Outsourcing: Positive or Negative?. What would Friedman say? Paste into browser.

Outsourcing: Positive or Negative?

What would Friedman say?

http://www.comedycentral.com/sitewide/media_player/play.jhtml?itemId=103197

Paste into browser – thanks for the idea from the Colbert Report Jake…

What would HOMER say?

http://www.videosift.com/video/The-Simpsons-India-Outsourcing

-Paste into browser & hopefully it works without being blocked-Watch first 3 & ½ minutes of clip

Where did India come from?

• Ghandi• Support Indian

economy (such as textiles to right)

• National pride• Hunger strikes to fight

British rule and internal violence

• Indian independence - 1947

Post Indep. - wasn’t Pretty…• Jawarhalal Nehru

• State ownership

• Ties with Soviet Union

• Political corruption

• Assassinations

• Conflict/War with Pakistan• Indira Ghandi (1984)

But the potential was there…

• Economic reforms started in 1991– Privatized industries (i.e. Telecom)– Lowered tariffs (top rate was 400%!)– Stopped controlling exchange rate– Increased foreign investment– Positive attitude toward reform

• Improvement still needed….– Labor laws, Small businesses, Agriculture,

Power…

• But successfully laid groundwork

• Closer ties with U.S.– Clinton visits in 2000– Bush post 9/11 cozy with India & Pakistan– 2006 deal to sell nuclear technology to India

• Closer ties with U.S.– Clinton in 2000– Bush post 9/11 cozy with India & Pakistan– 2006 deal to sell nuclear technology

All well & good, but what about…

AMERICAN JOBS

GOING TO

INDIA!!!!!

Outsourcing: Fact or Fiction?

Rationale for Outsourcing

• Relative advantage – make more important products in US / leave low cost products to others?

• Outsourcing = majority IN the US to 3rd parties• Economic benefit / Cost• Non-critical parts of business – like Y2k,

Microsoft call centers• Outsourcing extending to mission critical parts of

business (software development of onliine retailers

• CHECK OUT THIS EXAMPLE…..

SAT Prep

• “TutorVista.com outsources test prep to India, giving students 24-hours-a-day access to tutors at a fraction of the cost of a course.”– USA Today

• What do you think – surprising? Good? Bad?

Negatives?

• Corporate culture issues– Different business practices– Can decimate morale

• Communication overseas

• Business efficiency

• Management/Oversight of work

• Loose intellectual property laws (especially China)

What do you think???

HW For Monday

• Find two Opposing Viewpoint articles on:– Global free trade– Outsourcing or – Future leadership in the world economy (US, China,

India, other?)• Articles must oppose each other• Outline arguments for Monday (roughly one

page each)• Cite both sources• Will be the basis for your argument due next

week

Argument for next week

• Need six sources including:– 2 Opposing Viewpoint articles (for Monday)– 2 high quality overview sources– 2 primary sources

• Minimum of 3 page paper

• Will go over more specific requirements when I get back to school