Category: Outsourcing

Offshore outsourcing can be a great opportunity for a company to hire additional staff while saving money and distributing the workload among more professionals. However, this practice also has many drawbacks, and it can pose potential risks to the projects success and safety. When deciding whether to employ offshore outsourcing, the company should consider the tasks characteristics as well as its current resources and staff availability.

First of all, some projects deal with highly sensitive data, and its improper or unsafe distribution can lead to major ethical problems for the business. As Reynolds (2018) notes, the company should analyze the political repercussions of such incidents when deciding who gets access to information. Moreover, small projects or those that do not require many programmers can be done by local employees. Second, one must take into account that outsourcing internationally has additional costs for finding and hiring workers. Hiring international workers may lead to unnecessary spending if the business deals with small assignments and does not have a large budget.

In contrast, large complex projects may benefit from offshore outsourcing. For example, the company wants to develop a product that requires constant programmer support or goes through many iterations. International employees can work at any time, creating an unending stream of new information. Moreover, large projects with short deadlines can also be supported by a bigger number of outsourced specialists. Here, the issues to consider are time, budget, the need for more workers, and support requirements.

Overall, companies need to consider many factors when offshore outsourcing for their programming needs. The projects size and budget are top concerns as they can help determine whether hiring outside of the country is worth it. The firms management should also look at its outsourcing ability when dealing with customer or product information. For example, large projects often require more employees, while smaller products and simple services do not need to be outsourced.

Reference

Reynolds G. W. (2018). Ethics in information technology (6^th ed.). Cengage Learning.

Introduction

Companies are always looking for new tactics to help increase their efficiency and decrease production costs. Such strategies result in increased productivity, thereby promoting organizational growth. One strategy that has become popular among American firms over the past decades is outsourcing. Outsourcing is the results-oriented relationship of a company with foreign-based external providers of activities that would otherwise have been performed in-house by US employees.

Technological advances experienced over the last three decades have contributed to the increase in outsourcing incidents. This practice has significant positive and negative impacts on the US economy. This paper argues that outsourcing of US jobs to foreigners is detrimental to the well being of US employees and the US economy. The practice should, therefore, be curtailed in order to ensure the future prosperity of the US.

Why Outsourcing US Jobs is Harmful

The most significant argument made against outsourcing is that it leads to high unemployment in the US. Currently, the US is facing high unemployment rates with the Bureau of Labor Statistics reports that the national unemployment rate is at 6.3% (par.2). While this is the lowest unemployment rate enjoyed by the US in 6 years, it represents 10.3 million Americans without a job.

For many Americans, international outsourcing is the main cause of job loss, and there is growing pressure on the government to do something about this. Pearlstein asserts that while outsourcing cannot be blamed for all the unemployment problems in the US, it is responsible for the longer-term structural unemployment in the United States today (par. 22).

The US Commerce Department notes that while some US-based multinational companies have managed to increase their labor force in the US, this increase is negligible compared to the increase they have made in their offshore employment.

Phillips reveals that while US-based multinationals have achieved a 0.1 percent increase in their US labor force over the last decade, they have expanded their offshore employment by 1.5 percent (28). If the US-based companies did not outsource, the employment growth would have been enjoyed by the US, therefore, reducing the unemployment rates.

Offshoring increases the length of the spell of joblessness experienced by many Americans who lose their jobs due to company layoffs. When a firm outsources some of its activities, the workers who were carrying out those tasks in the US are left without a job (Crino 1860). These workers often seek alternative employment immediately after being laid off. However, research indicates that offshoring makes it hard for them to obtain new employment.

Crino explains that the outsourcing trend leads to a decline in the number of employment opportunities while at the same time, increasing the number of people experiencing non-employment (1859). This temporary unemployment has an overall negative effect on the future employment of the worker.

In addition to causing joblessness, outsourcing has contributed to the wage decline experienced by displaced workers. In many cases, workers are forced to find work in new industries after displacement due to outsourcing by their original industry. Research by Crino indicates that the industrial reallocation after displacement is quantitatively large with up to 53% of workers being re-employed outside the manufacturing sector (1859).

Industry switching is becoming more prevalent as outsourcing becomes more prevalent, and more individuals are unable to find work in their core industries. This industry switching leads to a large drop in wages by the individual due to a loss in industry-specific human capital.

Outsourcing also contributes to the decline in full-time employment opportunities available to employees. Many Americans are forced to engage in part-time jobs to make a living. The wages obtained from part-time employment are significantly lower, and the worker does not enjoy the benefits that employers offer in full-time jobs. Lower wages translate to lower standards of living by the individual.

Outsourcing is likely to lead to the future stagnation of the US manufacturing industry. Currently, almost all major US companies that have an international presence outsource some aspects of their production. This practice is encouraged by the increased productivity exhibited by US companies that take advantage of the lower production costs enjoyed in foreign countries (Amiti and Wei 10).

As a result, companies have increased their capital spending offshore. Phillips warns that as US companies dedicate more resources overseas and neglect the home industries, the US manufacturing industry will stagnate (28).

The government suffers from reduced tax revenue due to outsourcing. Outsourcing leads to the loss of jobs or employment opportunities for potential taxpayers. While outsourcing was traditionally restricted to blue-collar jobs, it is increasingly affecting the white-collar job category. High-value knowledge-based services are being outsourced to developing countries (Horgos 5).

This has the effect of denying government taxes from high-paying jobs. Reduced tax revenue has a negative effect on society as a whole. It causes the government to invest less money in important areas such as education, health, infrastructure, and social security. The entire community, therefore, suffers from these negative impacts that can be traced to outsourcing.

Outsourcing has a devastating effect on the communities that were supported by the firms that later decide to outsource. Companies contribute to the economy in more ways than just creating direct employment (Agrawal 38).

Many towns benefit from the additional business created by the presence of a company. Businesses provide auxiliary services to the firms and their suppliers benefit. Outsourcing sometimes leads to the closure of entire branches of a business. This often has a catastrophic effect on the community that was being supported by the presence of the company.

A case for outsourcing

Proponents of offshore outsourcing argue that it will have a positive effect on the economy in the long run since it will lead to greater economic efficiency by US companies. Outsourcing enables a company to allocate its resources (Horgos 4) efficiently. This results in more goods or services being produced using the same set of scarce resources. As some services and production processes are outsourced, US firms will be able to deliver services more cheaply, and consumers will benefit from lower prices.

While it is true that the outsourcing benefit of efficient allocation of resources leads to lower prices for consumers in the US, this view discounts the fact that the consumers might not afford the products or services. The consumers need to have a steady income to afford the products obtained through outsourcing. However, outsourcing leads to the displacement of many US workers rendering them without an income. The low pricing of goods because of outsourcing is, therefore, not a benefit to most US citizens.

Supporters of outsourcing claim that it leads to the protection of US businesses that would otherwise be forced to shut down due to losses. Many businesses in the US face high production costs making it hard for them to compete favorably on the global market. Outsourcing makes it possible for the business to reduce their production costs and hence remain in business. Agrawal reveals that more companies are being motivated to move their labor-intensive service jobs to countries with low labor costs (36).

For many small and medium-sized companies in the US, outsourcing entails substituting expensive US labor with cheap foreign labor (Horgos 1). The businesses are, therefore, able to continue functioning and offering employment in the US. While it is true that outsourcing saves some business from being shut down, this does not necessarily benefit US citizens. Pearlstein documents that for every 2.4 million jobs that US-based multinationals move to foreign countries, 2.9 million jobs are lost in the United States (par. 31).

