Outsourcing

Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. Outsourcing is a business decision that is often made to lower costs or focus on core competences. A related term, offshoring, means transferring work to another country, typically overseas. Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country. Outsourcing became a popular buzzword in business and management in the 1990s. EDS was the first company to establish the outsourcing business.

Overview

Outsourcing is defined as the management and/or day-to-day execution of an entire business function by a third party service provider.

Outsourcing and/or out-tasking involve transferring a significant amount of management control to the supplier. Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. Likewise, buying services from a provider is not necessarily outsourcing or out-tasking. Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust.

Organizations that deliver such services feel that outsourcing requires the turning over of management responsibility for running a segment of business. In theory, this business segment should not be mission-critical, but practice often dictates otherwise. Many companies look to employ expert organizations in the areas targeted for outsourcing. Business segments typically outsourced include Information Technology, Human Resources, Facilities and Real Estate Management and Accounting. Many companies also outsource customer support and call center functions, manufacturing and engineering. Outsourcing business is characterized by expertise not inherent to the core of the client organization.

The overhead costs of customer service are typically less where outsourcing has been used, leading to many companies, from utilities to manufacturers, closing their in-house customer relations departments and outsourcing their customer service to third party call centers. The logical extension of these decisions was of outsourcing labor overseas to countries with lower labor costs, this trend is often referred to as offshoring of customer service.

Due to this demand call centers have sprung up in Canada, China, Eastern Europe, India, Israel, Ireland, Pakistan, Philippines and even the Caribbean. Many companies, most notably Dell and AT&T Wireless, have gained significant negative publicity for their decisions to use non-US labor for customer service and technical support; one of the most prominent complaints being the expectation that the replacement staff will have more trouble communicating with customers.

A related term is out-tasking: turning over a narrowly-defined segment of business to another business, typically on an annual contract, or sometimes a shorter one. This usually involves continued direct or indirect management and decision-making by the client of the out-tasking business.

The term "outsourcing" became more well known largely because of a growth in the number of high-tech companies in the early 1990s that were often not large enough to be able to easily maintain large customer service departments of their own. In some cases these companies hired technical writers to simplify the usage instructions of their products, index the key points of information and contracted with temporary employment agencies to find, train and hire generally low-skilled workers to answer their telephone technical support and customer service calls. These agents generally worked in call centers where the information needed to assist the calling customer was indexed in a computer system. The agents were often not able to tell the customer they did not actually directly work for the original manufacturer. In some cases, the agents are not allowed to even give out their real name.

Outsourcing, Offshoring, and Offshore Outsourcing

Note that “outsourcing”, “offshore outsourcing” and “offshoring” are used interchangeably in public discourse despite important technical differences. To be consistent, “outsourcing”, in corporate context, represents an organizational practice that involves the transfer of an organizational function to a third party. When this third party is located in another country the term “offshore outsourcing” makes more sense. “Offshoring”, in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. In short, “outsourcing” means sharing organizational control with another organization, or a process of establishing network relations within an organizational field. "Offshoring”, on the other hand, represents a relocation of an organizational function to a foreign country, not necessarily a transformation of internal organizational control.

Arguments for Outsourcing

A recent poll of economists by the Wall Street Journal found that only 16 % of them saw outsourcing as having a significant impact on the overall job picture. [1]

One criticism of outsourcing is that product quality suffers. But the outsourcing firm has freedom to move a firm department or division back home if its profits are suffering as a result of poor quality. In fact, many American companies like Dell have moved customer service divisions back to America as a result of poor quality [2]. The decision to outsource is like any other business investment decision in that there is risk. Critics of outsourcing often talk about outsourcing failures without mentioning instances of outsourcing success. The decision to outsource is like the decision to expand a business overseas, to incorporate computer technology, or to hire new workers. If the company does it correctly, it benefits from higher profits. Proponents of outsourcing believe that arguing that outsourcing leads to lower product quality is pointless because if it were true, consumer demand will force firms to shift back to producing the good or service in-firm rather than out-firm. That many large businesses outsource and continue to outsource suggests that in many cases outsourcing is successful in that it increases product quality, lowers costs substantially, or both.

