Page 33 - F1 - AB Integrated Workbook STUDENT 2018-19

Business organisation and structure
3.2 Offshoring
Offshoring is the relocation of corporate activities to a foreign country.
Advantages of offshoring for
a UK company relocating its
activities overseas
 Cost savings.
 Access to talented and motivated
professionals.
 Cheap, high quality technology
makes the process more
straightforward.
 Ease of communication since
English is often the common
language.
 Fast turnaround time.
Advantages for the recipient
country that provide the
service, e.g. India
 Much needed jobs.
 Improvement in skills.
 Advances in infrastructure/
technology.
Disadvantages of
offshoring for a UK
company relocating its
activities overseas
 Cultural, language and time
differences.
 Instability of offshore countries.
 Cost savings not always realised.
 Job losses in the UK.
 Increased risk that confidential
information is lost.
 Exchange rate effects.
Disadvantages for the
recipient country that
provide the service, e.g.
India
 Poor working conditions, e.g. hours,
wages.
 Technology transfer may not occur.
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