Contemportary Developments in Management Essay Example | Topics and Well Written Essays - 2500 words

Contemportary Developments in Management - Essay Example This essay stresses that the high technology firms like Microsoft, Dell, Cisco, PeopleSoft, Oracle, Accenture, Ernst & Young and IBM, were under pressure to reduce costs. In the beginning of the 21st century the labor market was relatively poor. The business success of the large and medium corporations in the US is largely dependent on the consumer. Thus because of poor labor market, there was a downturn in the stock market. Investor sentiments were low and firms experienced reduction in trading volume. This affected the demand for computers and ultimately put pressure on the high technology companies to reduce costs. This is how offshoring increased during this period which was considered to be exporting good American jobs to low-wage nations. This paper discusses that the protectionists in the US allege that job losses are inevitable. The US high-technology industry is increasingly reliant on sub-contracted, non-unionized and illegal labor as well as exploitation of cheap labor in third world countries. The authors allege that the industry is centered on profit maximization with little or no concern for the nation. Based on various theories and business models, studies suggest that offshore outsourcing is preferred to domestic outsourcing or vertical integration of the firm. Global integration provides further reasons for outsourcing like thicker markets due to combining of economies.