American Outsourcing Case Analysis - 2075 Words

Case Summary The American Outsourcing Case is a compilation of factual information for the purpose of provoking debates. The authors present both the pros and cons of outsourcing, and avoid inserting their personal bias. The case clearly defines outsourcing and then focuses on outlining its existence in China, Mexico, and India. The evolution and U.S. involvement in the Maquiladoras of Mexico is described first. The implementation of NAFTA and the creation of Maquiladoras were major catalysts in the growth of free trade between the U.S. and Mexico. China, in an attempt to attract foreign investors, created Special Economic Areas, which designated geographic zones that were enabled to operate under their own laws. With great tax benefits†¦show more content†¦Some companies might be deterred from outsourcing here, since the Mexican government has some strict regulations. â€Å"They require paid vacation premium, eight paid holidays each year, medical care coverage, employee training, Mexi can social security, overtime, premiums, Christmas bonus of 15 days salary, and profit sharing of 10 percent of total profits† (Schniederjans). Mexico is also notorious for economic volatility and instability. Their dependence on the U.S. economy is unhealthy, they often experience our negative economic fluctuations to a magnified degree. Lots of companies prefer to invest their money in countries that offer a little more stable. â€Å"Today, Indian outsourcing is one of the best ways for CIOs to cut application development and maintenance costs, and deal effectively with the peaks and valleys of software demands.† (Yeo). Outsourcing to India is still focused primarily on highly technological aspects, but is not limited there. They are known for creative development in the pharmaceutical field, and have recently developed an unsurpassed medication for adult ADHD. Their superior IT assistance is not limited to companies, they offer many websites for individuals seeking help with programming. In mid 2007, U.S. outsourcing to India reached $4.9 billion. Although technologically advanced, they still lag in economic prosperity and therefore still don’t expect the type of compensation that Americans do. â€Å"TheyShow MoreRelatedOutsourcing For A Human Resource Essay1698 Words   |  7 Pagesthe aforementioned citation, it presents an intuitive frame of reference into the principal purpose of this module one case assignment. As this case assignment will be composed of an essay that will initially specify whether or not, I as a student of this course oppose or favor outsourcing jobs overseas. 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