Reasons+to+Outsource+and+The+Connection+to+Globalization

What are the driving forces behind outsourcing, and how is this a result of globalization?

some of the key forces behind outsourcing are cheaper labor, better quality, access to resources, expanding company, tax benefit, and capacity management. people can gain cheaper labor by outsourcing,because of a few reasons. the most important ones being that some people might be more willing to work for less than others. also, in some countries. the currency exchange may favor you because your currency might be worth more than theirs. the second reason, better quality is a factor because in some areas, people might be better trained, more talented, or just know the metaphorical ropes. if you have people who know what they're doing, quality will improve. thirdly, a company that outsources would have better access to resources because if the are based in an area where they have a lot of certain things like minerals, and customers, they might outsource to a place that has lots of factorys and laborers, or, if the resources start to run out in one location, the company might outsource to get some more of whatever is running out. a fourth and rather simple reason would be to expand the company. more locations in more areas draws more revenue than a few locations in one area. Fifth, a company might outsource to get tax benefits. a state like Florida has much lower taxes than Pennsylvania so a company might get all of their products made there rather than in the area around their primary retailer. finally, a company might outsource because of capacity management. if a company is limited by the size of a factory, they might outsource to a bigger factory so that they can produce more or different goods and expand their company.

Outsourcing is a result of globalization because people are always looking for a way to make more money. Before globalization, a company had to pay for whatever they wanted locally. this meant they payed whatever the price was that the distributor wanted. When globalization started, it opened up whole new markets for people to buy and sell on, some of them cheaper than others. Eventually, people started to figure this out and worked the system to get the most money out of it. In doing so, they are forced to outsource and get certain goods and some labor done away from their headquarters.