Business Ethics over the Past 30 Years

Running head: OUTSOURCING VS. OFFSHORING 1

Outsourcing vs. Offshoring

Jennifer Fuhrmann

Rasmussen College

Author Note

This paper is being submitted on December 4, 2011 for Juliana Ayaz’s B232/Mar2011 Principles of Marketing course.

OUTSOURCING VS. OFFSHORING 2

Outsourcing vs. Offshoring

Although both terms, outsourcing and offshoring, are sometimes used as one of the same words, they are very different in what they actually mean. Outsourcing has been around for much longer and refers to an organization or company hiring a 3rd party to complete part of the duties or responsibilities of the organization/company. Offshoring refers to having work done in another country where labor or material prices may be less expensive.

Outsourcing and offshoring do have some similar traits to them. They usually both help in saving an organization or company money and they both help bring the most qualified personal in to complete the desired tasks. They do however, differ is some areas as well. Outsourcing is simply finding a 3rd party within the same city, region, or country to hire to get the work done, it offers more labor flexibility, and is able to take advantage of an individual’s specialized skills. Offshoring is having a plant in another country to manufacture a product which usually means a cheaper product, getting work done faster through the use of a global talent pool, and an even better availability of skilled people.

Two local companies that I talked with that outsource certain tasks for their company were Priority Physical Therapy in Wausau and Dollar Tree in Wisconsin Rapids. Priority Physical Therapy outsources their billing. They have hired a woman to work from home to enter all codes used in the billing process and then she sends all the bills off through the clearing house. When payments come through, she...