Reuben, would you do us a favour and burst out a quick rendition of Rule Britannia while you’re up on your soapbox?
Loyalty! Pride! Responsiblity! Britain expects every company to do its duty, by Jingo!
You seem to think that a national sports team and a business are somehow analogous. I must respectfully suggest that this comparison is chalk and cheese, to the extent that it’s complete bollocks.
I’m starting to wonder if you fell asleep in the victorian era and just woke up. That bank whose call centre you berate is a multinational, operating in 3 continents and owned by people around the globe. Just who are its “fellow citizens”?
Or is it small businesses you were referring to in your oratory? Let me try to explain this, step by step.[ol][]Profitable small businesses are a good thing for a country. They help to bring money into the country, and they pay corporation tax.[]Bankrupt small businesses are not a good thing. They do not pay tax. They do not improve the balance of trade. They do not employ people.[]If a company is to be profitable, it must be competitive. To be competitive, they must reduce costs. Outsourcing work to cheaper countries is one way of doing this.[]Conclusion. Idiotic protectionist ideas that hiring local staff is always the best thing for the country a company works in are blatant nonsense.[/ol]
Gary, do you get off on being offensive or something? It’s true that I rate old-fashioned notions of national pride, civic duty and so on, pretty highly, and these ideas existed a hell of a long time before - and after - the Victorian age. Just because you feel differently about things is no justification for your behaving like a complete prat towards me.
As to your little list of truisms (and your slightly non sequitur ‘conclusion’) the notion that “Profitable Small Businesses = Good” isn’t in dispute. I agree with it, and so does everybody else. But you’re deliberately omitting “Large Increase In Unemployment = Bad” which is equally true and self-evident.
Restating the bloody obvious isn’t getting anyone anywhere anyway.
Sailor, if it were a matter of companies offshoring to survive, I would have far less problem with this than I do.
The large companies I am thinking about - banks, building societies, software houses, etc, etc - are invariably intensely profitable already, and are sacking Western staff by the thousand not to survive, but merely to turn an n billion dollar profit into an n+1 billion dollar profit.
Survival is not the issue here; it’s more the case that we’re debating the acceptable social cost of a company’s pursuit of a bit of extra profit. My own opinion is that offshoring as it is currently being practiced has too high a cost to be allowed a free rein.
I’m not naturally in favour of economic protectionism, or even unionisation for that matter, but if we’re going to let corporations do whatever they please, and damn the consequences, what other weapons are there?
Reuben, so far the terms you’ve used to describe those who disagree with you include monumentally blind, reactionary , idiot, blinkered, stereotyped and “racist?”. You’ll excuse me if I find your accusation of offensiveness laughably hypocritical.
How best to say this? Oh yes. Stop being a sanctimonious prick. You’ve got a stupid argument, and you try to wrap it in noble terms such as pride, loyalty and so on. How very admirable. Strangely enough I value civic duty, pride, loyalty and other such traits highly myself. Highly enough that I don’t just pull them out as buzzwords when my argument is getting kicked apart. I’ve just shown to you how your protectionist business practices are blatantly bad as long term policies. As you continue to ignore this, clearly you’re disloyal, unpatriotic, have no sense of civic pride, blah blah blah.
Well spotted, sherlock. Now please explain who’s more likely to be hiring staff - a profitable UK based company that outsources its dev work, or a bust UK based company that didn’t. Just because a company moves one particular department out of the country, it just creates a need for other staff within the company. I outsource my dev team to India, I need more analysts in the UK to manage work and liase with clients. I save money and improve my delivery cycle, so now need more marketing staff. My network is more complicated, so I need more systems staff. It’s a far more sustainable, healthy organisation, and one that’s going to create a lot more jobs and wealth for the country.
I’ve asked this on a number of occasions, but I’ll ask again. Just which nation do you think multinational companies owe their loyalty to? I can’t think of a single example of a large company in the industries you name that doesn’t operate in many countries, and have owners from many countries. Or is it ok if it’s “western staff”?
