GOD started to look onto alternative ways to cut out costs and improve performance by “offspring’ certain activities in order to present the most appealing value proposition to the potential customers (Offspring at Global Information Systems, Inc). This case examines the issue Of offspring high-tech jobs different perspectives. The topics covered in this case include; consequences of non-competitive offspring, stock price effects of offspring, economic consequences of offshore work for both transmitting and receiving countries, and challenge of investing in a career that is vulnerable to future offspring.
The Competition GOD has several other competitors which are multinational firms and are doing the same thing as they are. Other major firms include Accentuate, Ltd. , Electronic Data Systems Corp.. , Siemens, Computer Sciences Corp.. , and Petrol Systems just to name a few. But the significant competition to all businesses is offspring to different parts of the world. All of these companies are looking to control the market, reduce costs, and make savings. The competition is very competitive. If so many other companies are doing the same thing how can one company stand out and attract customers to buy room them.
In this case the location comes into the picture and where it is cheaper to find skilled people and cheap labor. Many of these workers in the developing world especially in China and India who are as well educated as workers in the developed world but the desire to work for only minimum wage pay. As it started with the manufacturing industry, the jobs went to companies headquartered offshore which customers bought products from offshore companies, then the U. S companies went out of business. As it did with service sector and highly advanced jobs followed on afterwards.
From he business perspective side it created a “win-win” situation for both the “job transferor and the “job transferee”. As the unemployed lost their jobs to imports were reemployed between January 1 999 and December 2002. By doing their business offshore they were not losing customer but instead becoming stronger by lowering costs. Challenges and Opportunities GOD was faced with several difficult business decisions. The influence of offspring in the IIS economy would impact; unemployment, jobs migrating abroad, and reduced income of the re-employed. The only thing which mattered was to save money and make a profit.
The calculated yearly profit of replacing jobs here in the United States would be $1 68 million dollars. Long terms gains would consist of; lower commodity prices, comparative advantage in higher skill workers, and upgrade in technology oriented economy. As with everything else nothing happens instantly. It takes time for workers to be re-trained for new job and company to emerge. As comparative advantage takes a shift of thing it is not static and is changing with advancing technology. Risk and Reward The people in the United States would suffer due to offspring business aging off to different parts of the world.
It would result in job losses, higher unemployment rates, and reduced income. Since GIS is gaining from offspring because of lower wages, it will also be more profitable. Company’s net cost savings of $40 million in 2005 and by 2006 there will be a net cost savings of $168 million. Due to employing programmer at a lower wage salary. Recommendation and Conclusion As business changes over time so does technology which plays a big part how corporations go about their business. It takes time to analyze a decision like his one especially the one which involves people losing jobs due to business going to offspring globally.