Offshoring Essay Example | Topics and Well Written Essays - 1250 words - 1

Offshoring - Essay ExampleOffshoring, not only helps reduce the cost of operations of a company, only may also hit in terms of promotion in overseas markets. For some companies, offshoring of selective company processes may be the solution to their problems for others quantity shifting may provide the desired outcome. Whatever the purpose may be, considerable data has accumulated to support the fact that offshoring for some companies has a endurance value. Discussion Although offshoring has a number of advantages, there atomic number 18 number of issues that arise due to its very nature. A prominent cause of disruption in line processes can be related to the distance that exists between the control center and operation center. The distance may be in terms of physical or geographical locations or in terms of cultural or social factors. The term used for a team working in geographically dot settings is GDT (globally distributed team). It is defined as a team of workers (Contract or, 2011) Related to the same organization Serving a universal purpose and working in an inter-dependent manner utilise communication based on technological means Located in different geographical locations around the globe Benefits Generally, the perception is that offshoring countries lose finances to the countries to which work are offshored this is however contrary to the reality and experts are of the opinion that it is not only the offshoring country that benefits from the process but also the offshored country that gains benefit (Farrell, 2006). It thence appears mutually rewarding for all the countries that are part of the process. It is perhaps a means of promoting the concept of globalization where every country plays its role for the collective benefit of all. The first and foremost benefit of offshoring is related to financial savings. This is clearly manifested by the fact that the vast majority of offshoring is directed towards third military personnel countries, w here labor is considerably cheaper than the source country. In addition to the financial savings, the company also benefits from entering the new potential markets of the offshored countries. Since production is often carried out in such countries, the products are easily introduced into the local market which may provide an additional source of income for the company. Using locally produced raw material of low cost, the company is often in a position to not only earn profits from local markets, but also use their own market to earn huge profits. A number of benefits for the destination countries are related to direct investment which is received in return for services offered. These benefits may be in the form of countrys growth, engineering science transfer, job creation and in some cases the firms offering services also benefit from the process of offshoring (OECD, 2007). Although the level of benefit obtained in this regard may transfigure from case to case yet the projected b enefits give an idea about the possibilities of improvement related to offshoring. Dilemma of offshoring Offshoring has affected the lives of a number of people living in the developed countries. To maintain their standard of life they require higher compensation rates as compared to their equally qualified counterparts residing in third world countries. A number of companies of the developed countries are able to get the same services from experts residing in under-developed