Some economists have argued that outsourcing is a form of technological innovation analogous to machines on a car assembly line. American Motor Company Ford relied heavily on workers in the past to assemble car parts. Today these workers are replaced by machines because they are cheaper in the long run, produce better quality products, or a combination of both (the firm is trying to increase its quality to cost ratio, quality being defined by the consumer and inferred from revenue). Economists argue that machines on the car assembly line must have a higher quality to cost ratio than workers because, if they didn’t, there would be no incentive for the firm to replace workers with machines. Although workers’ jobs were lost from this replacement of workers with machines, the Ford Motor Company made more money by lowering costs (or increasing quality, thereby increasing revenue). Some argue that greater profits to the labor owners lead to higher consumption, which leads to further job creation, allowing those who lost jobs to gain jobs in other sectors of the economy. However, economists do concede that labor is not always perfectly mobile and that some workers may have difficulty getting new jobs. Some economists suggest that government training programs be provided.

A firm's motivation for replacing workers with machines is identical to the motivation for outsourcing, i.e. the firm is trying to maximize the quality of its product given cost (its productivity). Because outsourcing allows for lower costs, even if quality reduces slightly or not at all, productivity increases, which benefits the economy on aggregate.

Economist Thomas Sowell from the University of Chicago said “anything that increases economic efficiency--whether by outsourcing or a hundred other things--is likely to cost somebody's job. The automobile cost the jobs of people who took care of horses or made saddles, carriages, and horseshoes.” [1] Walter Williams, another economist, said “we could probably think of hundreds of jobs that either don't exist or exist in far fewer numbers than in the past--jobs such as elevator operator, TV repairman and coal deliveryman. ‘Creative destruction’ is a discovery process where we find ways to produce goods and services more cheaply. That in turn makes us all richer.” [2]

Professor Drezner reports that for every dollar spent on outsourcing to India, the United States reaps between $1.12 and $1.14 in benefits. [3] Drezner also points out that large software companies such as Microsoft and Oracle have increased outsourcing and used the savings for investment and larger domestic payrolls. Nationally, 70,000 computer programmers lost their jobs between 1999 and 2003, but more than 115,000 computer software engineers found higher-paying jobs during that same period. [3]

Advocates of outsourcing also claim that outsourcing-related fraud is insignificant, averring that such malpractices can occur in any country. For example, 40 million credit card numbers were stolen in June 2005 at CardSystems Solutions in Tucson, Arizona. (See the full story.). In December 2005, nearly 50 people were indicted in connection with a scheme that bilked at least $200,000 from Katrina relief fund at Red Cross claim center in Bakersfield, Calif., which handled calls from storm victims.

Criticisms of Outsourcing

Because "outsourced" workers are not actually paid agents of the company, it has been argued that there is less incentive for the agent to show loyalty or work ethic in its representation of said company. It has been therefore argued that quality levels of customer service and technical support of outsourced tasks are lower than where they have remained 'in-house'.

The 2004 US presidential election race focused on outsourcing to some degree. This debate did not center on problems of declining quality of customer services but on the threat to US jobs and work. Criticism of outsourcing, from the perspective of US citizens, by-and-large, revolves around the costs associated with transferring control of the labor process to an external entity in another country. A Zogby International poll reports that 71% of American voters believe that “outsourcing jobs overseas” hurts the economy and another 62% believe that the US government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource. The poll of over 1,000 Americans was conducted in August 2004 (See Zogby International survey results online at zogby.com).

Outsourcing appears to threaten the livelihood of domestic workers and the American Dream. This is especially true for high-tech workers who were promised the “jobs of tomorrow”- a phrase Bill Clinton iterated in 1994 to justify his conservative position on NAFTA. Outsourcing appears to work contrary to the claim that “free trade” will create the “jobs of tomorrow” in America when high-tech or high paying white collar jobs are transferred to or created in foreign countries. Thus, outsourcing is criticized as it represents a new threat to labor, contributing to rampant worker insecurity, and reflective of the general process of globalization where the United States government fails to mediate business-labor relations in a way conducive to prevailing values that places the American middle class worker as a central priority.

