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Posted on May 3rd, 2014, by

Today, outsourcing became very popular among American employers and many researchers (Gates, 29) point out that the US economy tends to outsource many jobs, especially in those industries, where the high qualification of employees is not needed. For instance, many leading car manufacturers of the use outsource assembling of their vehicles abroad. For instance GM develops its assembling facilities in China that leads to costs saving and allows the company to increase the effectiveness and cost-efficiency of its production. The example of GM is typical for the development of the US economy because many companies affect consistently the position of American companies in the global economy. In fact, the position of American companies depends on the situation in the national economy but outsourcing helps American companies to save costs and improve their competitive position in the global market.

In this respect, Chinese market is particularly attractive for American companies because they tend to outsource jobs to China, where the costs of the labor force are consistently lower compared to the US. In addition, the position of the US companies can affect consistently their position due to the enhancement of their position in the global market. At the same time, outsourcing jobs to China opens larger opportunities for American companies to enter Chinese market. Therefore, American companies can benefit from outsourcing jobs to China.

However, outsourcing in China is associated with certain risks and threats, which American companies have to take into consideration. First of all, American companies have take into consideration the situation concerning human rights in China. At this point, it is important to place emphasis on the fact that China tends to the violation of human rights, while the political situation in the country is characterized by the total control from the part of the Communist Party over all spheres of human life in the country. In such a situation, the violation of human rights in China is virtually a norm. Therefore, the violation of human rights affects consistently the position of American companies. At this point, it is important to place emphasis on the fact that many American companies have to develop effective relationships with customers in the US and European market as well as other countries. To put it more precisely, customers in well-developed democratic countries are very concerned with the reputation of companies. In such a situation, companies using outsourcing have to take into consideration the position of companies in the market and the attitude of customers to them. In this regard, customers may grow dissatisfied with the violation of human rights of employees. In this regard, the companies using outsourcing have to take into consideration the violation of human rights in target countries, where they outsource jobs. What is meant here is the fact that companies operating in the US may face considerable problems if they outsource jobs in other countries but the violation of human rights in these countries can deteriorate the position of American companies in the domestic market as well as in the market of democratic countries. In such a way, companies outsourcing jobs in China may face the problem of the deterioration of their public image and, therefore, the deterioration of their marketing position in the market. In this regard, the company-customer relationships are very important for American companies but the violation of human rights in China and other countries, where American companies outsource jobs, can deteriorate their public image and undermine their position in the domestic and international markets, where the observation of human rights are very important. For instance, some American companies, such as Nike or Adidas, who outsource jobs in China, India and other countries, often face the problem of the violation of human rights of outsourced employees. Moreover, they face the problem of using child labor that raises the public dissatisfaction and severe criticism from the part of the public. In such a way, American companies face the problem of the deterioration of their performance in the US and European market, where the respect of human rights is very important for customers and they may refuse from buying products of companies, which outsource jobs in countries, where human rights of employees are violated or where the child labor is used.

Furthermore, outsourcing jobs in such countries as China is associated with other risks. For instance, the lack of the transparency of the government economic policies is very important for the development of business and outsourcing jobs. Obviously, American companies outsourcing jobs in China can face difficulties with developing their business in China, if they lack the transparency or if they face the problem of the unfair competition. In such a situation, some companies may be in a disadvantageous position, while others may receive the government support and take an advantageous position in the market. In fact, the lack of transparency prevents the fair competition in the market that raises the problem of the adequate and successful outsourcing of jobs in China.

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