The Bureau of Labor Statistics reports that the frequency of mass layoff incidents is increasing with about 154,000 workers experiencing separations from their work in the first quarter of 2013 (par. 4). As such, while large companies can exploit the outsourcing strategy to foster growth, there are fewer jobs left in the country.

Outsourcing leads to increased productivity for US businesses, and this benefits the overall economy. Amiti and Wei note that a firm can relocate its relatively inefficient parts of the production process to a country where they can be produced more cheaply (204). This will enable the firm to expand its output in the production stages leading to comparative advantage. Pearlstein notes that the growth in profits translates to company expansion leading to an increase in the number of American jobs (par. 25).

There is no doubt that companies can enjoy increased profits due to outsourcing. This makes it possible for the company to reinvest and experience growth. However, most of the reinvestment is not undertaken in the US. Research indicates that the level of investment made by companies in the US is on a decline as focus turns to their offshore affiliates. Phillips documents that in 2009, the capital spending by US-based multinationals to their offshore branches rose by 8.6% while the capital spending in the US only rose by a modest 3.3% (28).

Conclusion

This paper set out to underscore the negative impacts that outsourcing is having on the US economy. It began by noting that outsourcing is becoming a prevalent trend in the US as more companies seek to exploit the benefits of this strategy. Outsourcing leads to unemployment problems as many US employees are laid off or miss out on employment opportunities as more jobs are moved to foreign locations. The community suffers from a decline in government services due to lower tax revenues.

The paper has taken care to highlight the positive impacts of outsourcing on the US economy. It has indicated that this practice has led to improved efficiency and productivity by US companies leading to higher profits. However, many firms do not weigh the benefits and costs of outsourcing before engaging in this activity.

Instead, they only consider the probability of maximizing their profits through outsourcing. Americans are already experiencing significant suffering because of rampant outsourcing. Action should be taken by the government and the business community to ensure that more jobs are retained in the US.

Works Cited

Agrawal, Vivek. Who wins in offshoring. McKinsey Quarterly 16.4 (2003): 36-41. Print.

Amiti, Mary and Shang-Jin Wei. Service Offshoring and Productivity: Evidence from the US. World Economy 32.2(2009): 203-220. Web.

Bureau of Labor Statistics. Employment Situation Summary. 2014. Web.

Crino, Rosario. The Effects of Offshoring on Post-displacement Wages: Evidence from the United States. World Economy 33.12 (2010): 1836-1869. Web.

Horgos, Daniel. International Outsourcing and Wage Rigidity. Global Economy Journal 12.2(2012): 1-26. Web. 7 May 2014.

Pearlstein, Steven. Outsourcing: Whats the true impact? Counting jobs is only part of the answer. The Washington Post 2012. Web.

Phillips, Phil. US-based Multinationals Continue to Hire Offshore. Coatings World 17.5 (2012): 28-28. Web.

Outsourcing can be regarded as one of the byproducts of globalization. Many early movers benefited from this strategy especially when it comes to the production of the products (Carbaugh, 2015). Outsourcing has been associated with a competitive advantage, but it led to significant losses for some firms (Mourdoukoutas, 2013). HP is one of the leaders in the area of computer manufacturing, and it is valued for the quality of products and services provided. The company has also employed the strategy of outsourcing, which is associated with some advantages and disadvantages.

One of the major advantages of the outsourcing is the reduction of costs. For instance, HP moves its production facilities to Asian countries including but not confined to China (Buckman, 2004). The labor costs in such countries as China, India, Taiwan and so on are very low compared to one in the USA. Moreover, governments of these countries are willing to attract more investors and provide the favorable environment for foreign companies. This was especially true in the 2000s when Asian countries introduced various policies that made the production costs very low (Buckman, 2004). Another advantage of outsourcing is the focus on the core activity. Such companies as Google benefit from outsourcing as they focused on their core activities including product development, marketing, and after-sale services in the USA (Mourdoukoutas, 2013). The R&D operations can also be outsourced, but in the initial stages (when the competition is not intense).

However, outsourcing is likely to be harmful as well. For example, if the R&D process is outsourced, the supply chain can transform into a disintegrated process (Mourdoukoutas, 2013). This is associated with various risks. The subcontractors may fail to provide the necessary materials and details or distribute products properly, which may disrupt the entire supply chain. Subcontractors often sign contracts with many companies, which is associated with additional risks as the subcontractors are not focused on particular projects and may prioritize their tasks at the expense of some companies. Furthermore, the quality of products can be affected, which is the most serious risk as high quality is one of HPs competitive advantages. The loss of important and confidential data can pose significant threats to the companys performance.

Outsourcing also has adverse effects on employees morale, as American employees often feel they may lose their jobs due to the availability of low labor force (Carbaugh, 2015). The environment in the working place worsens, and loyalty of employees reduces. Clearly, turnover and the loss of high-profile employees may negatively affect any company. It is noteworthy that the business environment in Asian countries (which are traditional destinations) is worsening as the governments are imposing more restrictions. Minimum wages have also increased, which leads to the increase of costs (Carbaugh, 2015). It is possible to note that the vast majority of manufacturing companies may face similar issues when outsourcing.

On balance, it is possible to note that outsourcing can be beneficial for early movers, but it can have detrimental effects for followers. The advantages of the outsourcing include reduction of costs and the focus on core activities. However, the disadvantages involve disruption of the supply chain, lower quality of products, low morale of employees and the risks to confidentiality. Therefore, it is possible to note that HP and other computer manufacturing companies may outsource production processes, but they should keep the rest of operations in the USA.

Reference List

Buckman, R. (2004). H-P outsourcing: Beyond China. The Wall Street Journal. Web.

Carbaugh, R. (2015). Contemporary economics: An applications approach. New York, NY: Routledge.

Mourdoukoutas, P. (2013). How Hewlett-Packard and Dell destroyed their PC advantages& Piece-by-piece. Forbes. Web.

Introduction

Every business from baking to banking depends, to some degree, on others for producing its products and services. The process of acquiring products and services for running ones business is called outsourcing in the business world. Though, outsourcing is not a new phenomenon for the companies, but in recent years it has gained much momentum (Slack et al, 2012).

Now it is not restricted to an approach for reducing costs but has developed into a strategic management device with specific significance for businesses. Outsourcing refers to the transfer of ownership of an organizations business activities (processes or functions)-or the responsibility for the business outcomes flowing from these activities- to service provider (Chamberland, 2003, Para 4).

Companies are now keen on outsourcing direct activities and indirect processes to service providers that is known as business process outsourcing (BPO). Whether it is the routine back-offices activities in the financial company or the payroll and the training and development activities in the Human Resource sector, outsourcing to expert companies is widespread in all areas (Slack et al, 2012).Until late 1990s information technology also used outsourcing to increase its operational productivities.

But the later years saw a prompt increase in business process outsourcing including fields such as manufacturing and designing etc. Now the focus is on the overall business benefits that aim at improving the companys position in the market and also at increasing shareholder profits. In a recent IDC Canada survey, 90% of the Canadian executives alleged that they outsource in order to attain some change in business processes (Chamberland, 2003).

Normally, the facilities, technology and people are also transferred to the service provider and the service provider gives his services to the organization in turn. Organizations may outsource activities for problem solving and for strategic purposes as well. For example, if a company outsources some business process or activity to reduce the burden of its staff or to get the routine work done on time, it is a tactical arrangement.

Tactical outsourcing arrangement can also be seen in a company that outsources its IT infrastructure in order to save operating costs (Chamberland, 2003, para 5). A company that focuses on strategic outsourcing has different goals such as gaining competitive advantage, focusing primarily on the core activities that bring success, enhancing companys market position and their share price escalation. Strategic outsourcing has to be flexible in its contractual form so that it is easier for the parties to realign their strategic intent for the benefit of the outsourcing organization (Chamberland, 2003).