Criticism of outsourcing from the public and media sometimes tend to concentrate on lackluster customer service and technical support being provided by either local workers who are not actually employees of the company, or by overseas workers attempting to communicate with Americans in broken or incomprehensible English. Defenders of outsourcing say if this were true, then companies would experience market forces compelling them to return service and support handling back from the outsourced company. However, service and support are often not considered by customers as part of their original purchases. Customers only experience outsourced service and support after they have spent their money since sales is generally done in-house by the original company. Dealing with lackluster outsourced service is a negative surprise after the money is already spent.

Policy solutions to outsourcing are also criticized. One solution often offered is retraining of domestic workers to new jobs. However, some of these workers are already highly educated and already possess a bachelor's and master's degree. Retraining to their current level in another field may not be an option due to years of study and cost of education involved. There is also little incentive given that the jobs in their new field could also be outsourced as well. Proportions of workers trained for Science, Technology, Engineering, and Mathematics (STEM) fields fields in developing nations are viewed to outstrip traditional technology leaders such as the U.S. With these traditionally "safe" jobs perceived to be endangered, this raises questions regarding whether origin countries can maintain any comparative advantage given the losses in both low and high-value jobs.

There are also security issues concerning companies giving outside access to sensitive customer information. In April of 2005, a high-profile case involving the theft of $350,000 from four Citibank customers occurred when Indian call center workers in Pune, India, acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified the bank. (See the full report.)

Outright fraud is also a concern. In 2005, Intel discovered and fired 250 Indian employees after they faked their expense reports. The firings followed from Intel's internal Business Practice Excellence programme of expenses claims. The report concluded that fraudulent practises such as "faking bills to claim your allowances like conveyance [and] drivers’ salaries" were some common malpractices in India. Intel would not put up with such fraud. NASSCOM, which is a forum of IT and ITeS companies, has attempted to address these fraud concerns in India by creating the National Skills Registry. That database contains personal and work-related information, enabling employers to verify a staff member's credentials and allowing police to track the background of workers.

Democratic U.S. presidential candidate John Kerry blasted firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their fair share of US taxes during his unsuccessful 2004 campaign, calling such firms "Benedict Arnold corporations," in reference to the infamous traitor Benedict Arnold.

It is argued a malicious implementation of the Higher Education Role Analysis (HERA) in the UK may force Higher Education administrative and support staff to prematurely retire or seek for new employment in other organisations, thus freeing of staff many departments which could then be effectively outsourced. Outsourcing departments like Accounts, Payroll and Procurement is now common practice, as seen in August 2005 at the University of Portsmouth.

Notes

  1. ^  This view is borne out by a recent study by Richard Freeman at the National Bureau of Economic Research in Washington. He found that in the year 2000, 17 % of university bachelor degrees in the U.S. were in science and engineering compared with a world average of 27 % and 52 % in China. Universities in the European Union granted 40 % more science and engineering doctorates than the United States, with that figure expected to reach nearly 100 % by about 2010 according to Freeman's paper.
  2. 1. ^  “Outsourcing” and “Saving Jobs” by Thomas Sowell
  3. 2. ^  Should we “Save Jobs”? by Walter Williams
  4. 3. ^  "Outsourcing is the Kool" (kOOL PEOPLE)

Literature

Mark Kobayashi-Hillary. 2004. (2nd ed 2005) Outsourcing to India. ISBN 354023943X.


