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The Economic Analysis: Outsourced (2006) Essay

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International economic theory behind the theme of the movie.

International economic theory, based on the idea of comparative advantage related to economic globalization and dependent on using Business Process Outsourcing, is reflected in the movie Outsourced (2006), directed by John Jeffcoat.

The factor moving from source country to host country.

The factor that moves from the source country to the host one is the labor or human resources.

The winners and losers in this movie.

It is possible to identify the winners in losers in the movie Outsourced with references to the economic benefits received by different groups of people involved in the business. Thus, the winners are the leaders and employees of the company located in the host country because they can declare the rules for the business’s development and decide what countries to choose for outsourcing.

Furthermore, their income increases depending on the work of the employees in the source country. The losers in the movie are the Indian human resources because their gains depend on the decisions of the company’s leaders, and these employees are fired when the company’s leaders decide to choose China for outsourcing.

Referring to the welfare analysis models, it is important to note that only the company leaders in the United States can benefit from the income distribution because they receive low-cost services of the appropriate quality to attract more consumers and increase their profits.

They are also the winners according to the factor of the efficiency between production and consumption because the Indian market provides opportunities not only for gaining human resources but also for gaining more potential customers.

Importing cheap labor, the United States company focuses on creating a significant comparative advantage while selling services for higher prices. The idea of rewarding employees with the company’s products contributes to the potential expansion of the market.

According to the welfare analysis model, the Indian employees are the losers because they experience all the negative results of unequal income distribution and inappropriate efficiency between production and consumption.

Why does the host country participate in this game?

The host country orients to outsourcing because the company can minimize the costs of rewarding employees and expand the market.

Opportunities and threats the company faced in the host country.

The company’s opportunities in the host country include achieving a stable position within the market and meeting customers’ needs and expectations. The threats include high costs for human resources, material resources, and services, intensive competitiveness within the industry, and the necessity of decreasing product and service prices.

Predictions for the future of the source country in the short term.

It is possible to predict the decrease in the host country’s interest in the source country because of the focus on finding new markets, and the economic decline connected with the high unemployment rate can be observed.

Two positive consequences and two negative consequences attached to global business trade.

The positive consequences of the global business trade are (1) building the expanded global market with a lot of opportunities for employing people in different countries and (2) intensifying the strong economic connections between the developed and developing countries to improve the state of the low-income populations and undeveloped economies.

The negative consequences of global business trade are (1) the possible exploitation of human resources from the source countries and (2) the possible domination of the host countries within the source countries’ markets.

The policies a source country can employ to minimize outsourcing.

To minimize outsourcing, a source country can state the wage standards for employees and a list of conditions that should be realized in the source country.

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