The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Nandkishor Battinwar, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur.
Thin line between Patriotism and Jingoism
Leadership must be likable, affable, cordial and most importantly above all emotions.
…..Vicente del Bosque
In the 21st century where people are fighting for freedom of speech and woman empowerment Mr. Donald Trump’s challenging the fundamentals of the free market. Recently Mr. Trump’s warning to CEOs of slamming huge border tax is a conspicuous example.
The whole world was taken aback when Mr. Donald Trump won the presidential election. America is the world power because of its military dominance, innovation, prosperity and higher standards of living but currently America is facing a big problem of unemployment. Mr. Donald trump tapped on this issue in his election campaign and he succeeded in provoking the Americans to vote for him.
Admirable public image, Plain spoken, calm composure, rational thinking and good knowledge of economics these are some of the desired qualities of a presidential candidate but Mr. Donald trump lacks in many of them. Even before release of 2005 video in which he shamelessly boasted about assaulting women and passed derogatory comments. His Ex-wife accused him of misbehaving and assaulting her. Well! It’s a mystery why people voted for him.
There is a thin line between Patriotism and Jingoism, fundamentals of Economics are capable of differentiating it. Employment cannot be generated by threatening the organizations to recruit the local people. Instead, the government should implement policies to improve the skill set of people so that organizations will naturally start recruiting from the local talent pool. Mr. Donald Trump warned CEO of companies to recruit from the local people and expand within the country or else He would slap the company by heavy border taxes. This is the right time for the industrialist to express their concerns over it instead of becoming mute spectator or else the day is not far when this authoritarian will ask the organizations to dance on his tone.
Outsourcing helps firms in converting fixed cost into variable expenses. Studies indicate that short-term price savings continue to be a predominant reason for both offshore and domestic outsourcing (Corbett, 2005 and Doig et al., 2001). Outsourcing also has long-term benefits and strategic implications. Outsourcing decisions clearly affect a firm’s cost structures, but may also affect the long-term competitive situation and alter the nature of risks that the firm must manage ( Lisa M. Ellram, Wendy L. Tate 2007)
Offshore outsourcing presents many opportunities that are not available domestically. For example, abundant labors at lower cost availability in china led to industrial evolution. Decades after decades China grew around 10% a year. Simply, there is much more to outsourcing than simply saving money. Offshore outsourcing creates both new opportunities and often unrecognized hazards, which may limit a firm’s prospects (Lisa M. Ellram a, Wendy L. Tate b).
The long-term costs of these unanticipated consequences can greatly overshadow the potential cost savings. As such, careful consideration should be given to outsourcing decisions including all of the potential long-term consequences. It is no wonder that there has been a call for more research on offshore outsourcing of services (Roth and Menor, 2003).
Americans cannot do anything now but can wish that Mr. President will think rationally and take decisions wisely.
Business process outsourcing; Professional services; Transaction costs; Case studies; Service purchasing; Offshoring , Lisa M. Ellram a, Wendy L. Tate b , Corey Billington
A content structure of the off-shoring process of the world economy from the perspective of a level approach., PUZAKOVA, Evgeniya P.; SHEPEĽ, Taťyana