Introduction Looking back at 2003, more than 150 000 jobs were offshored within a year in the U.S. Companies had started to realize the immense benefits that were associated with offshoring. Lower labor costs, lower production cost, and internationalization. All these factors sprung the process of offshoring to the main stage. Since then, the numbers of offshoring have steadily been decreasing. According to Scott Foster, data indicates that offshoring will continue to decrease in popularity as salaries in lower wage countries rise to meet the market demand (Foster, 2004). Additionally, with the rise of transportation cost, high oil prices, and a growing awareness of the global supply chain risks, the home countries for these multinationals …show more content…
Offshoring is referred to the organizational practices of moving business activities beyond the borders of their home countries, and are normally practiced with the purpose of achieving one or more strategic objectives, such as cost saving, foreign market development, increased knowledge. A company’s operations could thus easily go from offshoring to reshoring following unfavorable changes on any of these objectives. A reshoring strategy is the practice of reversion of previous offshoring decisions, with the intention of bringing the activities back to the home country. Thus, the process of reshoring is never really understood without considering the “starting point”: offshoring (Grappi, …show more content…
Companies will no longer put all their emphasis on pursuing the lowest price countries. Instead, as the market grows companies are more concern about their reputations and the exposure that they could face, and thus utilize a more long-term, and ethical system regarding their offshoring decisions (Ellram, 2013). According to (Fratocchi, 2015) the most frequently cited motivations for reshoring were the reduction of labor costs between host and home countries as well as the poor quality of production abroad. Some of the more beneficial impacts related to reshoring relate to sustainability, reshoring has both social- and environmental implications due to the increased supply chain visibility and differences in country practices and standards compared to the practices of