Constant Changes in the Business World, Essay Example

In the view of the constant changes and advances in the business world, the contemporary economic and financial vocabularies are being altered with new words, terms and expressions on the daily basis. One of such terms that we by now should be already used to coming across in magazines and newspapers or hearing from news programs and political debates is “off shoring”. However, even taking in consideration the fact of the daily use of the term, many people still find confusing or not clear enough the exact meaning businesses are trying to put through under such expressions as “off shore” and “off shoring activities”. For this reason, the aim of this paper is to identify the meaning of the term “off-shoring” for regular consumers and put forward a couple of examples in order to provide better understanding and perception of the above discussed term.

To begin with, I find it important to point out that the term “off shoring” nowadays has taken a slightly different meaning compared to the one it held in its origins. Previously, by off shoring people usually meant running various domestic business operations in countries abroad. The historical tendency of off shoring could be clearly witnessed with an example of physical goods, when American and European businesses, having matured, shifted abroad in such areas as shipbuilding, textiles, automobiles and manufacturing. Today, however, a small but significant remark is added to the term as off shoring can be also applies in the field of services provision. All in all, according to Carmel and Tjia, the term “off shoring” is now being “understood by many of its business users to mean the shifting of tasks to low-cost nations, rather than to any destination outside the country”. Low-cost nations in this case are those falling “into the economic grouping of “developing nations” or “emerging nations”” (xix).   In other words, it is a growing practice among countries with developed economies of employing people in emerging markets, where labor costs are low, to carry out service functions previously done at home (Farrell 2).

If we take a look at the majority of goods we are using on the daily basis, it will be hard to find the sticker that says “Made in USA”.  Most of the goods, though holding the American or European brand names, appear to be made in China, Japan, India or Taiwan. And this is what off shoring is all about. The ideas, being developed in so-called “developed countries”, obtain the physical appearance abroad. There are a couple of reasons for such a tendency to occur. First of all, the production and operation costs are much less there as the standard of living in such countries is usually much lower than in US, for example. Consequently, employees’ salaries are smaller compared to corresponding American ones as well as infrastructural and capitol expenses are much less in comparison with domestic business running operations. Furthermore, off shore countries appear to supply a handful of young and talented people who are willing and able to work, demanding much less than the same type employees at home. As a result, prosperous businesses, especially IT companies, tend to run operations off shore with the view of spending much less for the same amount of work being done.

All in all, I find it important to point out in the end that in order to keep up with the on-going activities in the business world, it is vital to have a clear understanding of the majority of the used terms out there. This not only broadens one’s outlook, but also enables to build a perspective, intellectual and respectful image of oneself. As in regard to this paper, the clear understanding of the term “off shoring” will now allow to not only keep up with the current business activities and government issues on this subject, but will also help to build up one’s own idea on the effectiveness of such kind of business activities and plans.

Works Cited

Carmel, Erran and Paul Tjia. Offshoring Information Technology: Sourcing and Outsourcing to a Global Workforce. Cambridge University Press, 2005.

Farrell, Diana and McKinsey Global Institute. Offshoring: Understanding the Emerging Global Labor Market. Harvard Business Press, 2006.