America Outsourcing

Outsourcing has been a subject of debate in the worlds actual countries with questions on whether it should be regulated. This follows the effect that outsourcing has had on the economies of host countries. Top in the agenda is the loss of jobs to outsourcing which has led to income inequality and joblessness in the host countries.The advantages of outsourcing yet remain significant in these economies earning large amounts of revenue. To illustrate this facts, the case of general Electric will be used to analyze the role that outsourcing has play in the U. S economy.Impact of outsourcing on GE and their decision to have nine-fold outsourcing partnerships.General Electric (GE) has placed strong emphasis on ballooning their business to supranational market places with outsourcing which has non only provided the company with huge revenues but in addition given it a strong command as the biggest company in the world by market specialization in 2004.Its international forepart wh ich has proved to be very powerful has given GE a competitive edge over other companies in the U.S which have not outsourced as expansively as it has. GE has benefited from the profit of cheap man harming capital available to it in Asia, Mexico, India, China and other countries in which it ventured into.GE which specializes principally in financial services, medical equipments, jet engines, plastic manufacture among others cannot at ane time regret the decision to outsource to these countries as a result of the gains they have obtained. In India for example, the GE benefited from the large group of improve English speaking locals who provided inexpensive labor for the company.It is estimated that with two to four eld experience a computer programmer in the US pull in $62,000 while the same person earned $10,000 only in India.These cut back costs have fostered savings for the company giving it room to expand its activities even more. GE now boasts of its presence in over one hundred countries. Of the total revenue that GE earned in 2003, 45% came from the international markets which goes on to show that outsourcing has had a positive impact on the company.The company apart from benefiting in cheap labor imported materials from its headquarters country, processed it in the subsidiaries and then sent it back to the country. The effect of this is that the achievement costs were reduced and the products were sold t the same price. The contrary countries excessively provided market for the products as well as supply of cheap and available materials.The decision for GE to have multiple outsourcing partnerships can mostly be attributed to the gains in cost cutting it was bound to benefit from such kind of arrangements. Consider that GE earns 45% of its revenue from foreign subsidiaries. This is the major suit for GE to continue outsourcing to maintain a significant flow in its revenues.As stated earlier, GE stands to obtain numerous advantages from inves ting in the foreign countries through outsourcing. It comes in as the nature of business to take advantage of available resources and making the maximum use of them to obtain maximum benefits.GE through outsourcing has established international partnership and it stands to gain a lot in terms of profits and reduction of costs. In the case of Mexico, the government provided for transaction free import of raw materials, testing equipment, telecommunication equipments, tools and machinery. This was aimed at increase foreign direct investment of the country which would in turn benefit from the improvement in infrastructure ad an increased job market for its citizens Warden, S. (2002 124-133).GE was hardly affected by the income tax law which also provided for refunds on money used to export products by GE from Mexico to U.S (Vietor, 2007 4). As a result of the huge savings made, the company advanced at a high rate establishing many plants in Mexico producing electronic motors, capacito rs and lighting devices.