I think we can all agree on this. However, protectionist proposals will not reduce unemployment, but merely shift it into the future at the expense of losing an entire domestic industry as British businesses either go bust due to the extra cost of workers, or move offshore to take advantage of the savings available in other countries.
Of course, you could always follow up your employment protection with import tariffs on the affected industry’s products, which in effect means that you’re asking the public to pay for the continued existence of uneconomic jobs, reducing the economic efficiency of the country as a whole and making consumer goods more expensive into the bargain. Great.
Just to add some facts about public companies and their owners:
[ul]
[li] The owner of the companies are the stockholders. Managements duty is to increase shareholder value. Many companies are way off their highs, and management must find new ways to regain previous levels.[/li][li] Public companies are compared to previous results. If ABC made $0.10 per share last year, it has to do better this year if it wants to increase its share value. Plus, it has to show that it can continue to generate and grow profits into the future. If it settles for making $0.10, it will lose share value over time, and thus management will fail in its duties to its owners.[/li][li] I purposely measured earnings per share. If ABC had 100,000 shares outstanding and earned $100,000 last year, and this year it issued 100,000 more shares at the beginning of the year and earned $150,000, it actually had negative growth for the shareholders.[/li][li] Markets, like politicians, are too short-term in their thinking and there is a herd mentality. Shareholders may press ABC for quick cost-savings through outsourcing even though it might not be the best long term decision, just because DEF is doing it for the right reasons.[/li][li] Having said that the markets aren’t always rational, management cannot always defy shareholder wishes if they deem them wrong in the long-term. Not every company is Microsoft where what Bill Gates says, goes. Management does not always own a controlling stake.[/li][/ul]
Capitalism has been exported. The competitive edge of the West is currently innovation and r&d. As products mature, we cannot compete with low-cost producers. What this means is that un- and semi-skilled workers are not needed in large quantities here, and should consider either getting new skills (innovating) or migrating to the work. Billions have migrated westward, into Europe and the US. The West should knock the chip off its collective shoulder and realize that the movement can work two ways.
As yojimbo alluded to earlier, there is of course an irony in all this: that the US have devoted much of their foreign policy in the last 50 years to making sure that this exact state of affairs should come about. These problems didn’t exist so much when half the world was behind an iron curtain, neh?
And FTR, shareholders include any of you that have a pension scheme or any kind of life or investment policy. It benefits none of you when a big company loses money; witness the Enron debacle for an extreme example.
Furthermore, management do not just have a moral duty but also a legal one to maximise their shareholder value. If they make a decision out of ethical reasons that screws up that value, they could find themselves on the end of a class action shareholder suit tout suite.
Don’t “ethical” companies (I’m thinking specifically of the Co-operative Bank in the UK) justify their actions by attaching a dollar value to the goodwill generated by their policies? There’s certainly a marketability in ethical banking in particular and there’s no particular reason I can think of why voluntary domestic support could not be viewed similarly. I think it’d be a stretch, though, given that the mental link between ones savings in a bank and what those savings are used for is considerably stronger than that between your cash and the person who programmed the TCP stack that sits on your PDA.
Gary, you haven’t “kicked apart” anything and you have shown me nothing but your opinion and a few simplistic economic assertions, all delivered in a petulant and confrontational manner more suited to the playground.
Since there are hundreds of unemployed British programmers, who are more than capable of doing your work, your choice to use Indian ones instead says very clearly that you regard our national unemployment as nothing to do with you. This does not suggest a sense of civic duty to me. Quite the opposite in fact.
And since you have obviously outsourced one of your main functions, that must make you little more than dead-weight middle management. I look forward to the day the Indian engineers meet your clients and your business goes pop. What goes around comes around and all that.
All of them, but I’d say it depends entirely on the nature of the work being performed. If you’re working in a Moldovan office, as part of and providing services to, the Moldovan economy, then you should for preference only hire Moldovan staff. If your head office is in Ethiopia and a hundred other branches elsewhere around the globe, that’s got nothing to do with the function of your local office. It depends where the work actually is, and whether there is local talent that can do it.
