Outsourcing Essay

Outsourcing is defined as the process of purchasing goods and services from outside vendors rather than producing the same goods or providing the same services within the organization. Outsourcing does not come without risks, but it also has its benefits as well. Gaining services or products from outside sources can be very beneficial, considering the alternative that the firm will have to produce them themselves. On main risk that is incurred when outsourcing is that when a firm does outsource, they leave the supply of that product or service in the hands of someone of whom they cannot control, contrary to controlling their own supply. Ethical issues are at hand here, as well as trust issues. Dealing with outsourcing is the economic flattening of the world, the negative aspects of outsourcing, the Positive aspects of outsourcing, and the expectation and possible outcomes of outsourcing.

The earth had been stirred by technology of permissive technology that it been breaking down barriers that in the past inhibited and limited global trade had the economic flattening. The world became flat of the globalization of market of the three stages that had process of culminating in its present day manifestation, Globalization 3.0. The globalization 1.0 had proceeding from the year 1492 to 1800, of the countries through political and sometimes had the military force. Globalization 2.0 in the second era companies or multinationals were globalizing from 1800 to 2000. The Globalization 3.0 the third era is when the world became flat as individuals and small groups from all nationalities began globalizing themselves after 2000. There are 10 forces that have flattened the world that the socioeconomic environment, replete with the new social, political and business model that has been activated. The 10 flattened are:

1. Collapse of Berlin Wall--11/89: The event not only symbolized the end of the Cold war, it allowed people from other side of the wall to join the economic mainstream. (11/09/1989)

2. Netscape: Netscape and the Web broadened the audience for the Internet from its roots as a communications medium used primarily by 'early adopters and geeks' to something that made the Internet accessible to everyone from five-year-olds to eighty-five-year olds. (8/9/1995)

3. Work Flow Software: The ability of machines to talk to other machines with no humans involved. Friedman believes these first three forces have become a "crude foundation of a whole new global platform for collaboration."

4. Uploading: Communities uploading and collaborating on online projects. Examples include open source software, blogs, and Wikipedia. Friedman considers the phenomenon "the most disruptive force of all."

5. Outsourcing: Friedman argues that outsourcing has allowed companies to split service and manufacturing activities into components, with each component performed in most efficient, cost-effective way.