Importance of Outsourcing to Organizations

The importance of outsourcing to organizations has been a subject of debate over the years. The emerging new phase has witnessed immense international technological competitiveness giving way to the equalization of expertise at global level. Outsourcing has become very convenient in the fields of information and networking technology and many other fields. It has opened new avenues for the growth of organizations around the world. Outsourcing benefits the companies by pulling down labour costs and extending reach to different ideas.

Modern telecommunication and Internet has also contributed to the huge recognition of outsourcing. New dimensions of collaborations and innovative ways of doing business are established through broadband communications (Wolff, 2007).

Companies believe that outsourcing non- core activities can enhance the performance of their core activities. It is noticeable that outsourcing affects the operations performance considerably; however, companies look into several aspects while deciding about outsourcing an activity. Organizations may not outsource activities with potential long term strategic importance for them.

It is also logical for the organizations not to outsource an activity if they have expertise in it. Outsourcing is also avoided by the companies to keep their designs and developments in house. Companies may also avoid outsourcing if their performance is superior to the potential supplier or if not it has the potential to significantly improve its performance in near future (Slack et al, 2012).

Examples of Outsourcing Companies

Coca-Cola presents an apt example of linking outsourcing to business strategy. It got itself established as a popular soft drink company in the 1890s. However, it decided to outsource bottling of their soft drink to independent bottlers, keeping in mind the limitations of capital, time and proficiency in bottling. In spite of the fact that bottling could bring competitive advantage to the company, it was outsourced because the company had other major concerns at that point of time.

Outsourcing the non-core business activity of bottling its soft drink helped in focusing on the core objective of maintaining quality control and keeping its brand with increased market share (Tahmincioglu, 2006, para 2). In the following years, the company attained its chief business objective of expanding its market far and wide with maintaining its brand. Later, in 1979 Coca-Cola bought many of its bottling partners because of their inefficiency in coping up with the increased competition in bottling sector. Now, companys main concern was to develop its potential in bottling its products so it could beat its competitors.

Organizations have different perspectives concerning the importance of outsourcing. Carol Frank, an entrepreneur feels that outsourcing brings down the cost of production and hence, is advantageous for her company. She needed some overseas manufacturer for her Dallas Companys birdcages. Her objective was to gain competitive advantage by outsourcing them at cheaper prices. She started with a Mexican manufacturer who turned out to be too slow. However, she ended up in finding a Malaysian company. Frank knows that it is difficult to make the manufacturer realize the significance of the birdcage as more than a mere piece of furniture, however, she can bear this as she is getting it 60% cheaper.

But Brenda Lynn (Fairfield, Conn.) does not get her knitwear manufactured outside the U.S. in order to maintain a competitive advantage attached with the quality and desirability of her designs. She feels that it is easier to beat the trends by turning new designs quickly and oversee production by staying stateside.

The case is different for Derek Lam, New-York based entrepreneur who gets 90% of his manufacturing done in Soncino, Italy. He does so not to save capital but to utilize the traditional craftsmanship of Italy along with high-tech methods to produce dresses beautifully and speedily (Tahmincioglu, 2006, para 3). However, he feels that complexities like currency fluctuations, regular travelling and linguistic challenges do occur in this process (Tahmincioglu, 2006).

Not only the entrepreneurs, but military is also outsourcing support from the private military companies. The U.S. military is outsourcing 20% to 30% of military support services in Iraq. Kellogg Brown & Root (KBR) has become a vital part of American military projecting its strength at global level (Bianco and Forest, 2003).

Pros and Cons of Outsourcing

Outsourcing has become very convenient with the use of modern telecommunications and Internet; however, firms face severe disapproval for outsourcing certain processes. Trade unions point out that outsourcing companies do the jobs at reduced salaries and reduced working conditions. They claim that flexibility is achieved at the cost of job security.

Outsourcing is considered to be cost effective and it does prove to be cost effective in long-term processes, however, in the initial phase when both the sides learn to get used to the new arrangement demands more investment.( Slack et al, 2012).Ron Hira of Rochester Institute of Technology considers it to be dangerous and disruptive. He believes the disruptions and the dangers are being underplayed by the promoters of outsourcing-from universities to swarms of companies that facilitate hook-ups between outsourcers and outsources (Wolff, 2007, p.3). The debate over the pros and cons of outsourcing is dominant in different areas of business.

Security

The promoters of outsourcing security claim that the IT staff can be utilised for more strategic matters if exempted from performing these security functions. Andre Gold, IT lead for risk management in ING, a Netherlands based global financial firm says, such tasks as patch and vulnerability management and antivirus support are consuming a lot of staff time that might better be used, for instance, in strategic management operations for online business goals with partners and customers(Messmer, 2008, p.28).

However, there persists a different point of view that presents the disadvantages of outsourcing security. Organizations are still hesitant in trusting an outsider company for performing their security functions such as updating security software or performing scans for them. The CISO at ICI (a global chemical manufacturer) accepts that outsourcing security services for vulnerability scanning and antimalware prevention has affected the performance of ICI definitely. However, he thinks that the outsourcer does not bear the responsibility for the failures and disappointments in business as he hardly realizes the impact of failures on the organizations. Similarly, Gossels, president of consultancy System Experts says,

Ive never seen large scale outsourcing work well. Security is a business enabler, and the decisions you make every day in your IT infrastructure impact the business. I dont see how you can do that in an outsourcing way (Messmer, 2008, p.28).

Similar views were revealed in a survey conducted on 479 security professional from different business sectors such as transportation, finance, telecom and government by Computer Security Institute (CSI). In the survey 61% of the respondents said that their organizations did not outsource any computer security activities. CSI found in its survey that the market for outsourcing security is limited to only a few functions that require specialized nature of work and the ability to segregate the task for access to key enterprise assets make outsourcing more appealing, it doesnt appear that appetite for such outsourcing is growing overall (Messmer, 2008, p.28).

Organizations like JP Morgan Chase are refraining from outsourcing security functions. According to the vice president IT risk management, Anish Bhimani, the organization is turning to less expensive ways of getting activities like firewall monitoring and vulnerability assessment in-house by means of procured tools. Mark Grimmelikhuijsen, who is serving as the senior security manager at Campbell Soup Company, believes that outsourcing security may result in further apprehensions regarding the liability of disputes and failures. There could be an intricacy of keeping a watch on the watcher.

Critics of outsourcing security worry that it could lead to a mechanized way of following the contract and ignoring implications. However, the advocates believe that the security experts can be engaged in more crucial matters while getting the regular tasks done (Messmer, 2008).

Tax Preparation

Outsourcing in the field of tax-preparation and financial services has become popular with the technological advancement of moving data conveniently.It is beneficial for the companies during busy season to handle the pressure efficiently with lesser staff. Fred Shapes, CPA, who is partner at Rosen, Seymour, Shapss, Martin (RSSM) &Co., New York finds tax offshoring helpful as it relieves the seasonal workload. The firm outsourced about150 individual returns to India for 2003 and increased it to about 600 returns for 2004 (Shamis et al, 2005, p.58).

There are no complexities in the functioning. He says, We get a 48-hour turnaround. But like anything else, you have to monitor and manage the process (Shamis et al, 2005, p.58). Besides this, it lowers the labour cost and allows the companies to handle more work. However, modifying business processes result in some unpremeditated results such as liability for the accuracy of work, security of clients information and impact of outsourcing on the companys professional image in the market (Shamis et al, 2005).