Outsourcing ain’t always all its cracked up to be. My current company has tried to outsource portions of development three times, and each time has ended up with a Big Pile 'o Crap which turned out to be unusable for the purpose for which it was intended. Each time we ended up developing the damned stuff ourselves (and wished we’d done that from the start). Managing development between different groups working on the same project is hard. Doubly so cross-country and cross-timezone. My prediction is that a lot of these jobs will eventually come back where they started, when management realises they’re not saving as much as they thought they were.
On the other hand, if a company finds it can do better by employing someone in India rather than the US (or Australia) then good for them. Indian people deserve jobs too. If we had as many Indian people on this board as US citizens we’d be getting a VERY different set of opinions as to whether the current trend was a good thing or not.
On the other other hand, Waverley’s point about working conditions in other countries is a good one. I don’t care so much about IP law (mostly because I’m pretty sure that whatever skewing of the playing field exists, is in favour of developed countries) but in other fields like manufacturing I’m not that happy to think that my money is supporting practises that would be disallowed here (like low safety standards, or the use of prison labour in countries where they have political prisoners)
There is nothing intrinsically wrong in giving a job to a person in another country for a fair wage, whether or not a “fair wage” there is the same as a “fair wage” in your own country
Surely then the logical conclusion to this is that no country anywhere has any exports or imports whatsoever.
The Moldovan plant manufactures for the Moldovan needs and cannot import any goods from anywhere else because Moldovans should be able to make whatever it is for themselves.
These same Moldovans then should only make whatever they need for themselves and not export any of their goods because the non-Moldovans in non-Moldovanland should also be self sufficient and have no need of the Moldovan excess.
I can’t see it myself, but as I said earlier, for the purposes of this discussion, I am an Indian.
I also take issue with the notion that the Moldovan office in your example can hire for preference onlyMoldovans. That is a whole new thread where words like racist and sectarian would be thrown around, so I’m not going to start it.
Curly chick, that’s not what I’m saying, but I’m sure the fault is in my clumsy expression. Let me try again. My point is that the Moldovan plant is free to export goods/services to whoever it likes, but if it’s doing that from within Moldova - enjoying all the benefits of that etc - then it should employ (again, for preference only) the Moldovan people in the production of said goods/services.
Note that word ‘preference’ : this isn’t really something I’d like to see become enshrined in law, it’s more how I hope people would behave by default.
Here’s an interesting article posted on Slashdot today :
Apparently India’s started losing out to some even cheaper places. Who will win this race to the bottom? And assuming the company being quoted is reputable, American geeks might like to note this jaw-dropper from the above :
Yes, yes, very good. I don’t hire british programmers, so I’m clearly not patriotic or something. I’ve already outlined reasons for outsourcing, knock on effects of extra hiring in other departments, benefits to country of revenue - but your whole fucking argument comes down to a lack of civic duty, british spunk, or some other fucking idiotic attempt to claim a moral high ground. Tell me, are you actually playing devils advocate to make this easy for me, or are you really this dim?
Well let’s see. Two of our indian staff are in Houston just now, working with ExxonMobil, but they first met about two years ago so do let us know when that pop may come along. Oh, and I’ve also got 4 Indonesian programmers over here just now, to meet up with some of our UK staff and customers. Come to think of it, most of the programmers deal directly with customers during projects - it does rather help to answer questions on how an app needs to perform, or such like. Please advise just how soon I can expect this “goes around” cycle to take. Or were you just talking completely out of your arse?
Oh, and as one of the owners and founders I prefer to be criticised as dead-weight upper management. The dead-weight middle management is down the hall, past the coffee machine, opposite the dead weight janitorial department.
You really are a visionary for business practices, aren’t you? Your idea of business efficiency is for each local office to have duplicated departments, thus avoiding any form of cost saving through economy of scale or excess capacity. So my Moldovan branch has - to use your earlier example - a call centre, my ethiopian branch a call centre, my Angolan branch a call centre, so on and so forth.
And then, when my rivals undercut me at every tender, as they don’t have these duplicated costs, I’m sure that shareholders and staff will be comforted by the fact that our wilful inefficiency was all setup with the very best of intentions. Just a shame about the mass redundancies when the firm goes bust, but such is the cost of loyalty, civic duty, etc.