Reversing Outsourcing in the New World Economy

Reversing Outsourcing in the New World Economy

Initially, outsourcing was the trend that saved labor cost as the majority of unionized organizations preferred producing their goods in the non-unionized country. However, the trend started changing in the 21st century as illustrated by Sikula Sr, Kim, Braun, and Sikula, (2010), after unhappy customers began complaining about outsourcing companies. The embers were fueled by terrorism and global economic rescission. Insourcing is strengthened by the lack of control both in the form of national security and organization operations. Due to the changing trend in global business, I agree with the outsourcing reversal.

The resourcing pendulum is swinging back towards insourcing in the United States and other countries. The market speed of an organization is increased, which is more important than quality and price which are two core factors of outsourcing. An example is Bayer Group in Germany, a pharmaceutical industry which has turned its back on low-cost active pharmaceutical ingredient from India to speed up its market. According to Sikula Sr, Kim, Braun and Sikula, (2010), today’s world is egocentric where current pleasure and immediate gratifications are important considerations for the majority of overeager consumers. Another factor is the innovation where the United States is the leader of research and development (R&D). According to the majority of business experts, better results are produced by R&D insourcing than outsourcing.

Customer satisfaction is another factor driving companies to insource. ALS (2014) explains that a majority of clients are concerned with the quality of a product and not its price. For example, a majority of organizations has seen a rise of unhappy customers due to outsource of technical services to India. Insourcing eliminates the communication barrier as there is no time zones and time difference between colleagues. Although outsourcing relies on computer and other digital advances, people tend to communicate effectively with lessened geographical distance. In America, the levels of insourcing will increase in the coming years particularly in the government-national level. Therefore, the changing trends in global business in the 21st century calls for more insourcing in America and other organizations in the world.

References

ALS,. (2014). Outsourcing versus Insourcing. ALS Distribution Services. Retrieved from https://cdn2.hubspot.net/hub/159356/file-581693922-pdf/docs/asl_blog_-_outsourcing_vs_insourcing_march_6_-_2014.pdf

Sikula Sr, Kim, Braun, & Sikula,. (2010). Insourcing: Reversing American Out sourcing in the New World Economy (1st ed., pp. 3-9). Supervision. Retrieved from http://mds.marshall.edu/cgi/viewcontent.cgi?article=1001&context=mgmt_faculty