Retail Business

Outsourcing is a widespread phenomenon in retail business. It is used by many retailers as a tool that works as a supplement facilitating their internal resources. The experiences of the retailers at Chain Store Ages Managing the Store- Development Process discussion reveal the trend that generally the in-house staff and outsourced workers collaborate in the store development process. However, they feel that it is important to manage the outsourced section for the success of the project.

For example, Linens n Things, Zale Corp. and REI perform the significant activities like stores design and merchandising in- house and outsource the left over work.According to Jane Rappleyea, VP, at Linens n Things in store planning &construction the fixture drawings are done in-house and serve as a basis for the overall construction documents. The construction documents are outsourced to the architect and engineering firms based around the country gaining benefit of the local expertise. On the other hand firms like Tandy Corp., who operate Radio Shack believe that quick turnaround time is the basic requirement in the designing and production of drawings that can be achieved fast and if done in-house.

This is so because; in-house environment can regulate every feature of the process, from planning to excellence. However, sealing drawings in all the states is not possible to do in-house for every corporation. For example, CompUSA is capable of doing all its documents activities in-house but in California, it needs to outsource because they are not so knowledgeable of seismic procedures out there, according to the VP, store planning, Jim Paddock. Hence, it is not always possible to perform all documentation work in-house. Sometimes specialized requirement may occur that are beyond the capabilities of the organization and demand outsourcing.

It is commonly recognized that outsourcing is beneficial in retail business as it allows high level proficiency and new talent to reach everywhere. It also enables chains with inadequate resources to experience state- of- the-art technology (The pros and cons, 2002).

Mark Ambrose, director of store design& planning, Ross Stores, Newark Calif tells the advantages and disadvantages of outsourcing. The good thing is that outsourcing is not included in overhead costs and can be discontinued when the production reduces speed. However, getting them back when the production accelerates is difficult as they might be engaged with other firms by now. Hence, the retailer has to outsource newer faces and invest in their training again.

According to Ambrose, training is inevitable for every new worker, in-house or outsourced, who is involved in the production. It is commonly believed among retailers that in spite of being a cost effective tool for handling the ups and downs during the production process, outsourcing brings certain disadvantages too. These may include unavailability of the same outsource, repeated investment on their training,

vendor complacency: It is another disadvantage that retailers face while outsourcing. It is difficult to maintain the quality and services over a long period of time (The pros and cons, 2002, p.9B).

Research and Development

Outsourcing in the field of Research and Development in America is a cause of concern for many who believe that falling prospects of jobs may result in a drop in the quality and quantity of the labour pool in America and ultimately exhaust its innovation capacity. This could raise Americas competitive future at stake (Wolff, 2007). Hira (2005) senses the need for new policies that preserve and boost American competence in the field of science and technology. He worries that Americas innovativetalent may considerablybeaffected by outsourcing R&D with so many options available overseas like India and China grabbing high level R&D work for lower costs (cited in Wolff, 2007).

Gilmont from University of Pennsylvanias Wharton and Engineering Schools, supports the idea of outsourcing R&D as he believes that corporations need innovation and it cannot be attained from ones own laboratories. Innovation can come from anywhere. He asserts, Everyone I have spoken to knows that they need to add innovation to their total package tools and that its going to come from another source (Wolff, 2007, p.4).

Audit Functions

Audit activities, too, are outsourced to support the internal audit departments. Non-core IT audit activities can bring various benefits to the internal audit departments such as providing more time to systems development and crucial projects. Expert technicians can perform the audit functions in a specialized manner. Hence, outsourcing saves companys capital by saving its time and effort. With reduced operating cost and training cost, outsourcing proves to be advantageous for the audit department. Hence, getting certain functions done by an efficient external service provider on time contributes to the performance of the department or organization.

However, outsourcing IT auditors brings complexities too. There has to be an appropriate check and management of the outsourced projects to determine their relevance and cost effectiveness. Outsourcing IT related audit function sometimes threatens the internal IT staff about their job continuation. It is also observed that the service provider is unable to provide proper attention to internal audits needs if handling many clients at a time. Besides, there are various hidden costs such as travel expenses, capital required for legal activities and start-ups.Other possible disadvantages include inadequate understanding of the scope of the project, miscommunication, not maintaining the brand quality and slowed down services (Pyzik, 2012).

Outsourcing may worry companies with the disadvantages discussed above, but Bhagwati et al (2004) suggest that it is important to understand its usefulness as a trade phenomenon having almost same qualitative effects as that of the conventional trade in goods. According to them it is necessary to recognize raised complexity that results from induced weakening in trade and the displacement of workers from certain sectors, however, they believe that outsourcing is not going to affect employment in countries like the U.S. having potential of creating high value jobs over time (Bhagwati et al, 2004).

Recommendations

It is generally believed that companies should not outsource their core activities that are crucial for their success. However, it is important for the companies to clearly distinguish between their core activities and non-core activities in order to use outsourcing effectively for the benefit of the organization. Further, it is more important to distinguish activities as core or strategic activities (Chamberland, 2003).

Chamberland suggests that strategic outsourcing has to be more than a typical customer-supplier relationship. For obtaining maximum benefit from the strategic outsourcing, it is important to build a structure that approaches a partnership- like arrangement where the organization that is outsourcing and the service provider see each other as equals engaged in a common enterprise-tends to allow the service provider to deliver greater value during the course of arrangement (Chamberland, 2003).

Rappleyea, of Linens n Things, believes that it is important to manage outsourcing in the same manner as the internal resources are managed in order to control their services and quality. The outsourced relationship will produce good results if we put in good efforts in maintaining it. He says, You have to look at the company as an extension of your internal-resources construction. (The pros and cons 2002, p.9B).

President of Westwood Contractors, Fort Worth, Texas, Robert Benda, recommends that the client- retailer should provide leadership for the smooth continuing of the relationship and think about the mutual benefit. He reveals that the longest lasting relationships for them have been those where the client leader on the team has exhibited a balanced interest between their vendors well-being and success and the companys objectives (The pros and cons, 2002, p.10B).

In the realm of project management in retail business, it is wise to hire people with like mind. Rappleyea of Linens n Things suggests that there should be no discrepancy between the outsourced and the internal project managers. He says that, You should treat them as if they are part of your staff, sharing information and keeping them on top of whats happening. If you treat them as stepchild or as an afterthought, thats when you are going to have problems. They need to be in the loop on everything (The pros and cons, 2002, p.10B).

Audit executives need to practically and strategically decide while outsourcing IT activities for themselves for successfully meeting the audit plan. There has to be an appropriate check and management of the outsourced projects to determine their relevance and cost effectiveness. These measures can help in dealing with the complexities that come up with outsourcing IT audit functions (Pyzik, 2012).

Companies should keep in mind that outsourcing should not be taken as a substitute for the internal capabilities and should not hamper their internal strengths. It is important for the business people to keep their knowledge updated regarding the latest developments in their businesses and constantly changing market demands. Moreover, companies should review their in house business activities systematically for strategic decision making (Chamberland, 2003).

References

Bhagwati, J., Panangariya, A. & Srinivasan, T.N., 2004, The muddles over outsourcing, Journal of Economic Perspectives, vol. 18, no. 4, pp.93-114, Web.

Bianco, A. & Forest, S.A., 2003, Outsourcing, Business Week, Web.

Chamberland, D. Is it core or strategic? Outsourcing as a strategic management tool, 2003, Web.

Messmer, E. 2006, Outsourcing security presents pros and cons, Network World, vol. 25, no. 12, pp. 1-28, Web.

