d. Read Jobs Article 2 and answer the following questions: Explain the difference between ‘outsourcing’ and ‘offshoring’.
There is a distinct difference between what is known as outsourcing and offshoring. Outsourcing is when a particular organization contracts work out to other countries. Offshoring on the other hand is helping to get work completed in foreign countries. In simple terms outsourcing is ‘gaining’ while offshoring is ‘transferring jobs for a specific purpose’. An example of outsourcing is hiring an overseas IT intellectual capital to complete a set of projects. Offshoring as an example is transferring a countries IT expert to other countries to complete work. Offshoring is usually exploited to reduce costs, take advantage of expertise, economies of …show more content…
ii. Why do company’s offshore jobs?
The rationale as to why companies offshore jobs is to focus more on their core business, efficiency and generally low costs. An example is a banker getting paid $70,000 a year in Australia, however while in China they would get paid only $12,000. This affordability differential is the main reason bosses of companies offshore jobs to other countries. iii. What changes are occurring in the United States in regard to offshoring and why?
In regard to more people offshoring while the US dollar was high, many jobs were loss and employment was in decline. In retaliation to this US President Barack introduced changes that allowed the companies who provide jobs in the US would get bigger tax breaks. Also those outsourcing would need to pay extra taxes. This change allows for the redevelopment of more jobs in the US and in turn putting a decrease to offshoring. iv. Outline the reasons given by the author of this article for reversing the trend in offshoring? Which reasons do you find the most convincing? Explain your