Sending Jobs Overseas
France Griggs Sloat
The evidence was piling up: Companies were calling for advice. Newspapers editorialized about it. Presidential candidates were making it a campaign issue.
The topic of concern: offshoring and outsourcing, business practices with histories tracing back more than 30 years, but with a heightened impact now as businesses become more global, the economy weakens and more white collar and professional jobs are lost.
Offshoring—when a company hires foreign workers to do the same jobs at lower wages—and outsourcing—when a company contracts with a foreign company to provide a service—are now major issues, even in the academic world. M.B.A. students now ask why they lost their jobs or wonder if the jobs they want will be there when they graduate.
Raghu Tadepalli and Jamal Rashed, professors of international business in the Williams College of Business, wanted to address the subject in their classes. But when several high-level corporate managers declined invitations to talk on the highly sensitive subject, they knew they had to do something. “They were so concerned about the public relations aspect of this subject because the companies doing it were being labeled un-American and anti-American,” says Tadepalli, associate dean of the college. “One person said, ‘If I talk about this, then word would get out, and I’d rather just not.’ ”
Tadepalli and Rashed quickly put together a six-week course for M.B.A. students and offered it in May and June. Thirteen students signed up.
“It was an important topic to deal with in a timely fashion,” Rashed says. “We felt Xavier should be a pioneer in offering courses relevant to the business community.”
Massachusetts Institute of Technology offered the first course on offshoring this spring, Rashed says. But Xavier is the first school in the Cincinnati area to offer the course and is believed to be the first in the Midwest, both say. The course will be offered again in the spring or summer of 2005.
With no textbooks on the subject, the two professors spent hours creating the course-planning topics, deciding on lectures, locating materials and incorporating a software program.
“We wanted to offer a course very objective in nature,” Rashed says. “We wanted to give our students the skills to make decisions and to evaluate the justifiability of making such a decision.”
The course, titled Offshoring Issues in International Business, looks at all aspects of offshoring and outsourcing, including the ethical issues associated with giving American jobs to foreign workers. It addresses America’s place in the global economy and the fact the United States has lost 2.5 million jobs to other countries, initially blue-collar factory jobs but increasingly white-collar office and higher paid professional positions. It looks at the effects of the trend on the U.S. economy and whether globalized production is inevitable.
Topics covered in lectures include the global job shift and politics, terrorism, offshore outsourcing of information technology and human resources positions, and offshoring’s next wave.
“When I started the course, I saw it as a necessary evil where companies can save money, and so they’ll do it despite the human cost,” says M.B.A student Charles Murphy, national sales manager for a power equipment manufacturer in Harrison, Ohio. The company has outsourced some of its manufacturing but has kept its headquarters in the town where it was founded in 1860. Murphy finished the course with a new view of offshoring and outsourcing as good for the global economy and vital for some companies’ survival. But employees must be kept informed and offered options for retraining and reemployment, he says.
The human cost can be devastating, especially for older workers who must learn new skills for new jobs. But now there are examples of the trend beginning to reverse as companies that profited by sending jobs overseas are creating new jobs in the U.S., such as GE Aircraft Engines. Other companies, stung by the high turnover rate of Indian workers, have pulled positions back to the states.
“We’re not for or against it, but it’s happening, and as academics, we need to know why it’s happening and to teach it to our students,” Tadepalli says. M.B.A. students often changed their views by the end of the course. “You could see a sea change in their attitude,” he says.