When does outsourcing, competitive advantages work and not work?
One thing that I don't like about outsourcing manufacturing, services, etc. is the asymmetries involved here:
- The C-level executives with the Board of Directors (~20 people) decides the fate of hundreds, if not thousands. The consumers don't get a big price break, and also, the employees have no say-so in this.
- Another asymmetry is that the jobs can be shipped overseas, but the employees can't. No Americans want to migrate to another nation. The jobs can be shipped far more easily than the American human being. However, the converse is not so true: An Indian or Chinese would gladly come to a developed nation for work, whether it's farming or something more value-added, like service-oriented work at an IT company.
Outsourcing/shipping jobs overseas will not work if: The destination nation has worse worker's rights and environmental safeguards than the corporation's host nation.
Finally, if the cost of outsourcing and all this talk about competitive advantages is true, then why haven't the Americans seen a corresponding drop in prices? The inflation rate is about the same as it was prior to the age of outsourcing! Another words, even though the goods/services are produced much more cheaply, the savings are not passed off to the consumer. Moreover, the former employees also didn't benefit. Only the Shareholders (i.e. C-level executives and Board of Directors) benefited.
Please clarify your thoughts/opinions.