Offshoring

Elaborate on the Pros and Cons of Global “Offshoring and Outsourcing” Strategies

Usually people think of China and India when someone mentions the word outsourcing; however, outsourcing means “contracting out of a business function - commonly one previously performed in-house - to an external provider”i, so it does not need to be in another country. For example, “Procter and Gamblecontracted its IT process to Hewlett-Packard, its HR services to IBM, and its facilities management to Jones Lang LaSalle.”ii

On the other hand, “Off-shoring describes the relocation by a company of abusiness process from one country to another.”iii The word offshoring can be related to India and China because they are the top off shoring destinations.iv The are two faces and two points of view inthe offshoring and outsourcing topic. One point of view is the multinationals, the other point of view is the American people.
The mayority of Multinationals like the idea of offshoring andoutsoursing mainly because they reduce prices. Additionally, overtime, these strategies have more advnatages than just reducing costs. One of the advantages that a multinational has other than reducing cost isto that outsoursing ease globalization. When a multinational company outsources to i.e. India, it is more easy to reach the middle eastern market and the asian market. Also, the indian marketbecause they are now more familiar with the cultural and how they do business.

Before businesses had a risk when deciding to outsource because it was not something safe; however, nowadays outsourcing hasbeen improving effectiveness, standardization, technology and quality. Additionally, now outsourcing some parts of a business is synonym of specialization. A company cannot be the best at doing everysince thing. However, when they outsource, for example, their accounting department to a company specialized in accounting, besides the company focusing more in what they do best, they are giving...