Pyzik, K. 2012, The pros and cons of outsourcing, IT Audit, Web.

Tahmincioglu, E. 2006, Here or there, Business Week, Web.

The pros and cons, 2002, Web.

Wolff, M.F. Engineers, Academics, 2007, Policymakers argue offshoring pros and cons, Research Technology Management, Web.

Shamis, G.S., Green, C. M., Sorensen, S.M. & Kyle, D.L., 2005, Outsourcing, offshoring, nearshoring: What to do? Journal of Accountancy, pp. 57-61, Web.

Slack, N., Brandon-Jones, A., Johnston, R., Betts, A. 2012, Operations and process management, Pearson, London, UK.

Outsourcing call or contact centers is a common process that has appealed to many business leaders. This strategy has made it easier for firms to trim business costs especially in the current global economic climate (Agarwal et al. 52). The practice has been characterized by extra benefits such as improving efficiency and reducing the risks associated with employment law. Many American multinational corporations have outsourced various customer services to India. Some of these firms include Ford Motors and American Express (Amex). These corporations have gained confidence with the leading service providers in the nation because of costs, exemplary talent, and speedy turnaround (Raja and Bhasin 176). Unfortunately, some skeptics still believe that the model has led to numerous quality concerns.

Quality Issues Arising from Call Center Outsourcing to India

The first challenge associated with the use of call centers in India arises from cultural differences. India is a country that embraces a unique culture and tradition. Guilbault and Omanwa argue that cultural difference has the potential to impact customer satisfaction (72). This is the case because most of the employees in such call centers have unique values, belief systems, and expectations (Agarwal et al. 55). On the other hand, the targeted customers in the United States and other parts of the world tend to have diverse expectations. This cultural difference explains why the needs of the customers are not fulfilled adequately.

The psychological health outcomes of many employees in different call centers in India continue to dictate the quality of services available to the targeted customers. A study conducted in 2013 in a company called Delhi-NCR indicated that over 90 percent of the workers were unhappy with the working conditions (Raja and Bhasin 176). The study revealed that work-life balance was not taken seriously. Many call center employees in the country are exposed to a wide range of challenges such as poor mental health and lack of support. The working environments are associated with poor conditions. Some workers have recorded psychological problems such as burnout and stress. These problems have been observed to affect the level of customer satisfaction.

A report published by the MIT Sloan Management Review in 2010 indicated that outsourcing was one of the models undermining the experiences of many customers especially in automobile industry (Agarwal et al. 53). Companies such as Ford Motors and General Motors were recording a decline in customer satisfaction scores (Agarwal et al. 57). The situation was even worse for companies that had outsourced such call center services from countries such as India and Indonesia. The report further indicated that organizational cultures, leadership models, and consumer perception differences contributed to such outcomes.

Aziz indicates that many firms within the business process outsourcing (BPO) sector have been associated with similar challenges (247). This is the case because the employees working in such call centers find it impossible to deal with workplace stress. Aziz goes further to indicate that majority of the studies conducted in the recent have showed conclusively that occupational stress is a major problem affecting many call center firms in India (249). Consequently, majority of the customers receiving call center services from such organizations have recorded increased levels of dissatisfaction. The customers tend to become angry and stop doing business with their respective companies. Experts have also indicated that longer working hours result in burnout. These issues have undermined the quality of support available to the targeted customers.

It is acknowledgeable that many companies and customers in Europe and the United States are no longer satisfied with the services provided by offshore call centers (Agarwal et al. 57). This is the leading reason why some companies have been pulling most of their call center roles from India. Dell is one of the companies that decided to pull their call center services back to the United States. This has been the same case for many firms in the computer technology industry. According to the firm, the quality of support was affected by the cultural attributes and language barriers arising from the BPO model. This was also the same case for firms in the aviation industry such as the United States Airways Group (USAG).

A study conducted by CFI Group in the year 2013 indicated that offshore centers in India recorded reduced levels of satisfaction. Customers were observed to terminate their business relationships with their companies due to poor call center services (Aziz 250). These quality concerns have led to reduced revenues for many companies in the United States.

Recommendations

Aziz encourages outsourcing companies in India to address the problem of culture (250). They can do so by attracting individuals from different cultural backgrounds in order to offer personalized services to the targeted customers. American companies can embrace the idea of nearshoring (Guilbault and Omanwa 68). This approach will ensure more companies identify call centers that appear to sync with the local culture. Call center providers should identify the best strategies to address the unique challenges experienced in their workplaces. Provision of gymnasium facilities and promotion of work-life balance will definitely empower the employees to deliver exemplary services to the customers. Companies can also liaise with call center agencies to equip workers with adequate skills that can meet the needs of the targeted customers.

Works Cited

Agarwal, Sumit, et al. Impact of Service Quality Dimensions towards Customer Satisfaction in Indian Call Centers. Pacific Business Review International, vol. 6, no. 1, 2013, pp. 51-64.

Aziz, Mohsin. Factors Causing: A Study of Indian Call Centres. Academic Journal of Interdisciplinary Studies, vol. 2, no. 8, 2013, pp. 247-252.

Guilbault, Melodi, and Verna Omanwa. Culture and the Impact on Customer Service: Considerations for Offshoring to India. Atlantic Marketing Journal, vol. 3, no. 1, 2014, pp. 63-73.

Raja, Jeyapal, and Sanjiv Bhasin. Health Issues Amongst Call Center Employees, An Emerging Occupational Group in India. Indian Journal of Community Medicine, vol. 39, no. 3, 2014, pp. 175-177.

Introduction

Strategic planning is very important in business management. Doing business entails managing scarce resources to ensure a good return on investment. While making decisions in business, there is the need for decision-makers to evaluate all factors involved in coming up with the best decision. Strategic planning defines a strategy or approach that would be used in a certain situation or while solving a certain problem. As the business environment change and new technology come into place, new approaches are being adopted in strategic planning. Outsourcing has become very important in todays business world, with many businesses choosing to outsource some of their activities.

Summary

Outsourcing has become an important strategic option in manufacturing. The aim of outsourcing in manufacturing is to concentrate energy on essential activities while outsourcing non-core activities to another company. Instead of trying to learn how to make every component needed for manufacturing, the focus is on avoiding manufacturing components that can be outsourced to another company.

As manufacturing companies decide to outsource some of their activities, there are various mistakes that can be done. The decision on whether to outsource some activities or not is challenging. In addition, deciding on the components that will be outsourced may have long-term effects on the business of a manufacturing company. Some companies continue to manufacture some components due to a sense of corporate responsibility, but such a decision may demean a companys profitability (Venkatesan, 1992, p.98). The decision to continue to manufacture some components with the aim of preserving jobs may not only add cost but also reduce efficiency in manufacturing. On the other hand, there could be mistakes while outsourcing the manufacturing of some parts. A company may decide to outsource manufacturing of parts that are hard to make while in-sourcing those that are easy to make. Such a decision can lead to complacency in workers that can result in to rise in fixed cost, a decline of product differentiation, and also stagnation of manufacturing performance (Venkatesan, 1992, p.99). The best decision for outsourcing in manufacturing companies should be to outsource manufacturing of parts that inhibit a company from making good use of its skills and resources.

Generic Business Level Strategies

With the increase in businesses, the competitive advantage of a company is very important. Generic business-level strategies aim at enhancing a companys competitive advantage as well as increase value to the customers.

Differentiation as a strategy for competitive advantage consists of the ability to create unique products that are appealing to customers. There are many products in the market from which consumers can choose. The uniqueness of a product to other products in the market is important to competitive advantage (Kozami, 2002, p. 87). The uniqueness can be achieved through innovation, creativity as well as specialization. Outsourcing can either promote or inhibit differentiation depending on how it is conducted in a manufacturing company.

