Offshoring and Outsourcing (Edexcel A-Level Business): Flashcards
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Offshoring definition
Offshoring definition
Relocating business activities/jobs to another country
Outsourcing definition
Outsourcing definition
Transferring business functions to external specialist firms
Offshoring location characteristic
Offshoring location characteristic
Always international
Outsourcing vs offshoring: key focus difference
Outsourcing vs offshoring: key focus difference
Outsourcing: WHO does work; Offshoring: WHERE work is done
Two main reasons businesses offshore
Two main reasons businesses offshore
Cost reduction and access to skilled workers
Offshoring reputational risk
Offshoring reputational risk
Job losses can lead to boycotts & reduced brand loyalty
Key benefit of outsourcing
Key benefit of outsourcing
Focus resources on core competencies
Outsourcing dependency risk
Outsourcing dependency risk
Heavy reliance on external provider creates vulnerability
Labour productivity definition
Labour productivity definition
Amount of goods/services produced per hour of labour
What matters more than wage costs when offshoring?
What matters more than wage costs when offshoring?
Labour productivity: cost per unit of output