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(2nd ed 2005) Outsourcing to India. ISBN 354023943X. The TV network/channel is the cradle of this mega-complex built and increased in last decades for the great financial success gotten by Rede Globo. 2004. Rede Globo is a part of Organizações Globo a communication conglomerate, the 5th biggest of the world. Mark Kobayashi-Hillary. The Marinho family bought the national rights to the documentary, and by refusing to license it to other broadcasters or release it on video, curtailed its distribution in Brazil. Outsourcing departments like Accounts, Payroll and Procurement is now common practice, as seen in August 2005 at the University of Portsmouth. In 1993 Channel Four made a documentary Beyond Citizen Kane about the power and influence of the network in Brazil.

It is argued a malicious implementation of the Higher Education Role Analysis (HERA) in the UK may force Higher Education administrative and support staff to prematurely retire or seek for new employment in other organisations, thus freeing of staff many departments which could then be effectively outsourced. Most notoriously, in 1989, it broadcast an edited version of the last debate between Fernando Collor de Mello, whom it openly favored, and Luiz Inácio Lula da Silva (current President - 2003/2007), just before election day in a manner that the former received more air time and had more favorable segments of the debate shown. presidential candidate John Kerry blasted firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their fair share of US taxes during his unsuccessful 2004 campaign, calling such firms "Benedict Arnold corporations," in reference to the infamous traitor Benedict Arnold. Rede Globo has and has had for many years by far the biggest number of viewers in Brazil, thus also having the power to influence election results, especially with the use of it's news broadcasting in manner that is favorable to its proprietors' preferred candidates. Democratic U.S. It also operates a similar channel in Portugal, called GNT. That database contains personal and work-related information, enabling employers to verify a staff member's credentials and allowing police to track the background of workers. TV Globo Internacional operates satellite television channels around the world, including the United States, Europe, Japan and Africa, bringing a mix of entertainment, news and sports programming to Brazilian and other Portuguese-speaking people.

NASSCOM, which is a forum of IT and ITeS companies, has attempted to address these fraud concerns in India by creating the National Skills Registry. Rede Globo has its own TV stations in Rio de Janeiro (Rio de Janeiro State), São Paulo (São Paulo), Brasília (Distrito Federal), Belo Horizonte (Minas Gerais) and Recife (Pernambuco). Intel would not put up with such fraud. Is recognized as the world's biggest TV network in territorial distance enclosing all of the States of Brazil. The report concluded that fraudulent practises such as "faking bills to claim your allowances like conveyance [and] drivers’ salaries" were some common malpractices in India. Afiliates cover 97% of territory of Brazil. The firings followed from Intel's internal Business Practice Excellence programme of expenses claims. Projac is one of largest TV production centers in the world and the biggest in Latin America, with numerous scenographic cities as locations for soap operas.

In 2005, Intel discovered and fired 250 Indian employees after they faked their expense reports. Rede Globo has a main production complex in Rio de Janeiro called "Projac" (oficially named "Central Globo de Produção", or Globo Production Center), where most of their shows are produced, and another center in São Paulo. Outright fraud is also a concern. These are exported all over the world, especially to Portugal where they have a cult following, and are also shown dubbed into different languages. (See the full report.). It is famous for the telenovelas (soap operas) which, together with the news and football, dominate primetime viewing in Brazil. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified the bank. The national news, "Jornal Nacional," was the first to be transmitted nationally in Brazil.

In April of 2005, a high-profile case involving the theft of $350,000 from four Citibank customers occurred when Indian call center workers in Pune, India, acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. Rede Globo is present in all states of the country and is the market leader, with a share of 40-60% of the audience. There are also security issues concerning companies giving outside access to sensitive customer information. The network was aired by Roberto Marinho and the Marinho family. With these traditionally "safe" jobs perceived to be endangered, this raises questions regarding whether origin countries can maintain any comparative advantage given the losses in both low and high-value jobs. In 1966 it started to air in São Paulo. Proportions of workers trained for Science, Technology, Engineering, and Mathematics (STEM) fields fields in developing nations are viewed to outstrip traditional technology leaders such as the U.S. Globo started airing on April 26, 1965 in Rio de Janeiro.