Outsourcing in manufacturing entails transferring the responsibility for manufacturing some parts to external companies. From the article, various managers were concerned about losing the uniqueness of their companys products through outsourcing. The main challenge to managers was to identify the components that could be outsourced. Some companies choose to outsource the components that seemed to be hard to make. Such a decision may lead to a company outsourcing core components of their products or those components that make their products unique (Venkatesan, 1992, p.103). Since differentiation results from the uniqueness of products, outsourcing manufacturing of core parts may deny a company the competitive advantage that results from differentiation. Fear of loss uniqueness leads some manufacturing companies to opt not to outsource.

Differentiation is possible with outsourcing in manufacturing companies. The success of outsourcing lies in the ability to distinguish core parts from commodities. A manufacturing company should focus its energy on manufacturing components that are core and unique to their products while outsourcing those that can be done by another company.

Cost is a major factor in competitive advantage. Cost leadership constitutes the ability of a company to reduce production costs through efficiency in production (Harrison & John, 2009, p. 213). This generic business-level strategy aims at looking at all options that can be used to reduce costs in all areas of a business. Outsourcing in manufacturing is a good strategy for reducing costs. Outsourcing productions of some components to other companies allow for efficient use of resources. In addition, outsourcing allows a manufacturing company to focus its energy on areas where it is best skilled (Venkatesan, 1992, p.111). Outsourcing companies have the skills and capacity to manufacture some parts at a lower cost. For some parts, the cost of outsourcing is far lower than the cost of manufacturing the parts within a company.

The decision to outsource should be made with reference to competitive advantage. Outsourcing should not be an additional cost or an inhibition to business efficiency. The first step is to identify the business activities that can be outsourced. To do this, core and subsidiary activities should be differentiated (Harrison & John, 2009, p. 217). The activities that do not core to a company could be outsourced to another company. The capability of suppliers to handle outsourced activity is very important. The supplier should be able to perform the outsourced activities with efficiency and avail the supplies on time. Reaction from employees should not be ignored. Outsourcing should not be used to intimidate employees but management should take time to explain the need for outsourcing.

Outsourcing at Cummins Inc

A good example where outsourcing has been successful is at Cummins Inc. Cummins Inc deals in diesel and natural gas engines. In the 1980s, legislation requiring less emission in the air necessitated Cummins to come up with new pistons to meet the requirements laid down in the legislature. The company had two options; either rebuild their pistons or outsource the pistons to a supplier (Venkatesan, 1992, p. 104). Although there were various potential suppliers, the decision to outsource was not easy. Developing its own piston required a lot of investment while outsourcing manufacturing of the pistons seemed to be a dangerous decision since the piston is core to an engine.

The deadlock in making the decision was broken by a team set up to address the issue. The team is constituted of representatives from all major departments in the company. After investigations, the team discovered that Cumminss internal capacity to develop the pistons was low as compared to potential suppliers. The team also observed that Cummins could not be able to keep up with innovation in the suppliers nor invest enough resources as the suppliers did (Venkatesan, 1992, p. 105). The team concluded that the best approach was to outsource the pistons. This decision allowed Cummins to avoid heavy investment in pistons manufacturing while using the resources in their areas of strength.

Conclusion

Outsourcing is one option for implementing generic business-level strategies. Generic business-level strategies aim at increasing a companys competitive advantage through various approaches. Outsourcing some business activities to a supplier enables effective use of resources that can reduce cost and increases competitive advantage. Decision on the activities to be outsourced is very important. The fear of loss of differentiation can be overcome by outsourcing non-core activities while the core activities are performed in the company.

References

Harrison, J. & John, C. (2009). Foundation in Strategic Management. New York: Cengage Learning.

Kozami, A. (2002). Business policy and strategy management. New York: Tata McGraw-Hill.

Venkatesan, R. (1992). Strategic Sourcing: To make or not to make. Harvard Business Review.

The current trends, outsourcing and offshoring, affect the business activity of the present-day companies. The former means an organizations initiative to send the work to be done outside of firm. The latter is sending work overseas to other companies or their own branches in other countries (Collins, 2020). According to Tamzin Booth, the principal reason why businesses start rethinking their offshore strategies is the global labor arbitrage which is gradually disappearing. The second reason is that companies do not need as many workers as before. The third reason is that the practice of offshoring and outsourcing happened to be less profitable due to management specificities than it was expected.

The automotive company which adopted the practice of offshoring in the past is General Motors. However, it has also changed its policies due to the emergence of new needs. Thus, the use of overseas suppliers of IT systems was profitable but less innovative. Since GM needs new ideas to keep up with the worlds trends, they decided to create their own IT systems (Collins, 2020). This decision is also connected to their intention to be local for a bigger market.

At present, General Motors is still shipping jobs overseas, mostly to Mexico and China. Nevertheless, the difference between their previous policy and current initiatives is in the fact that the company is launching new models in these countries while developing them in the United States. In this way, they are more involved in the process and make it more innovative. Another company which has followed in the footsteps of GM is Ford, and it also sent the work to China. In the context of the COVID-19 crisis, I would not support these strategies since any change in their cooperation can lead to large-scale financial losses.

Reference

Collins, P. (Host). (2020). Special report: Outsourcing and offshoring. The Economist. Web.

Today, outsourcing, the process of transferring a part of production or business to another company that is an expert in this field, becomes a key practice among such large companies as Dell, eBay, and others. The evidence shows that there are both advantages and disadvantages of outsourcing and related issues. In order to understand eBays approach to the given business, this paper will answer a range of questions related to the given case scenario.

While other companies like Dell decreasing their outsourcing, eBay should not follow the same strategy since its focal outsourcing direction is personnel. If Dell outsources for storage, transportation, and equipment, the fact that eBay is not a physical merchant allows it increasing outsourcing issues (Barney & Hesterly, 2014). For example, it is possible to recommend considering email outsourcing that is likely to be cheaper than a traditional approach to answering customers inquiries. By providing proper training to personnel, eBay may achieve greater effectiveness in assisting its customers.

Outsourcing of Trust and Safety presents several limits such as customers confidential information, social security number, and other related data, the leakage of which will violate eBays operation terms. In particular, the safety of communication is questionable when it is outsourced to an external company, and the investment in this direction is rather costly. More to the point, employees hired by the outsourcing company cannot be checked, which may compromise eBays Trust and Safety. Therefore, operations including sensitive data should not be outsourced.

Among the advantages of Build, Operate, Transfer (BOT) strategy proposed by Dalton, one may enumerate low risks, integration of two other alternatives, and future transition of an operations center to eBay. At the same time, the disadvantages are no successful examples of the BOT approach implementation and potentially high management fees (Barney & Hesterly, 2014). The specified strategy is regarded as a hybrid of two other alternatives, which makes it more universal. However, the fact is that the first option implies little cost reduction yet more safety, and the second one, on the contrary, proposes higher risks with the opportunity to reduce costs.

The BOT strategys opportunism is associated with the third party vendors in other countries, which can be prevented by means of contract negotiations. Speaking of eBays capability, one may note its team that is dedicated to the companys goals and outsourcing, while being ready for unproven experiments. The flexibility in the given case refers to utilizing the third party vendors as well as possible re-consideration of the strategy after the start-up performance, when the expected outcomes will be more transparent.

