Wipro case...q1

Wipro case...q1 - them to enter in Indian market which is a...

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Q.1. How did outsourcing work to Wipro improve GE’s ability to compete in the global economy? Does such outsourcing harm or benefit the American economy? Ans: Outsourcing is a very popular term now a day in global business. Outsourcing is ‘when one company contracts with another company to perform certain functions including manufacturing and back office operations.’ When outsourcing is conducted in another country, it is called offshoring. General Electric did the same with Wipro. GE got to know that India has a great pool of newly graduated software engineers who are pretty efficient but still agree to work under a lower wage rate. Also GE used India for data entry, processing credit card applications and other clerical tasks that could be performed over internet. So this outsourcing helped Wipro to save $300 million a year. Also outsourcing helped
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Unformatted text preview: them to enter in Indian market which is a big consumer market for GE. It helped them grow and become big. Such outsourcing cause both benefits and harms to the American economy. In one side, it provides the companies with an opportunity of lowering its cost and thus having a growth. It also helps many companies to actually survive. High level jobs are being created, e.g. managerial jobs. Moreover, in a dynamic economy like US economy, job shifting is pretty common. So ultimately, it is seen that people get jobs even if they get fired. On the other hand, outsourcing is creating high value jobs, but still the people who actually get fired because of outsourcing, e.g. the labors, do not have the capacity to attain those jobs. So they remain unemployed....
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This note was uploaded on 03/23/2011 for the course BUSINESS bus 173 taught by Professor Rtm during the Spring '11 term at IUP.

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