News & Events

MENDOZA IN THE NEWS

Outsourcing is seen as positive

by ANDREW SOUKUP, South Bend Tribune
Publication: South Bend Tribune

September 2, 2004


Yet more needs to be done to assist individuals affected, panel says.
SOUTH BEND -- In an election year, words like "outsourcing" and "offshoring" are demonized as politicians pander for votes.

But a panel of four University of Notre Dame professors agreed that sending jobs to other locations -- either domestic or overseas -- has long-term benefits for society as long as companies pay enough attention to the human issues associated with outsourcing.

Roughly 300 people, mostly students, attended the discussion, which was part of the Cardinal O'Hara Lecture Series in Business Ethics at the university's Mendoza College of Business on Wednesday. They heard a group of professors provide a broad overview of an issue they acknowledge is highly politicized.

However, the professors hope that elected leaders "will look toward the long term and not have a knee-jerk reaction," said Patrick Murphy, a marketing professor.

Outsourcing is inherently a process of specialization, where one company might ask another to take on tasks because, as management professor Lee Krajewski said, "the other guys can do it better."

The challenge for Americans is to ensure that the United States maintains its edge in education and innovation -- areas that Murphy suggested are the United States' areas of specialization.

Krajewski said businesses will consider sending jobs to other locations for a series of reasons, including reductions in labor and logistics costs, lower tariffs and taxes and less restrictive labor laws.

Finance professor Jeffrey Bergstrand disputed the notion that outsourcing had a profound impact on jobs, saying that the unemployment rate has remained at the same level since the 1960s while international trade has quadrupled.

"If there is a loss of jobs," Bergstrand said, "we should find a rising unemployment."