Destination: Latin America - The Growing Offshore Demand for an Outsourcing Alternative

Scientific Essay from the year 2012 in the subject Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media, grade: 197/200, Marymount University, language: English, abstract: "Offshoring is when a company takes one of its factories that it is operating in Canton, Ohio and moves the whole factory to Canton, China" With this simple statement we give thanks to well-known author of The World is Flat, Thomas Friedman, for he puts the very complex concept of offshoring into a fairly understandable one. But the concept of offshoring is far from a simple strategy that firms across the globe partake in. Although one cannot introduce offshoring as a new concept, its rapid global expansion throughout more countries is certainly shedding light on the development of a new dynamic. Offshoring, formally known as "the relocation of production processes abroad" (Bottini & Ernst, 2007), has proved to become a major strategy in the business world and in the face of a rapidly evolving specialization in technological advances. Furthermore, "outsourcing's continuing growth is due to increasing expertise, reduced costs of more reliable transportation, and the rapid development and deployment of advancements in telecommunications and computers" (Heizer & Render, 2011).
Although offshoring/outsourcing may easily seem like a very cost-effective transition for a firm to lean towards, there are many risks that come about when analyzing potentially negative impacts of the strategy. One aspect that has streamed a constant debate throughout the domestic workforce is the enabling of hiring offshore labor as a result from workers hesitant to relocate to the developing countries. Furthermore, ethical debate has been sparked for the profit firms gain from such extreme cuts in production costs when comparing with costs for the same job in the United States or when focusing on compliance or lack thereof safe labor practices in the developing countries. On one end, there could be a positive economic growth and development through a change in the country's specialization pattern and an improvement in firm's productivity. Firms then face the risks with an implication of high adjustment costs through unemployment or inequality. [...]