International Outsourcing

by Emily Christensen

The three primary reasons companies are moving towards international outsourcing are to decrease labor costs (thus increasing profit margins), to become more flexible in the global economy, and to escape various U.S. regulations placed on businesses. Here I briefly explain the pros and cons of this relatively controversial business strategy.

Alienation



When companies outsource they tend to subcontract in developing countries where there are large numbers of poor people who desperately need jobs. Oftentimes, these workers are illiterate and possess few technical skills that they might offer to a multi-million dollar corporation looking for new employees. But an uneducated work force is actually what these firms depend on for their outsourcing success. Many companies use a Taylorist-like approach to outsourcing where the uneducated and poor workers are quickly taught to do incredibly subdivided, alienating and repetitive tasks for up to 13 hours a day, while earning less than the country's minimum wage for their tedious labor.

Family issues

A copious amount of research has been done on how the American family is affected by having more women in the workplace, by telecommuting, by alienating jobs, and by the demise of job satisfaction. But I wonder how overseas workers are affected by these same issues. For example, Nike employs thousands of young Indonesian women to assemble their products. Certainly these women have families and children to take care of. How do women manage to tend to infants when they are forced to work 12 hours in a factory? What are the effects on these children who might be, quite literally, abandoned during most of the day? How do the dynamics of these impoverished families change when the mother/wife becomes a breadwinner and a caretaker? Do the women view themselves as more independent as a result, or simply more overworked? Are there power issues involved between husbands and wives who share the responsibility of breadwinner? Moreover, how do alienated overseas workers cope with such difficulties in their jobs? One way is to form an independent union in order to fight for more humane wages and working conditions.

Unions

As Americans we are accustomed to having specific employee rights-- including the right to fair wages, reasonable work schedules, and the right to form unions. Many workers in developing countries, however, can only dream of having such freedoms to take for granted. Valiant efforts have been made to organize independent unions in Asian countries, but the government usually sides with the foreign companies instead of its own mistreated citizens. For the most part, Asian governments would rather keep jobs in their countries than kick them out on charges of human rights violations. According to Apong Herlima, a lawyer for the Indonesian Legal Aid Foundation, "There are so many labor strikes. Employers always call the police and they come and interrogate the workers. Then the workers are fired" (Gargan, p.18). As a result, most union activity only leads to increased employee dissatisfaction because workers are easily replaced by other people in more desparate need of a job.

Management styles

The days of working in an office right next to the boss seem to be coming to a screeching halt. Today it is more often the case that employees and managers occupy separate work spaces. Whether the boss's office is in a different part of the building, in a different building altogether, or even in a different country, employees and managers are much more isolated from each other than ever before. In the case of Nike, the designers and top executive managers reside in the United States, whereas all the manufacture and assembly of the products is half a world away -- in Asia. This structuring of the workplace is indicative of the extreme hierarchical disparity within the company. Obviously the well-treated, successful, wealthy employees live in the United States where there are laws to protect workers' rights, while the oppressed, underpaid, neglected employees live in countries where such rights are only doled out to the rich. Are American businesses truly operating under "fair" capitalistic conditions, or are they just getting frightfully adept at transplanting and hiding the atrocities they commit into other areas of the world?