In: Business and Management

Submitted By ebong52
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International Bus Mgmt Victor Ebong
Turn-in September 13, 2011

Offshoring & Outsourcing

1. Explain outsourcing, offshoring, and nearshoring and give the benefits/costs of each. Why are the benefits of offshoring being questioned more recently? (Reading 1) * Outsourcing- The farming out of work or certain duties to an outside organization. It can be to a company outside the country but in most cases when termed “outsourcing” it is being done within the country. The benefits of this are that jobs are not being lost in a particular territory or country and the work is being done at a more cost effective and efficient rate * Offshoring- Is the wholesale shifting of corporate functions and jobs to overseas territories. This may not necessarily mean shifting of the work to a different organization but rather shifting work to organization’s subsidiaries abroad.

* Nearshoring- Is a concept similar to offshoring whereby companies shift operations, often IT related to foreign countries that are close to their own. The major reason behind this is that while gaining the labor cost advantage, many of the same languages are being spoken of the parent corporation. Additionally, these operations allow for travel on short notice without jet-lag.

* The benefits of offshoring are being questioned now more than ever because of the extremely high unemployment rates here in the US. Many critics believe that those Americans out of work are due in large part because their would-be jobs are being shipped abroad. Most notably the fact that now service jobs along with the labor work is being sent abroad has raised the most concerns

2. What are the specific areas in which the United States benefits from offshoring, and what is the dollar amount of the net benefit? How does India benefit? What conclusion…...

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