TITLE

DEVELOPMENT OF NEARSHORING IN GLOBAL OUTSOURCING MARKET

AUTHOR(S)
Kvedaravičienė, Goda
PUB. DATE
August 2008
SOURCE
Economics & Management;2008, p563
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Global outsourcing is a strategy, used by companies and is defined as right mix of onshore, nearshore and offshore resources, which should guarantee optimal balance of cost, growth, risk and efficiency. After companies started to distinguish core processes from non-core, non-core were moved to low cost countries by using two different strategies: deployment and outsourcing. In both approaches offshoring model became unstoppable, as organisations looking for cost savings were taking advantage of lower infrastructure costs and lower wages, i.e. switching from on-shore resources into remote offshore labour. However experiences have showed, that before you go offshore various risks should be carefully calculated and evaluated. As an option to offshore risks another model is taking strong position - nearshoring. Nearshoring means sourcing service activities to a foreign, lower-wage country that is relatively close in distance and time zone. The customer expects to benefit from one or more of the following constructs of proximity: geographic, temporal, cultural, linguistic, economic, political or historical linkages. The objective of the article is to disclose the origin of nearshoring concept and the circumstances, which caused its genesis, identify advantages, compare with offshoring and deliver conclusions, when nearshoring is the most appropriate approach and how it should be employed within companies' outsourcing strategies. Empirical part of the paper is based on actual data and examples of nearshoring development.
ACCESSION #
32588463

 

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