Corporate Outsourcing - Balance of Term Paper

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In other words, on a balance sheet, outsourcing often makes sense. Take the following example of a study of one hundred domestically run company, where "on average," it cost an accounts payable department $16.54 to process a vendor payment," meaning that it cost the company "probably $10.50 - $11.00" to collect payment while using internal company labor on a permanent basis. (Cass, 2005) By out sourcing collection to a cheaper foreign or domestic firm, the original firm could save a great deal using workers in this relatively unobtrusive and mechanical capacity.

However, highly publicized, extensive use of outsourcing is not always so hidden -- for example when troubleshooting staff at a computer company may be technically literate, but not technically or colloquially fluent with the English language of most of the users of a 'help line.' Exploitation of local labor in poorer nations of Asia and Africa has incurred negative publicity for many factory-based companies as well. Even when popular in the nations themselves, American ire may be arisen during times of economic difficulty and again create negative press.

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The use of domestic outsourcing may seem like a compromise, and have slightly less controversy attached to its use, but still, a balance must be struck as even this form of outsourcing can cut into corporate loyalty of permanent staff, especially if the outsourced staff do not subscribe to the corporate ethos of the base staff, or if they are temporary rather than permanent employees. Media perception, affect on consumer's buying power, and affect on corporate morale must all be taken into consideration when evaluating the pros and cons of outsourcing, even when it makes financial sense.

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