Advantages Of Offshoring

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TITLE PAGE Transformation of captive offshore subsidiaries in CEE as a result of development of the economy. ACKNOWLEDGEMENTS Table of contents 1. Introduction Offshoring The offshoring is not a phenomenon new to the economy. In fact it has been a well known and broadly implemented in the strategies of most of the multinational companies. The whole concept has been triggered by the emergence of the global economy, liberalisation of trade in goods and services, internationalisation processes and strive of the organisations to remain competitive, cost effective and lead the innovation capturing the global advantages. 1.1 Global sourcing Past few decades has been an enormously important boost period for the world’s economy and businesses.…show more content…
Despite many well know offshoring models it turned out to be a very specific and complex process, demanding an individual business design for each organisation based on their operation characteristics and Leeds. Therefore until now it is possible to find only very broad definitions. All of them include certain elements: - relocation - disintegration - remoteness - cost optimisation So far the best attempt to define it was made by Annushina and Lojacono (2011) „offshoring is a concept used to indicate various phenomena such as delocalisation of firm’s activities to remote or low-cost countries, foreign direct investment (FDI), international manufacturing - relocation of value chain activities globally” and Hahn et all who defined it as: „more general term involving the relocation of work somewhere abroad (i.e. a non-domestic sourcing). Some scholars go event further and see it as a new form of internationalisation, where companies desegregate tasks and business functions across the national boarders (Nieto and Rodriguez 2011). Following the above it is possible to group companies activities in their global sourcing portfolio as presented in the below…show more content…
The process of relocation of manufacturing has started in 1990 when companies started looking for cost optimisation and moving their production activities to low-cost countries (Nieto and Rodriguez 2011). Very quickly multinational organisations were able to see the effect of moving their production to East Asia and Eastern Europe. What is more most of the competitors simply had to follow those trends to be able to still compete on the global market, and keep their prices and overheads low. This was the first step in

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