Category: Organisational Behavior and Design (Page 1 of 43)

Introduction

Globalization, broadly defined as the increasing interdependence between countries, has changed the rules of competition in business by enhancing capabilities that allow the transfer of information, skills, technology, products, and culture (Bodislav et al., 2015; Wiesmann et al., 2017). It has allowed companies to develop critical strategy approaches that leverage the different alternatives available to them to survive in complex, dynamic, and competitive global value chains. One such type of strategic approach is offshoring/outsourcing. Offshoring is a popular strategic practice where companies disaggregate fine pieces of activity from their value chains and relocate them across national objectives to save on cost, enhance performance, or learning opportunities (Mykhaylenko et al., 2015). Companies will typically outsource their services from high-cost to low-cost environments, mostly characteristic of developing countries. However, the success of this offshoring depends on the ability of the low-cost environment to balance supply and demand. The failure to which the offshoring company could seek alternatives in the form of reverse offshoring. According to Wang & Song (2017), reverse offshoring can involve a backflow of offshoring where companies move their offices back home from developing countries, outsourcing tasks of enterprises in developed countries, and developing countries becoming contract issuers.