The impact of offshoring on firm competitiveness

Offshoring strategies, in spite of their continuous growth, have not always delivered the expected results: cost savings are often much lower than expected, customers may be considerably upset, and relevant competences can be lost for the future. This article looks at the impacts of offshoring on firm competitiveness, in the short and in the long term. The analysis is based on two managerial theories (the contingency theory and the resource-based view of the firm) taking as reference two relevant offshoring business cases: the fashion industry and the information system management. It appears that offshoring, besides its short-term impacts on cost reduction and its long-term risks for core activities, is a comprehensive transformational process that only few companies can afford not to learn from.