Management Essay Offshoring

In the current age of globalisation, management is no longer constrained by national borders and are now faced with new opportunities and challenges in managing the global environment. In this essay offshoring will be explored as one of the management practices used by managers to do global business. Factors managers need to consider in general and in the banking industry when offshoring will be analysed through the use of the PESTEL analysis and Geert Hofstede’s approach to assessing national culture. ANZ bank will be used as an example when analysing offshoring factors for the banking industry by examining their policies and response to these factors. Finally the challenges of doing global business for managers in the banking industry will be briefly discussed to identify how managers can help overcome these challenges.

With the increased competition and other challenges, Australian organisations face a new frontier, managers have to find more innovative and creative methods to maintain strong competition, and one of these methods implemented into business operations is offshoring (ed. RMIT University 2014). What is offshoring? According to Zuckerman (2008), offshoring is described as the relocation of business processes to another country. In other words, it is a global expression of ‘outsourcing’ and it refers to a business decision to employ workers in another country to do the work once done by locals of the origin company (Parliament of Australia 2005). Although offshoring is deemed by many economist as controversial, there are undeniably benefits that rest within offshoring in its function to reduce labour costs. A frim that is able to reduce costs in theory will be more able to compete in the global economy (Business Basics 2009, p.1).The reduction in labour costs can prove to be quite significant, and can save between an estimate of forty and seventy percent in labour costs. The savings however are partially offset by about ten to twelve percent due