Negative Contributions to the Economy

Negative Contributions

While Large-Scale Organisations positively benefit the economy is numerous ways, their influence can also have negative effects on the economy. These can include downsizing, outsourcing and negative externalities.

Downsizing

Downsizing refers to workplace staff reductions, with the elimination of jobs and positions. It typically involves the removal of unproductive sections of the organisation to improve the profit received by the organisation.In the event of downsizing it negatively affects the economy as it can result in an increase in the unemployment within Australia, leading to an increased cost for the government to support these people.

Outsourcing

Outsourcing is the contracting of some non-core organisational operations to outside suppliers rather than within the organisation. This can negatively impact on the Australian economy as it can cause a loss of jobs if positions are contracted out overseas to external organisations. This may also lead to fair trade issues if manufacturing is contracted out to countries who do not have fair trade laws or agreements, safe working conditions and satisfactory pay for their employees.

Negative Externalities

Negative Externalities refers to the outcomes of production that negatively impact upon society. LSOs typically produce and manufacture on a very large scale to keep up with the demand for their goods and/or services. This can include pollution, wastage and environmental damage.