Globalization, Outsourcing
Dec 3, 2020 in Research

The process of globalization is commonly viewed as having played a major role in shaping business activities greatly. Outsourcing is one of the business aspects that have been shaped by globalization. Typically, outsourcing entails short-term contracting among organizations or entities seeking to carry out activities on behalf of others at a fee. As already indicated, outsourcing seems to have risen with the rise in the degree of globalization.

Despite many advantages attributable to outsourcing, it should be noted that the nature of outsourcing may not encourage commitment among workers. When firms are delivering outsourced services, employees do not commit fully since they know that such engagements are short-lived. Hence, they are tempted to do the work just for the sake of completion. On the contrary, when an internal department is assigned a task, members of the department assigned the task are under an obligation to perform perfectly since they know that their work will be monitored keenly. However, this argument is contested since outsourcing companies have many options to consider when selecting an outsourcing firm. Hence, leaders of companies that offer outsourcing services are likely to demand quality services from their workers in order to ensure the continuity of their businesses. This is based on the knowledge that poor service delivery would put away both existing and potential clients.

Forbes and Buchanan went further to observe that outsourcing is known to deny companies an opportunity to learn. One of the hallmarks of high performance in organizations is learning. Firms learn through engaging in activities. However, sourcing some services would deny an organization the opportunity to learn on based on service extension. However, proponents of outsourcing argue that organizations are in business to earn a return for shareholders. Hence, any activity that helps increase shareholder value is welcome. In practice, outsourcing is seen as an important avenue for organizations seeking to provide services at reduced prices.

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Research Questions

Research questions are critical in the research process. However, research questions are framed depending on the nature of a study or the objectives that a researcher intends to attain. In this section, research questions: two quantitative and other two qualitative are presented.

The following quantitative research questions are proposed.

What is the relationship between outsourcing and the demand for skilled labor?

What the relationship between outsourcing and the demand for skilled labor?

When quantitative questions are developed, the implication is that the research method is quantitative. It should be noted that the quantitative method is applied when collecting numerical data. This method is deductive in nature and allows a researcher to test hypotheses. Quantitative methods are important in studying cause-effect associations. In a study on outsourcing and globalization, it is possible to employ a descriptive and correlational approach since the approach can allow for computations of correlations on how attributes such as a preference for outsourcing is related with a rise in the demand for skilled labor or a decline in the demand for less-skilled labor.

Investigating the topic may also be done using a qualitative approach. The following qualitative research questions are proposed.

How does outsourcing affect the demand for skilled labor?

To what extent does outsourcing influence the demand for skilled labor?

Just like the quantitative method, the qualitative research method is also useful in the collection of data for analysis. Under the qualitative approach, numerical aspects are not involved. On the contrary, the qualitative approach involves the use of methods such as interviews, discussions, and observations in the process of data collection. The data is then used qualitatively in reflecting on the study population. In such a case, relational aspects are not investigated. In this study, a qualitative study would concentrate on the perceived effects of outsourcing on labor. Hence, in the latter case, I will not be investigating any specific relationship. Similarly, there is no intention to test any hypothesis. Instead, the objective will be to understand how outsourcing is viewed as influencing labor.

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Problem Statement

There is substantial debate on whether globalization has contributed towards the rise in outsourcing. Just like any business approach, outsourcing has its benefits and shortcomings. However, its impact on the fortunes of less-skilled workers is thought to have been adverse as observed by Jones. Thus, the effect that outsourcing has on the labor market is a contentious issue.

From the late 1970s, less-skilled workers earnings have drastically fallen, both in terms of real and relative wages. This fall becomes apparent when comparing the wages of skilled and less-skilled workers. There is a contention whether international trade is associated with the decline in the fortunes of the les-skilled workers. Since outsourcing involves importing given inputs, there is a possibility that it has contributed towards an increase in the demand for skilled workers while contributing to a decline for the demand for less-skilled workers. The same case is attributable to the forces of globalization which have opened the doors for the fragmentation of the production process into separate discrete activities. These activities are, then assigned to different firms in different countries. Despite the widespread preference for outsourcing, as leading firms move to less-costly destinations, few studies have concentrated on the possible effects of such a switch especially on the demand for skilled and less-skilled workers. This study considers how outsourcing affects demand for skilled and unskilled labor.

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The Purpose

The purpose of the study is to explore how globalization has affected outsourcing. In order to attain the goal, the study intends to address various objectives including: how outsourcing affects the demand for skilled labor, secondly, the research will address the issue regarding how outsourcing affects the demand for less-skilled labor. Finally, the research will consider how outsourcing influences wage disparities in various work stations.

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Annotated Bibliography

In the current section, the focus is on major sources that are informative to the study. Five annotations are presented.

According to Biswajit, globalization has resulted in many changes across societies, cultures, economies and polities. Biswajit proceeds to argue that globalization elicits many reactions which if not addressed carefully, chances of negative results increase. In the views of the author, homogenization of globalization is necessary for organizations seeking to make the process work well. Thus, organizations are required to consider adopting outsourcing in view of their existing structures so as to restrict any possible negative consequences.

The book written by Creswell is an important book on research methods. The book explores philosophical and historical underpinnings behind five qualitative research methods. The author contributes significantly towards the understanding of research designs. Other major areas of contribution include data collection and verification of research findings. For the above mentioned reasons, the book is useful for the study.

The article by Forbes and Buchanan contributes towards understanding risks associated with managing organizations amid the changes associated with globalization such as outsourcing. The authors observe that globalization brings risks as well as opportunities. Based on the authors analysis, strategies modeled alongside up-to-date information technology must be adopted to check against threats to organizations when outsourcing.

The book by Jones is a major contribution to the topic under study. The book explores the contributions made by major scholars on the process of globalization. Since the book guides readers on main thinkers, it helps students to understand globalization, and the stream of thoughts surrounding the concept. The book is significant for the following study as it informs the research on how major thinkers have viewed the subject.

Another important article for the study is the one done by Willcocks et al. The article explores the issue of outsourcing and its association with information technology (a hallmark of globalization). As the article demonstrates, there has been limited focus on how outsourcing affects knowledge among organizations. Since knowledge touches on employers and employee, such an article is significant in understanding the association between outsourcing and labor dynamics. In particular, the source provides a useful framework for assessing in-sourcing and outsourcing outcomes within organizations. Hence, this is a significant article for the study.


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