There is also little incentive given that the jobs in their new field could also be outsourced as well. . Retraining to their current level in another field may not be an option due to years of study and cost of education involved. Is also the third biggest TV channel of the world, being watched by 80 millions people daily. However, some of these workers are already highly educated and already possess a bachelor's and master's degree. Rede Globo is Brazil's biggest television network and also number one producer and provider of Portuguese language television programming in the world. One solution often offered is retraining of domestic workers to new jobs. Telecurso 2000.

Policy solutions to outsourcing are also criticized. Um Salto para o Futuro I (produced by TV Escola). Dealing with lackluster outsourced service is a negative surprise after the money is already spent. Santa Missa com Padre Marcelo Rossi. Customers only experience outsourced service and support after they have spent their money since sales is generally done in-house by the original company. Intercine. However, service and support are often not considered by customers as part of their original purchases. Sessão da Tarde.

Defenders of outsourcing say if this were true, then companies would experience market forces compelling them to return service and support handling back from the outsourced company. Domingo Maior. Criticism of outsourcing from the public and media sometimes tend to concentrate on lackluster customer service and technical support being provided by either local workers who are not actually employees of the company, or by overseas workers attempting to communicate with Americans in broken or incomprehensible English. Corujão. Thus, outsourcing is criticized as it represents a new threat to labor, contributing to rampant worker insecurity, and reflective of the general process of globalization where the United States government fails to mediate business-labor relations in a way conducive to prevailing values that places the American middle class worker as a central priority. Festival Nacional. Outsourcing appears to work contrary to the claim that “free trade” will create the “jobs of tomorrow” in America when high-tech or high paying white collar jobs are transferred to or created in foreign countries. Cinema Especial.

This is especially true for high-tech workers who were promised the “jobs of tomorrow”- a phrase Bill Clinton iterated in 1994 to justify his conservative position on NAFTA. Sessão de Gala. Outsourcing appears to threaten the livelihood of domestic workers and the American Dream. Tela Quente. The poll of over 1,000 Americans was conducted in August 2004 (See Zogby International survey results online at zogby.com). Globo Esporte. A Zogby International poll reports that 71% of American voters believe that “outsourcing jobs overseas” hurts the economy and another 62% believe that the US government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource. Esporte Espetacular.

Criticism of outsourcing, from the perspective of US citizens, by-and-large, revolves around the costs associated with transferring control of the labor process to an external entity in another country. Auto Esporte. This debate did not center on problems of declining quality of customer services but on the threat to US jobs and work. TV Xuxa. The 2004 US presidential election race focused on outsourcing to some degree. TV Globinho. It has been therefore argued that quality levels of customer service and technical support of outsourced tasks are lower than where they have remained 'in-house'. TV Colosso.

Because "outsourced" workers are not actually paid agents of the company, it has been argued that there is less incentive for the agent to show loyalty or work ethic in its representation of said company. Vídeo Show. In December 2005, nearly 50 people were indicted in connection with a scheme that bilked at least $200,000 from Katrina relief fund at Red Cross claim center in Bakersfield, Calif., which handled calls from storm victims. Vale a Pena Ver de Novo. (See the full story.). Sob Nova Direção. For example, 40 million credit card numbers were stolen in June 2005 at CardSystems Solutions in Tucson, Arizona. Sítio do Picapau Amarelo.

Advocates of outsourcing also claim that outsourcing-related fraud is insignificant, averring that such malpractices can occur in any country. Sexo Frágil. [3]. Sai de Baixo. Nationally, 70,000 computer programmers lost their jobs between 1999 and 2003, but more than 115,000 computer software engineers found higher-paying jobs during that same period. Programa do Jô. [3] Drezner also points out that large software companies such as Microsoft and Oracle have increased outsourcing and used the savings for investment and larger domestic payrolls. Os Normais.

