Good or bad, outsourcing is new course for MIT Sloan MBAs

CAMBRIDGE, Mass., February 23, 2004 — Already a hot topic on the political circuit, outsourcing is now drawing an overflow crowd of MBA students to a new course about the controversial practice that begins this month at the MIT Sloan School of Management.

The course, which its professors say may be the first of its kind, focuses on a full range of economic, technological, managerial and organizational factors in corporate decisions to transfer white-collar jobs to other countries. The broad goal, according to Sloan Prof. Amar Gupta, is to make students aware of the positive as well as the negative aspects of outsourcing.

“When it comes to this topic, people are seen as either for or against,” said Gupta, who is co-teaching the course with MIT Sloan Prof. Lester Thurow. “We know the pain that comes with lost jobs, but people don't necessarily appreciate some of the benefits we get every day because of outsourcing. Consumers, for example, are getting items at cheaper prices in part because of lower production costs. And the tens of millions of Americans who own shares in companies may see higher dividends as their companies do better by lowering costs.”

Thurow, a former Sloan School dean, said outsourcing is not only a major political issue, but one of real relevance to MBAs. “If I were President Bush and running for re-election, I would have nightmares about professional outsourcing,” said Thurow. “Rather than Democratic blue-collar factory workers, traditional Republican voters are now at risk. They are going to expect some protection, and what should a President do to help them? Professional outsourcing creates a world where losses often occur at the top rather than the bottom of the pyramid. Naturally, our students need the skills to navigate in such a new environment.”

The course, which was initially proposed by students, was placed on a fast track to the Sloan course schedule and begins late this month. It has already drawn 55 students and has a waiting list, said Gupta, who said the enrollees average about eight years of previous business experience. “It used to be mainly blue collar jobs that went abroad,” said Gupta, who is co-director of Sloan's Productivity from Information Technology Initiative. “Now, for the first time, higher paying, white-collar workers are affected. As managers, our MBAs will have to deal with outsourcing. But their own jobs could potentially be outsourced. So on several levels, students need to be able to think clearly and fully about this important issue.”

To help them do so, Gupta and Thurow have invited several prominent guest lecturers, including Dr. Kristin Forbes, a Sloan alumna who now serves on the Council of Economic Advisors to President Bush. Each student is required to prepare a major paper, analyzing an actual outsourcing situation.

While the average American may have negative views of outsourcing, Gupta said the opposite holds among the MBAs who have signed up for the course. “Our students see outsourcing from a much more business point of view. They come in to this course mostly thinking it is a positive. Our goal is for them to understand all aspects of outsourcing so that they will have the skills they need when they go into the market.”

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Once named “Asian Businessman of the Year” by Fortune Magazine, MIT Sloan alumnus Keiji Tachikawa is the former president and CEO of global powerhouse NTT DoCoMo.

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