Outsourcing and Off-shoring

Paper Summary:

The paper explains that Armstrong Holdings could not remain competitive for very long if it did not offshore some or all of its manufacturing. The paper then also points out the risks involved with such a strategy and warns that Armstrong must be diligent in not exporting proprietary knowledge or techniques or it risks being undermined by foreign competitors who acquire its intelligence.

Outline:
Overview
Offshoring/Outsourcing & Globalization
Effects of Global Outsourcing & Off-shoring
Conclusion

From the Paper:

"Outsourcing, and its sister strategy of off-shoring, are by-products of globalization and the U.S. market has been deeply impacted by globalization. Armstrong Holdings (Armstrong) itself utilizes offshoring strategies since it has long maintained a manufacturing facility in Mexico. The U.S. economy has been one of the global economy's hardest hit by some of the side-effects of globalization: outsourcing and off-shoring. Outsourcing or the contracting out of functions previously handled in-house, and off-shoring, which is the use of overseas firms to provide a product or service previously handled nationally, both contribute to shrinkage of jobs and manufacturing (Globalization, 2005, p.1). Armstrong, in order to maintain its competitive edge, like most other companies availing themselves of these strategies, is merely taking advantage of a market strategy."

Sample of Sources Used:

• "Friedman, Thomas L. (2000). The Lexus and the Olive Tree. New York: Farrar, Straus and Giroux.
• Globalization: Threat or opportunity for the U.S. economy. (2004). FRBSF Economic Letter 2004-12, 1.
• Marks, J. (2004). The outcry over outsourcing: A debate rages throughout state capitols over the loss of American jobs to foreign countries. State Legislatures May, 30+.
• Mears, J. (2005). Study: Outsourcing losing luster. Network World, 22/16, p.10.
• Trade's bounty. (2004). The Economist 373/8407, 80.

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• Research Paper # 93248 : "Off-Shoring and Staff Augmentation"

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