OFFSHORING Meaning and
Definition
-
Offshoring is a business practice commonly defined as the process of relocating certain activities or services of a company to a foreign country. It typically involves transferring distinct operational functions, such as manufacturing, production, customer support, or back-office tasks, to another nation with the aim of capitalizing on various advantages that may be present in the offshore location.
Primarily motivated by cost-efficiency, offshoring allows companies to take advantage of lower labor costs, reduced tax regulations, or relaxed environmental standards in the foreign country. This practice frequently targets countries with cheaper labor markets, such as India, China, or the Philippines, where skilled workers can be hired for a fraction of the cost compared to their domestic counterparts.
Apart from cost savings, offshoring may also enable companies to access specialized skills or expertise that may be lacking domestically. By moving certain functions abroad, organizations can tap into a global talent pool, benefiting from highly skilled foreign workers and their knowledge or capabilities. Additionally, offshoring can serve as a strategy for expanding into new markets, fostering international partnerships, or diversifying supply chains.
It is essential to differentiate offshoring from outsourcing, as the terms are often used interchangeably but have distinct meanings. While offshoring refers to the physical relocation of operations, outsourcing refers to the contracting of external entities to perform specific tasks - these services can be either domestic or foreign.
Common Misspellings for OFFSHORING
Etymology of OFFSHORING
The word "offshoring" is derived from the combination of two words: "off" and "shore". "Off" generally refers to a distance away from a particular location, and "shore" specifically refers to the land along the edge of a body of water, such as a sea or an ocean. The term "offshoring" originally described the practice of relocating a company's operations, particularly manufacturing or service activities, to a foreign country that is geographically separated, often across a body of water. Over time, it has become synonymous with outsourcing or relocating various business processes to another country, typically with the aim of reducing costs or accessing specific advantages, such as cheaper labor.
Similar spelling words for OFFSHORING
Infographic
Add the infographic to your website:
