We Have Numbers Of Free Samples

Content

• Question 1: Primary issue in the case study.
• Question 2: Primary stakeholders who is/are affected and how they are affected?
• Question 3: Reason for making off shoring decision.
• Question 4: Why China is the 1st destination for off shoring by the companies.
• Question 5: Alternatives available with companies if they decide not to off shore jobs.
• Question 6: Situation Analysis

Question 1: Primary issue in the case study.

The primary issue of this case is job losses in United States due to off shoring of work to China.

The case has discussed various aspects of off shoring of manufacturing. There are many pros and cons of the same. The major problem which is created by this practice is that due of off shoring of manufacturing to China, many people in America losses their job while this practice may be profitable for the company. This issue is increasing layoffs in companies resulting in increase in unemployment in United States.

Question 2: Primary stakeholders who is/are affected and how they are affected?

The primary stakeholders who are affected by the decision of outsourcing are the employees and workers of the company and the company itself.

The company is able to reduce its cost of manufacturing by means of off shoring their manufacturing which helps them in increasing their margin and hence profits. While on the other hand, off shoring leads to layoff of workers and employees as they are no longer needed in organization. This leads to increase in unemployment and dissatisfaction in employees.

Question 3: Reason for making off shoring decision.

Companies make off shoring decision to increase their profitability and to decrease their cost. This is because the cost of labor in China is less than one sixth of that in China. Also, due to strict business contract, the quality of the goods is maintained with low cost of manufacturing which interests’ businesses. Due to decreased cost and increased margin, companies prefer to offshore their manufacturing.

Question 4: Why China is the 1st destination for off shoring by the companies.

China is the first destination for off shoring which is preferred by the companies because cost of operation is very less in China. The labor is available in China at a very low cost as compared to that in United States. The cost of labor in China is as low as one sixth to that in United States. Usually, quality of goods is an issue in China. But, these companies can ensure the quality of goods from China by strict contract. Due international contract, the Chinese manufacturer makes good quality goods for export purposes. Hence, both the needs of manufacturer of good quality and low cost are met.

Question 5: Alternatives available with companies if they decide not to off shore jobs.

There are many alternatives available with the companies to choose from instead of off shoring jobs and its manufacturing to other countries. These alternatives are:

Economies of Scale: The company can try to achieve economies of scale by increasing its production capacity so that its production cost per unit is optimized. This will help company to increase its gross margin and hence its profits levels. The companies will be able to produce higher amount of goods in eth same cost

Economies of scope: The Company can try to achieve economies of scope where in it will achieve a balanced reduction in cost by manufacturing 2 or more different products. In this way the cost of making these products together will be less that the cost of producing these goods separately. This will also help company to reduce its total production cost and in increasing its margins.

Shared Economy: Shared economy is a concept wherein the companies can share their resources for reducing their overall cost of operation. The companies can share their manufacturing resources, office space, other resources etc which will help them in reducing their cost.

Question 7: Situation Analysis.

1. If I were in the position of a company that must offshore jobs, I would offshore it to China or other Asian country where the cost of production is less and entry barrier for an international company is less. Lower cost of production and low labor cost will help my organization in increasing its profit margin and will help it to grow further.
2. If I were in the position of the employees who might lose their jobs due to off shoring of jobs to other country where cost of production is less, I would try to search for a new job in a company where they have operation in United States only and have no plans to off shore their operation. In the next few months, I will enhance my skill set and will try to move to a job where the risk of off shoring and laying off is negligible.

[Download not found]

Download