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Job design becomes more specialized and routine in lower tiers (less autonomy, more repetition), while upstream roles (design, coordination, quality control) remain complex.

Skill demands polarize: high skills are needed for functions like R&D, supply chain management, and coordination; low to medium skills suffice for many production roles. Outsourcing tends to reduce demand for low-skill work in origin countries, while increasing demand for more advanced skills.

Working conditions tend to worsen in the lower tiers: lower wages, longer hours, job insecurity, weaker protections, and poorer health & safety. But conditions can improve in places with stronger regulation, motivated buyers, or stricter audit

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sneha & seher

When companies outsource work to other countries where labor is cheaper, it changes how jobs are designed and the skills needed. For example, a company like Apple may make its iPhones in countries like China. Workers there often do specific tasks, like assembling parts, which means jobs are very repetitive and need less skill. Meanwhile, workers in Apple’s home country, like the U.S., may focus on designing products, managing supply chains, or improving technology jobs that require more training and creativity.

Outsourcing can lower costs for companies and create jobs in low-cost countries, but it may also lead to poor working conditions and low pay. For the company, it is efficient and helps innovation at the highskill end. For workers in outsourced locations, jobs can be limited and sometimes unsafe.

Example- Foxconn factories in China make iPhones, while Apple engineers in the U.S. focus on design and software.

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The Companies who try to outsource often win because they have the options of having contract with other contractors, if they run out of relying on a single supplier giving the end benefit to the consumer who is buying it at the lower price.

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Real-World Example

Apple’s iPhone Supply Chain:

Assembly jobs in China (e.g., at Foxconn) are repetitive and lower paid than equivalent jobs in the US—but Apple audits factories and requires improvements.

In the US, Apple’s workforce is focused on product development, logistics, design, and global oversight, with high skill requirements and better pay/conditions.

Apparel/Retail Sector:

Fast fashion brands (e.g., H&M, Zara) outsource clothing production to Bangladesh or Vietnam, impacting job design (routine sewing), skill levels (mainly basic skills), and leading to concerns about factory safety and workers’ rights—highlighted by the Rana Plaza tragedy.

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Shriyans and prathamesh

Both sides win in specific ways:

The Home Company wins by achieving lower costs, reduced risk (by retaining core IP), and a more strategically focused high-skill workforce.

The Host Country wins by gaining jobs, economic development, and increased participation in the global supply chain.

However, the major loser in this model is the low- to mid-skilled routine worker in the home country, whose job is eliminated, and the low-skilled routine worker in the host country, whose working conditions and limited skill development may trap them in specialized, monotonous roles.

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when companies outsource production to lower-cost countries, job design and working conditions changes across the supply chain as, in the home country, the role often shift from operational tasks to strategic functions such as design, R&D, quality assurance, and supply chain management. eg. apple's US employees focuses on the iphone and mac design while the oversight assembly happens abroad. In outsourced locations, tasks are typically standardized and repetitive, like Foxconn workers assembling iPhones or garment factory employees in Bangladesh following specific sewing patterns, which limits skill development. Skill levels also differ: headquarters employees require higher-order skills such as project management and data analysis, while outsourced workers mainly need basic technical proficiency. Working conditions vary too; home-country jobs generally offer better labor protections and ergonomic setups, such as German car assembly plants, whereas factories in lower-cost countries may have long hours and lower wages, as seen in electronics and textile factories in Asia, though some brands improve conditions through auditing standards like SA8000. Finally, outsourcing increases supply chain complexity, demanding robust coordination, quality control, and logistics management, as exemplified by Nike coordinating footwear production across Vietnam, Indonesia, and China to ensure timely, high-quality delivery.

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For Working Conditions

In supplier (offshore) countries:

Working conditions are often basic or poor, especially in labor-intensive industries (e.g., apparel, textiles).

Long hours, few benefits, health and safety risks, and sometimes child labor can be issues—this is why ethical sourcing has become so important.

Pressure from multinational brands is slowly improving standards in many places, especially where reputational risk is high.

In home countries:

Fewer people work in manufacturing, but regulatory and labor standards are typically much higher for remaining employees.

Focus is on ensuring compliance from overseas suppliers and meeting corporate social responsibility standards.

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For Skill Levels

In low-cost countries:

Majority of jobs require lower or semi-skilled labor. Workers are trained quickly for production tasks, but may lack opportunities for advanced skill development or career progression.

Over time, some factories upskill workers—especially in electronics or auto sectors—but most roles remain low-skill.

In home countries:

There is rising demand for workers with global supply chain management, engineering, quality control, data analytics, and negotiation skills.

Some skilled manufacturing jobs may be lost, but jobs in global coordination increase.

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For Job Design

In low-cost production countries:

Jobs are often split into narrowly-defined, repetitive tasks to maximize efficiency and reduce the need for lengthy training. Example: On a garment factory floor, each person might sew only sleeves or stitch collars.

There is a strong focus on assembly-line and routine-based work, with less emphasis on creativity or decision-making.

Management jobs may remain in the home country, while operational roles move abroad.

In high-cost (home) countries:

Companies retain higher-value, knowledge-intensive tasks: R&D, marketing, branding, design, and supply chain oversight.

More jobs focus on managing suppliers, logistics, and quality assurance, rather than direct manufacturing.

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SHAURYA & SUJAL

In the Original (Home) Country: Jobs that remain become more "brainy" (Job Enrichment). Workers stop doing routine tasks and focus on high-level, creative work like planning, research, branding, and management. Their overall skill level goes up.

In the New (Host) Country: Factory jobs become very "simple and repeatable" (Labor Specialization and Enlargement). Workers focus on a few basic steps over and over. This maximizes output but means the jobs are often low-skill, low-wage, and offer poor conditions, with little chance for the worker to move up.

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Outsourcing shifts low-skill, repetitive jobs to lower-cost countries, often with weaker labor protections.
Meanwhile, higher-cost regions focus on strategic roles, creating a global divide in skills and working conditions.