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Jakarta Post

What’s wrong with outsourcing?

  • Gede Arya Wiryana

Canberra   /   Mon, October 8 2012   /  09:49 am

The negative impacts of outsourcing on Indonesian workers have been widely debated in the last decade. It is an important issue because it is related to the wealth and future of the workers, which was clearly the message of the latest mass rally against outsourcing staged in a number of industrial regions across the country.Generally, outsourcing is defined by Beaumont and Sohal (2004) as the possibility of using external resources to conduct product or process that used to be produced by internal stakeholders.As a system on industrial relations, outsourcing is widely used by many companies in the world, including Indonesia. It began in 1776, when Adam Smith, the pioneer of political economy, argued that firm would operate more efficiently if some unit businesses were distributed to other companies that were specialized in handling production process.Since 1980, many companies have outso...