Page 34 - E1 Integrated Workbook STUDENT 2018

Chapter 2

Offshoring

Offshoring is the relocation of corporate activities to a foreign
country.

Common activities to offshore include call centres, IT enabled services (e.g.
software development) and business process operations (e.g. human resource
management, payroll processing).

Advantages of offshoring Disadvantages of
for a UK company relocating offshoring for a UK
its activities overseas company relocating its
activities overseas

 Cost savings.  Cultural, language and time
differences.
 Access to talented and motivated
professionals.  Instability of offshore countries.

 Cheap, high quality technology  Cost savings not always realised.
makes the process more  Job losses in the UK.
straightforward.
 Increased risk that confidential
 Ease of communication since information is lost.
English is often the common
language.  Exchange rate effects.

 Fast turnaround time.

Advantages for the recipient Disadvantages for the
country that provide the recipient country that
service, e.g. India provide the service, e.g.
India

 Much needed jobs.  Poor working conditions, e.g. hours,
wages.
 Improvement in skills.
 Technology transfer may not occur.
 Advances in infrastructure/
technology.

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