Professor Drezner reports that for every dollar spent on outsourcing to India, the United States reaps between $1.12 and $1.14 in benefits. O Clone. That in turn makes us all richer.” [2]. Malhação. ‘Creative destruction’ is a discovery process where we find ways to produce goods and services more cheaply. Mais Você. The automobile cost the jobs of people who took care of horses or made saddles, carriages, and horseshoes.” [1] Walter Williams, another economist, said “we could probably think of hundreds of jobs that either don't exist or exist in far fewer numbers than in the past--jobs such as elevator operator, TV repairman and coal deliveryman. Hoje é Dia de Maria.

Economist Thomas Sowell from the University of Chicago said “anything that increases economic efficiency--whether by outsourcing or a hundred other things--is likely to cost somebody's job. Estação Globo. Because outsourcing allows for lower costs, even if quality reduces slightly or not at all, productivity increases, which benefits the economy on aggregate. Domingão do Faustão. the firm is trying to maximize the quality of its product given cost (its productivity). Casseta & Planeta. A firm's motivation for replacing workers with machines is identical to the motivation for outsourcing, i.e. Big Brother Brasil.

Some economists suggest that government training programs be provided. Bambuluá. However, economists do concede that labor is not always perfectly mobile and that some workers may have difficulty getting new jobs. A Turma do Didi. Some argue that greater profits to the labor owners lead to higher consumption, which leads to further job creation, allowing those who lost jobs to gain jobs in other sectors of the economy. A Grande Família. Although workers’ jobs were lost from this replacement of workers with machines, the Ford Motor Company made more money by lowering costs (or increasing quality, thereby increasing revenue). Altas Horas.

Economists argue that machines on the car assembly line must have a higher quality to cost ratio than workers because, if they didn’t, there would be no incentive for the firm to replace workers with machines. A Diarista. Today these workers are replaced by machines because they are cheaper in the long run, produce better quality products, or a combination of both (the firm is trying to increase its quality to cost ratio, quality being defined by the consumer and inferred from revenue). Pequenas Empresas, Grandes Negócios. American Motor Company Ford relied heavily on workers in the past to assemble car parts. Linha Direta. Some economists have argued that outsourcing is a form of technological innovation analogous to machines on a car assembly line. Jornal Nacional.

That many large businesses outsource and continue to outsource suggests that in many cases outsourcing is successful in that it increases product quality, lowers costs substantially, or both. Jornal Hoje. Proponents of outsourcing believe that arguing that outsourcing leads to lower product quality is pointless because if it were true, consumer demand will force firms to shift back to producing the good or service in-firm rather than out-firm. Jornal da Globo. If the company does it correctly, it benefits from higher profits. Globo Rural. The decision to outsource is like the decision to expand a business overseas, to incorporate computer technology, or to hire new workers. Fantástico.

Critics of outsourcing often talk about outsourcing failures without mentioning instances of outsourcing success. Bom Dia Brasil. The decision to outsource is like any other business investment decision in that there is risk. Carla Camurati. In fact, many American companies like Dell have moved customer service divisions back to America as a result of poor quality [2]. José Wilker. But the outsourcing firm has freedom to move a firm department or division back home if its profits are suffering as a result of poor quality. Paulo Gracindo.

One criticism of outsourcing is that product quality suffers. Francisco Cuoco. [1]. Chico Anysio. A recent poll of economists by the Wall Street Journal found that only 16 % of them saw outsourcing as having a significant impact on the overall job picture. Lima Duarte. "Offshoring”, on the other hand, represents a relocation of an organizational function to a foreign country, not necessarily a transformation of internal organizational control. Regina Duarte.

In short, “outsourcing” means sharing organizational control with another organization, or a process of establishing network relations within an organizational field. Deborah Secco. “Offshoring”, in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. Glória Menezes. When this third party is located in another country the term “offshore outsourcing” makes more sense. Tarcísio Meira. To be consistent, “outsourcing”, in corporate context, represents an organizational practice that involves the transfer of an organizational function to a third party. Galvão Bueno.

