Running Head: MANAGEMENT 1

MANAGEMENT5

Management

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The core transaction of the organizations is the decisions. Organizations can outperform their Competitors easily by making their decisions in at least three ways, make faster decisions, make better decisions, and more decisions are implemented. This way organizations become successful. The process of decision-making is complex and multifaceted. (Grušovnik et al., 2017) In complex, competitive, and dynamic global supply chains, the most important and key strategic approach is offshoring. Outsourcing or offshoring can be defined as a business agreement that is international or domestic. This strategic management initiative aims to gain the competitive advantage of an organization. Firms now undertake this sustained trend of business because in both the domestic and international marketplaces, offshoring is considered a typical competitive strategic phenomenon.

Many parameters have an impact on offshoring decisions. An offshore strategy is created with the help of these decision parameters and they play a vital role for a successful firm. Some of the decision parameters are country location, the criticality of business process, language proficiency, stability of the host government, cultural compatibility, and infrastructure and transportation

For a company that wants to outsource its firm, choosing an offshore country is one of the strategic decisions. Selection of the country should be planned and one should look at micro and macro conditions. However, it has been observed that too little focus on the selection of the country is made. It is more likely a specific requirement for a specific job which is a huge blunder. It should be seen as a long-term collaboration and not just as savings. Proper assessment of the country should be made and one should look for both savings and long-term collaboration. In structuring the corporation’s strategy, the professional offshore partner should be helpful. The analysis, on the other hand, is critical and may be crucial to the overall yield. Time zone issues are also linked with the country's location and it must be focused too. Before choosing an offshore destination it is important to keep the time zone in mind. (Mullick & Smith, 2019)

The criticality of business process and function have a huge impact on the operations of the company. In an organization's day-to-day decision-making, the criticality of the business process plays a central role. Functions like inventory management and production scheduling in a manufacturing firm are the two critical roles. These functions are important for the implementation of operational strategies. However, some firms have outsourced their manufacturing activities to companies such as telecommunication equipment and consumer electronics have outsourced their activities to Flextronics and Solectron.

When offshoring, communication consideration is important. Language proficiency is important and the most basic level of communication is English language proficiency. To ensure smooth working relationships, working on language is significant. Moreover, an important communication aspect to consider is cultural nuance. Team members of both local and offshore need to accept and understand different cultures. They need to know how they react, what they hear, and what they say. (Anderson, 2020) To be able to communicate swiftly and easily, good language skills are required. Language abilities can vary greatly. Sometimes you do not need English fluency for a successful business. To transact business, familiarity with the dominant language is important. It is important to note that European and GCC employees do not have perfect language skills.

Cultural compatibility is also one of the decision parameters that are important to create an offshore strategy. In terms of work behaviors and social characteristics, cultural compatibility is mostly discussed. In international business, it is vital to understand each other at the cultural level. Misunderstandings are created due to cultural gaps. Businesses must know the service provider's background, like how they interact and where they are situated. Language and cultural disparities will be identified this way. Before anything becomes a problem, the resolution of difficulties will also be recognized. (Ramirez, 2013)

The stability of the host government is another decision parameter. The economic development of the chosen country is important but in some cases, it does not matter. It depends on the company like what kind of firm it is. For instance, the IT companies select the country and regions that have less economic stability or less security. On the other hand, it is the opposite with the European and GCC. Sometimes the economic stability of the country matters because it means immediate economic advantage and therefore it plays a vital role but sometimes it does not matter. (Mullick & Smith, 2019)

Infrastructure and transportation are other decision parameter that is important for the offshoring process. No matter how dependent firms have become on technology and online conferencing, they still travel and need to visit offshore destinations. Therefore transport time is important and it must be focused on for the sake of the offshoring process. A new factor that has a huge impact is location attractiveness. Hence both infrastructure and transportation are important for offshoring. (Mullick & Smith, 2019)