Outsourcing
The contemporaneous society is evolving at a rapid pace and we must all adjust in order to keep up with it. The business community has been affected by numerous forces of both micro and macroeconomic nature. A major macroeconomic force which directly impacts corporate organizations is the liberalization of markets. And this refers similarly to the free circulation of products, services, capital as well as workforce. Given that countries are now free to trade, the international competition has increased drastically and manufacturers must constantly increase the efficiency of their operations and improve the quality of their products, while in the same time promoting a competitive retail price. The combination of the need to reduce costs and the possibility to hire foreign workforce for lower wages has led to outsourcing. Outsourcing involves the sourcing of goods and services previously produced internally within the sourcing organization to external suppliers. The term outsourcing can cover many areas, including the outsourcing of manufacturing as well as services. The term outsourcing is most commonly used in relation to the switching of the supply of product or service activities to external suppliers. 1
and Outsourcing The international company was initially founded in 1964 under the name of Blue Ribbon Sports and its main activity was to import shoes from Japan and resell them on the American market. Nike as we know today, including the brand and swoosh sign, was formed in 1972. The companies in the foreign countries welcoming Nike were also affected. This will then increase the unemployment rate and will force the population to reorient itself and become better skilled and educated. In this order of ideas, the international corporation was accused for exploiting their foreign employees in the meaning that they ask them to work far too much and pay them far to less. As such, the companies were given the possibility to affirm themselves and prove their worth by working with an international corporation. For the home country, creative destruction generates a constant need to further develop and identify new technologies and new features which could support the development of the country. In this order of ideas, the first strategy is to design highly comfortable and fashionable shoes and properly market and sell them across the globe. 9These allegations seem even more entitled, when the American employees working to manufacture Nike shoes get paid per piece and when a highly skilled and experienced worker would have to work at a feverish pace in order to make the minimum wage. The term globalization is an extremely wide one and refers to areas such as culture, politics or economics and it basically reveals the influence countries have one upon the other. They managed to reduce costs and increase profits through outsourcing, but are severely criticized for their behaviour relative to the foreign manufacturers. 7 Nike was among the first companies to engage in aggressive outsourcing operations and they did this in order to expand and also reduce costs. All in all, globalization and offshoring generate both beneficial as well and negative effects.
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