Note that “outsourcing”, “offshore outsourcing” and “offshoring” are used interchangeably in public discourse despite important technical differences. Jô Soares. In some cases, the agents are not allowed to even give out their real name. Vera Fisher. The agents were often not able to tell the customer they did not actually directly work for the original manufacturer. Xuxa. These agents generally worked in call centers where the information needed to assist the calling customer was indexed in a computer system. Sonia Braga.

In some cases these companies hired technical writers to simplify the usage instructions of their products, index the key points of information and contracted with temporary employment agencies to find, train and hire generally low-skilled workers to answer their telephone technical support and customer service calls. Rodrigo Santoro. The term "outsourcing" became more well known largely because of a growth in the number of high-tech companies in the early 1990s that were often not large enough to be able to easily maintain large customer service departments of their own. Fernanda Montenegro. This usually involves continued direct or indirect management and decision-making by the client of the out-tasking business. Universal TV, pay tv channel, 50%. A related term is out-tasking: turning over a narrowly-defined segment of business to another business, typically on an annual contract, or sometimes a shorter one. Fundação Roberto Marinho, philanthropic foundation.

Many companies, most notably Dell and AT&T Wireless, have gained significant negative publicity for their decisions to use non-US labor for customer service and technical support; one of the most prominent complaints being the expectation that the replacement staff will have more trouble communicating with customers. 98 FM, FM radio station. Due to this demand call centers have sprung up in Canada, China, Eastern Europe, India, Israel, Ireland, Pakistan, Philippines and even the Caribbean. RBS, AM/FM radio station and TV affiliate. The logical extension of these decisions was of outsourcing labor overseas to countries with lower labor costs, this trend is often referred to as offshoring of customer service. CBN, FM news radio network. The overhead costs of customer service are typically less where outsourcing has been used, leading to many companies, from utilities to manufacturers, closing their in-house customer relations departments and outsourcing their customer service to third party call centers. Radio Globo, AM radio network.

Outsourcing business is characterized by expertise not inherent to the core of the client organization. Globo.com, a webportal. Many companies also outsource customer support and call center functions, manufacturing and engineering. GNT, pay tv channel in Portugal. Business segments typically outsourced include Information Technology, Human Resources, Facilities and Real Estate Management and Accounting. International, pay tv channel worldwide. Many companies look to employ expert organizations in the areas targeted for outsourcing. Globosat, pay tv channels.

In theory, this business segment should not be mission-critical, but practice often dictates otherwise. SKY TV Brasil, satellite pay tv, 47%. Organizations that deliver such services feel that outsourcing requires the turning over of management responsibility for running a segment of business. NET TV, cable tv network. Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust. Globo Video, home video distributor. Likewise, buying services from a provider is not necessarily outsourcing or out-tasking. Globo Filmes, film studio.

Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. Editora Globo, publishing group. Outsourcing and/or out-tasking involve transferring a significant amount of management control to the supplier. Valor Econômico, daily business newspaper in São Paulo (50%-50% with Grupo Folha). Outsourcing is defined as the management and/or day-to-day execution of an entire business function by a third party service provider. Diário de São Paulo, daily newspaper in São Paulo. . Extra, daily newspaper in Rio de Janeiro.

EDS was the first company to establish the outsourcing business. O Globo, daily newspaper in Rio de Janeiro. Outsourcing became a popular buzzword in business and management in the 1990s. Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country. A related term, offshoring, means transferring work to another country, typically overseas.

Outsourcing is a business decision that is often made to lower costs or focus on core competences. Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. ^  "Outsourcing is the Kool" (kOOL PEOPLE). 3.

^  Should we “Save Jobs”? by Walter Williams. 2. ^  “Outsourcing” and “Saving Jobs” by Thomas Sowell. 1.

Universities in the European Union granted 40 % more science and engineering doctorates than the United States, with that figure expected to reach nearly 100 % by about 2010 according to Freeman's paper. were in science and engineering compared with a world average of 27 % and 52 % in China. He found that in the year 2000, 17 % of university bachelor degrees in the U.S. ^  This view is borne out by a recent study by Richard Freeman at the National Bureau of Economic Research in Washington.

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