Offshoring: Strategies and Implications

What is the primary difference between offshoring and outsourcing?

• Offshoring involves setting up operations in another country, while outsourcing delegates tasks to third parties.

• Offshoring is more expensive than outsourcing.

• Outsourcing requires setting up a subsidiary in another country.

• Offshoring is only applicable to manufacturing processes.

Which of the following is the first step in implementing an offshoring strategy?

• Integrating offshore operations with headquarters.

• Selecting the right location.

• Identifying activities suitable for offshoring.

• Establishing operations in the chosen location.

Why did GE choose India for offshoring its back-office functions?

• India has the lowest labor costs in the world.

• India offers a large pool of skilled English-speaking professionals.

• India has the most advanced technology infrastructure.

• India provides tax incentives for foreign companies.

Which of the following is NOT a benefit of offshoring?

• Access to a diverse pool of skilled labor.

• Cost savings through lower wages and materials.

• Guaranteed political stability in the host country.

• Ability to quickly scale operations based on market demands.

How does offshoring help companies focus on their core activities?

• By reducing the need for skilled labor.

• By relocating non-core processes abroad.

• By increasing domestic job opportunities.

• By eliminating the need for strategic planning.

What is a major challenge of managing quality standards in offshoring?

• Differences in work culture and practices.

• Lack of skilled labor in the host country.

• High operational costs.

• Limited access to new markets.

Which risk is associated with political and economic factors in offshoring?

• Improved communication with headquarters.

• Guaranteed cost savings.

• Increased innovation.

• Disruption of operations due to instability.

What communication barrier can complicate coordination between offshore teams and headquarters?

• Time zone differences.

• Lack of internet connectivity.

• Limited access to skilled labor.

• High transportation costs.

Why is intellectual property a concern in offshoring?

• Countries with weaker IP laws increase the risk of theft or misuse.

• There are no legal protections available for IP in offshoring.

• Offshoring requires sharing all company secrets.

• Offshoring always leads to IP theft.

What impact can offshoring have on domestic jobs?

• It always creates more jobs domestically.

• It has no impact on domestic employment.

• It guarantees higher wages for domestic workers.

• It can lead to job losses in the home country.