It is possible to assume that eBays senior management will implement Daltons BOT strategy as it is cost-effective and control-related. By introducing this plan, the company will receive the opportunity to increase quality of its services through proper outsourcing. It is also significant to pinpoint that the research made by Dalton is convincing enough to accept her strategy, thus trying an integrated approach with regard to outsourcing.

To conclude, it should be emphasized that outsourcing plays a special role in eBays operations since it provides such an important aspect as personnel. Considering that the company strives to reduce costs and enhance quality of services, it is critical to discover new ways of accomplishing the mentioned goals. In this connection, the BOT strategy suggested by Dalton seems to be the most relevant option as it connects two other alternatives.

Reference

Barney, J. B. & Hesterly, W. (2014). Strategic management and competitive advantage: Concepts and cases (5th ed.). Upper Saddle River, NJ: Pearson.

Abstract

The United States has utilized mercenaries in the War on Terror to ensure the success of many missions. While the input of private contractors is immense, there are adverse views on private military forces stemming from scandals and questionable regulations of such companies (Lubin, 2021). Since the modern approach to warfare organizations has shifted towards the market-governed relationship, it is impossible to imagine the United States without private security and military companies (PSMCs). Their role as protectors, trainers, and scouts provides an immense boost to the countrys security. However, merely outsourcing all such activities is impossible without adjustments to the laws governing PSMCs actions. Accountability and responsibility must be held to the highest standard within this industry, as peoples lives directly depend on PSMCs competencies.

Introduction

Nowadays, the role of private security and military companies (PSMCs) is immense in modern warfare. The United States has employed these organizations numerous times during the War on Terror. However, the results show mixed outcomes, where successes may be overshadowed by major scandals. However, it is counterproductive to consider this approach to be a complete failure, and outsourcing military activities must remain a viable option. Many countries, including Russia, the members of NATO, and the United Arab Emirates, are utilizing private contractors (Cusumano & Kinsey, 2021). The growing need to provide a secure space for millions of people across the globe made the United States expand its reach and increased the pressure on the U.S. Army. Such a method of outsourcing warfare does come with issues linked to the activities of PSMCs and the regulations that govern their behavior and legitimacy of actions. It is essential to regulate said forces, yet it is also vital to keep them available for the country, as they provide a significant boost to the U.S. homeland security. This paper will discuss the benefits, disadvantages, and the necessity of the usage of PSMCs in the War on Terror.

Benefits of PSMCs

The vast majority of countries have a standing army, yet not every army has the size and strength necessary to deal with the conflicts of the globalized world. There was a significant downsizing of the U.S. Army after the Cold War had finished, although the new threat in the form of terrorist organizations had just begun to rise (Ranito, 2019). PSMCs gives an opportunity to cover armies weak spots. The role of such organizations is to assist governments in converting wealth into military power (Cusumano & Kinsey, 2021). It is paramount for the United States to be able to hire mercenaries due to the increased number of targets requiring military interventions, as the threat of global terrorism continues to exist. Moreover, PSMCs may serve as a proxy that may give a country an opportunity to participate in an armed conflict without directly involving its forces to keep certain liabilities outside of the picture (Cusumano & Kinsey, 2021). At this point, regulations must be made to outline a proper etiquette for such missions.

The contractor parties participated in the war in Afghanistan alongside the U.S. forces, and their contribution cannot be overestimated. The inability of the Taliban to gain more power over the past decade is greatly attributed to the involvement of the private sector (Cusumano & Kinsey, 2021). In fact, there is already a strong link between the current U.S. army forces and PSMCs. Many mercenaries are American veterans who did not find a place in society after coming back from war and decided to make a career as a part of a private force (McFate, 2019). Their expertise is what gives these companies a significant advantage over increased funding of the U.S. Army forces.

Another vital part of the PSMCs activities is less apparent. These organizations perform tasks for international companies in the field of counterterrorism, as regular armies are not suitable for that role (Hlouchova, 2020). PSMCs can perform security services outside of the traditional scope of standing army forces. Private contractors provide safety to their clients assets in both real-life and virtual environments (Hlouchova, 2020). Nowadays, private security firms are an inseparable part of many major corporations structures.

Disadvantages of PSMCs

Despite the immense help private military organizations provide, there are numerous counterarguments against using PSMCs in modern warfare, especially abroad. Mercenaries were absent on many battlefields in the past century, with the only encounter renowned for their participation being the Congo War, where they committed many atrocities (Ranito, 2019). This negative reputation has been further confirmed in the 2000s in the War on Terror. Lubin (2021) states that the actions of Blackwater  a private military organization infamous for killing Iraqi civilians  have uncensored the global shape of homeland security and revealed the critical flaws in PSMCs regulations (p. 65). Their crimes made it clear that there must be a clear line between protecting a home country and waging war, causing many hostilities between Arab countries and the United States.

The actions of PSMCs have been a target of criticism for decades, with many of their crimes occurring abroad. The borders between military actions against domestic threats have been blurred in recent years, turning homeland securitys attention to foreign battlefields (Lubin, 2021). This notion makes it challenging to address flaws in regulating PSMCs once they move abroad adequately. There are blind spots in the actions of PSMCs that lead to negative encounters where private contractors cannot be prosecuted for their crimes because of the lack of evidence (Cusumano & Kinsey, 2021). Moreover, eradicating said issues with transparency is challenging due to the nature of PSMCs. These outstanding issues impose a heavy penalty on any military or security operations where PSMCs are involved.

There is also a rejection of PSMCs in society stemming from the past flawed attempts to integrate these organizations into public affairs. As a result, the stigma on the term mercenary in the military context remains highly negative, as the private companies reputation took many hits due to the major scandals caused by a selected few individuals (McFate, 2019). It is essential to fix their reputation as upholders of peace and order rather than the groups of tolerated thugs. After the Bush administrations attempts to mitigate a significant hit to the U.S. international standing due to the allegations of torture, the views on PSMCs crimes only worsened (Abel, 2018). It must be clear to the general public that there is no free pass for violence given to private contractors.

The Role of PSMCs in Private Security

The usage of the same PSMCs that participate in the War on Terror in private security makes the topic even more complicated. The growing percentage of said organizations conducting other law enforcement activities puts them legally in the same position as governmental structures, yet these actors are not reflected in the law constructively (Hlouchova, 2020). The usage of private violence in armed conflicts is clear, yet the role of the same military organizations in civic engagement makes their reputation a critical point in disputes. Private contractors can do much more than assist armies since their restrictions on interventions are not governed by similar constraints. PSMCs members transfer their knowledge, protect individuals, locations, and objects, and perform reconnaissance tasks.

In truth, PSMCs protect firms interests in the same way they assist governmental organizations. Terrorist threats may be apolitical yet still cause a loss of life at the same scale, which makes military organizations a viable option for protecting both democratic principles and specific assets (Hlouchova, 2020). It might appear that such a view sets a dangerous precedent that can open the path to violent confrontations. Lubin (2021) argues that such an approach makes indistinguishable the counterinsurgency violence aimed at terrorists and the counterinsurgency policing of everyone (p. 67). PSMCs that are not governed by sufficiently adequate commanders may indeed pose a threat, yet it can be negated with proper policies set in place.

It is also vital to note that the increased investments into homeland security, including private contractors, have led to significant improvements in public safety. While there were major terrorist attacks after 9/11, the United States did not suffer a catastrophe of a similar scale due to its counterterrorism activities (Brands & OHanlon, 2021). The expertise of the well-trained private armies led to a newly emerged market, which efficiently counters violent extremists. The private-public relationship has a prominent role in counterterrorism activities, and the infrastructure that PSMCs protect can become a target of terrorist attacks just as likely as governmental buildings (Hlouchova, 2020). Due to such a wide array of applications, the scope of permissible activities and the requirements for memberships in PSMCs considers skill sets outside of traditional military operations.

Reasons for Changes in Regulations

As of now, mercenaries may be met with questionable reactions by the governments of countries where they operate, including on home and foreign grounds. The operations undertaken by mercenaries may also be covert, in which transparency is understandably suppressed (McFate, 2019). This factor causes the most conflicts, yet such activities are not entirely lawless. These missions do not imply a lack of accountability, as there are official business practices governing the actions of PSMCs, including the ISO 28007 and 18788 standards (McFate, 2019). As can be seen in the examples of military scandals involving mercenaries, these measures are not sufficient.

While there are benefits of utilizing private contractors, it is necessary for the United States to respond to the valid criticism related to PSMCs questionable position in the law. In order to become fully integrated into the homeland security sector, PSMCs role must become more focused on the tasks with clearly outlined borders. Hlouchova (2020) argues that these organizations must become an extended hand of the governmental structures they respond to and turn nearly indistinguishable in their responsibilities and accountabilities (p. 156). This change is drastic yet essential for PSMCs to operate within the borders of U.S. law.

Despite the fact that such a change may negate a portion of the benefits private contractors provide, their regulations are vital in creating a functioning addition to the U.S. Army. As of now, mercenaries are renowned for fighting via unconventional methods, sometimes even ignoring the rules of an armed conflict and making loud headlines for newspapers across the globe (McFate, 2019). Such an approach only adds hostility to armed conflicts, leading to escalations that may result in higher losses among United States soldiers.

As of now, there are numerous oversights in legislative practices related to managing PSMCs in the United States. The most critical one appears to be the fact that the new regulations come as a response to adverse incidents involving PSMCs (Ranito, 2019). This issue may be deemed as the primary reason behind the negative publicity drawn to private contractors during the War on Terror. Such a reactionary approach to policy making is detrimental to the United States.

Contractors must not possess the same level of authority in issuing critical decisions. The information available to private military companies should never exceed what is known to the CIA, despite the implications of the shared knowledge (Abel, 2018). This measure must be taken as soon as possible to prevent further incidents where the truth is difficult to uncover due to the lack of facts. Such situations must also be viewed in the light of the claims made by countries where PSMCs operate.

The recent changes to PSMCs regulations are also questionable in their intentions. The standards of overt operations are seen as promoting a marketing value of said companies rather than ensuring that ethical behavior is upheld at all times (McFate, 2019). It is essential to understand that PSMCs are not just businesses but also legally responsible entities with heightened accountability under the law. At the same time, many clients of PSMCs, even when utilizing their services for private security, are not interested in transparency (McFate, 2019). Such practices must be changed at their core, with the U.S. government taking the lead in private data versus homeland security matters.

Judging from past experience, it is essential to create a new set of regulations that will make outsourcing private security and military activities acceptable. First of all, there must be a clear connection between contractors and law enforcement agencies. Moreover, private military organizations participating in a conflict on the U.S. side must be held accountable for their actions in the same manner as the U.S. troops are. Lastly, PSMCs that provide private security for non-governmental clients must openly disclose their activities to the necessary departments for assessment of the legality of such operations.

Conclusion

In conclusion, private security companies provide significant assistance to the security of the United States. Outsourcing the War on Terror led the country on a path that was not well-defined in the law, which led to numerous scandals and post-factum regulations. However, such an approach is not feasible, as it promotes unethical behavior among private contractors and significantly undermines their reputation. At the same time, the armies across the globe get privatized at a rapid pace due to the global war on terrorism expanding to all countries threatened by political and apolitical criminal organizations. There are apparent benefits in using PSMCs as a part of homeland security, as their activities can be tailored to their clients preferences. Despite this advantage, PSMCs operations tend to be non-transparent, which significantly harms their reputation and legal standing, both within the United States and on the international scene. New regulations on PSMCs boundaries, behavior, transparency, accountability, and communication can create an environment that will guarantee that outsourcing security and military operations are a viable path forward.

References

Abel, R. L. (2018). Laws wars: The fate of the rule of law in the U.S. War on Terror. Cambridge University Press.

Brands, H., & OHanlon, M. (2021). The War on Terror has not yet failed: A net assessment after 20 years. Survival, 63(4), 33-54.

Cusumano, E., & Kinsey, C. (2021). Advancing private security studies: Introduction to the special issue. Small Wars & Insurgencies, 33(1-2), 1-21.

Hlouchova, I. (2020). Countering terrorism in the shadows: The role of private security and military companies. Security and Defence Quarterly, 31(4), 155-169.

Lubin, A. (2021). Neverending War on Terror. University Of California Press.

McFate, S. (2019). Mercenaries and war: Understanding private armies today. The College of International Security Affairs.

Ranito, J. J. (2019). Regulating U.S. private security contractors. Springer.

Outsourcing is the act of giving an inside work to an outside company. This might seem to some people a bit confusing in terms of that if a company can not do something is that means you do not suppose to go to them and take a job from them. In a more general view , yes this is true ,but when it comes to the truth. Company A is not specialize in making databases ,so for this it asks Oracle to make it for them , not the whole project just the database. In this term company A will make sure that the database is built in much more effecint way since it is the most important part of their job and they do not want to miss this part of the project up since it is very crusal. This will get us to some of the main problems in this field. If they are handing their most crucial part of the project ( in some cases) what happen if this company is not as good as company A though it is?

Problems

As for the problems we will only take the major problems that affects more general outsourcing companies and their partnership.

Cost

It all comes to the cost. Any company that outsource their job their first consirn is “money” as any other companies. When dealing with oursourcing, the outsroucing company will ask for a good amount of money to insure that any of the dealt problems are solved ( since no one outsrouce without having a problem, mostly). This unfortinatly is always the problem. Outsourcing companies will always fight to take a job from large companies and this will always have a “cheap” company that will sell it services for a convising amount. This will make any company that want to outsource jumb into the line to ask for it. Not knowing that this is not the right company to deal with. They might get the job done , but is it worth dealing with much more complicated problems in the future?

Rushing to meet a tight deadline

Another problem when dealing with outsourcing is time. Time always is more important than even money itself. This is what always happens. Company A give company B a job to do (Outsourced) ,but what company A want is for this job to finish within 3 weeks. Company B agrees because they want the money, but company B in the middle of development face a problem that needs more than 3 weeks to be solved correctly. What will happen that company B will not solve the problem ,but rather find a way around it ,but by that time everything has gone out of the plan. Eventually everything will fall apart as it has from the beginning.

Poor communication

Communication one of the major part in life, not just in business. Having a poor communication meaning you can not transfer the correct idea that you have in your mind to the person in front of you. Meaning this will result in the misunderstanding of your thoughts and imagination. Having this as a problem means you will never get what you want. Not connecting to the outsourced company and not transferring the right idea about the problem means paying more to fix problems that may happen in this structure. Remember we always have a deadline which in itself a problem as we said ,but also adding the problem of poor communication it means everything will run out of your hands and will always result in nothing that what the company wants.

“he State of Indiana wanted to outsource modernizing its welfare processing system. They wanted to transform it, introduce a new service delivery model to reduce costs and fix violations. The goal was to allows people to use the system online, be able to make a claim personally or over the phone.”

A deal worth of 1.6 bilion dollar that ended up in a loss to the state of Indiana. I t was a horrable way time for IBM a leading company in the IT bussniss. IBM is one of the leading leaders in the market yet they still faced this crisis that lead to the unimaginable loss to both sides. This means that this is not just depending on how a big of a company you are. If you are not aware you will loss no matter what.