Offshoring and Outsourcing
Introduction
So, Recently, offshore/outsourcing has become extremely important for companies that compete worldwide. Most importantly in many industries, only companies that manage to be competitive globally can aspire to attain sustainable competitive advantages.
Offshoring and Outsourcing – Importance
Therefore, offshore outsourcing has become essential for many companies and recently has become more and more a vital part of the long-term strategies of the leading firms.
Outsourcing Background
The theme of outsourcing has been studied by many authors in management literature since the first definitions. “As the practice followed by management. Of contracting out in-house functions. That companies do not do particularly well to outside firms that do”.
It refers to “the practice of transferring activities traditionally done within a firm to third party providers within the country or ‘off-shore’”
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Offshore Outsourcing as a Vital Part of the Long-Term Strategies of the Leading Firms
Before the late 1990s. Offshoring was rarely considered. In the long-term plans of companies; since the beginning of 2000, however, it has been the center of strategic planning for almost every business. So the large companies outsource existing business processes internationally to reduce costs and achieve greater efficiency
“Offshoring allows firms to extend their business boundaries and acquire skills from other countries.”
Offshoring and Outsourcing – Today’s Need
So the rapidly shifting conditions in the marketplace is forcing management to constantly review and defend its core competencies. However, management is now confronted with a higher level of complexity. And disruptions brought about. In particular by the new waves of globalization and the irresistible march of technological changes.
Conclusion
So for these reasons, offshore outsourcing is transforming the functions of the traditional firms into a network of competencies. However, The tendency to offshore most of the productive and economic activities and processes can lead companies to transform themselves into virtual organizations. Certainly where all the functions. Could be outsourced. Through the formation of flexible networks. And agile organizational structures.