipment as well as personnel, is sold to a service provider, who may retain the workforce on worse conditions or discharge them in the short term. The affected workers thus often feel they are being "sold down the river", though workers in developing countries who have a job, one they would not have otherwise, are much happier.