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Devry BUSN427 Week 2 Case Study




Question;Case;Analysis: Chapter 5, Question 6 (a, b, and c), pages 194 and 176.;Your responses should be well-rounded;and analytical and should not just provide a conclusion or an opinion without;explaining the reason for the choice. For full credit, you need to use the;material from the week's lectures, text, and/or discussions when responding to;the questions. It is important that you incorporate the question into your;response (i.e., summarize the case in the Summary) and explain the principle(s);or concept(s) from the text that underlies your judgment. For each case, you;should provide at least two references in APA format (in-text citations and;references as described in detail in the Syllabus). Each answer should be;double-spaced in 12 point.;Use the following headings and;lengths in your paper;1. Summary;a. In this section;you should summarize the case in one paragraph.;2. Questions;a. Number each;question. Each specific question under the numbered Case Discussion Questions;should be a paragraph in length because many Case Discussion Questions contain;more than one question.;Be sure to restate each question before answering it.;b. Apply the concepts;from the appropriate chapters in your answers.;3. References;a. Include citations;throughout the paper and a reference page with your sources. Use APA style;citations and references.;Reread the Country Focus ?Moving U.S. White-Collar Jobs;Offshore.?;Moving U.S. White-Collar Jobs Offshore;Economists have long argued that free trade;produces gains for all countries that participate in a free trading system, but;as the next wave of globalization sweeps through the U.S. economy, many people;are wondering if this is true, particularly those who stand to lose their jobs;because of this wave of globalization. In the popular imagination for much of;the past quarter century, free trade was associated with the movement of;low-skill, blue-collar manufacturing jobs out of rich countries such as the;United States and toward low-wage countries?textiles to Costa Rica, athletic;shoes to the Philippines, steel to Brazil, electronic products to Malaysia, and;so on. While many observers bemoaned the ?hollowing out? of U.S. manufacturing;economists stated that high-skilled and high-wage white-collar jobs associated;with the knowledge-based economy would stay in the United States. Computers;might be assembled in Malaysia, so the argument went, but they would continue;to be designed in Silicon Valley by high-skilled U.S. engineers.;Recent developments have some people questioning;this assumption. As the global economy slowed after 2000 and corporate profits;fell, many American companies responded by moving white-collar;?knowledge-based? jobs to developing nations where they could be performed for;a fraction of the cost. During the long economic boom of the 1990s, Bank of;America had to compete with other organizations for the scarce talents of;information technology specialists, driving annual salaries to more than;$100,000. However, with business under pressure, the bank cut nearly 5,000 jobs;from its 25,000-strong U.S.-based IT workforce. Some of these jobs were;transferred to India, where work that costs $100 an hour in the United States;can be done for $20 an hour.;One beneficiary of Bank of America?s downsizing is;Infosys Technologies Ltd., a Bangalore, India, information technology firm;where 250 engineers now develop IT applications for the bank. Other Infosys;employees are busy processing home loan applications for Greenpoint Mortgage of;Novato, California. Nearby in the offices of another Indian firm, Wipro Ltd.;five radiologists interpret 30 CT scans a day for Massachusetts General;Hospital that are sent over the Internet. At yet another Bangalore business;engineers earn $10,000 a year designing leading-edge semiconductor chips for;Texas Instruments. Nor is India the only beneficiary of these changes.;Accenture, a large U.S. management consulting and information technology firm;moved 5,000 jobs in software development and accounting to the Philippines.;Also in the Philippines, Procter & Gamble employs 650 professionals who;prepare the company?s global tax returns. The work used to be done in the;United States, but now it is done in Manila, with just final submission to local;tax authorities in the United States and other countries handled locally.;Some architectural work also is being outsourced;to lower-cost locations. Fluor Corp., a Texas-based construction company;employs some 1,200 engineers and draftsmen in the Philippines, Poland, and;India to turn layouts of industrial facilities into detailed specifications.;For a Saudi Arabian chemical plant Fluor is designing, 200 young engineers;based in the Philippines earning less than $3,000 a year collaborate in real;time over the Internet with elite U.S. and British engineers who make up to;$90,000 a year. Why does Fluor do this? According to the company, the answer is;simple. Doing so reduces the prices of a project by 15 percent, giving the;company a cost-based competitive advantage in the global market for;construction design.;Sources: P. Engardio, A. Bernstein, and M.;Kripalani, ?Is Your Job Next?? BusinessWeek, February 3, 2003, pp. 50?60;?America?s Pain, India?s Gain,? The Economist, January 11, 2003, p. 57, and M.;Schroeder and T. Aeppel, ?Skilled Workers Mount Opposition to Free Trade;Swaying Politicians,? The Wall Street Journal, October 10, 2003, pp. A1, A11.;a. Who benefits from the outsourcing of skilled white-collar;jobs to developing nations? Who are the losers?;b. Will developing nations like the United States suffer;from the loss of high-skilled and high-paying jobs?;c. Is there a difference between the transference of;high-paying white-collar jobs, such as computer programming and accounting, to;developing nations and low-paying blue-collar jobs? If so, what is the;difference, and should government do anything to stop the flow of white-collar;jobs out of the country to countries such as India?


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