The Evolution of Business: From Offshoring to Sustainability
Offshoring
Offshoring involves relocating business activities from the home country to a different international location. Reasons for offshoring include lower costs, time savings, proximity to markets, access to expertise, and allowing companies to focus on core processes.
There are two main types of offshoring:
- Production offshoring involves relocating manufacturing processes to a lower-cost destination.
- Service offshoring involves relocating support processes, such as accounting, information technology, and customer service, to external companies.
Reshoring
Reshoring is the reverse of offshoring. It involves a business returning production or operations to the country of origin.
Company Structure
As a company grows, it is important to establish a clear organizational structure to define roles and responsibilities. Most companies divide their operations into departments, each responsible for a specific area of work.
Organizational charts illustrate the structure of departments and the chain of command within a company.
A Technological Revolution
Technology has transformed the workplace over the past 35 years. Smartphones, tablets, social media, instant messaging, and web conferencing have made communication instantaneous, simple, and inexpensive.
Computers allow businesses to operate 24 hours a day, and remote access enables employees to work from home.
Artificial intelligence (AI) is leading to the increased automation of work procedures.
Changes in Work Patterns
In today’s globalized world, there is more flexibility but less job stability. Permanent long-term jobs are being replaced by short-term contracts, temporary jobs, and multiple career changes.
The concept of a gig economy has emerged, where temporary, flexible jobs are common and companies hire independent contractors and freelancers instead of full-time employees.
Smart Working
Teleworkers are employees who work from home at least one day a week. Some countries have a high percentage of teleworkers.
Coworking has become popular in recent years. Individuals who work independently come together to share a working environment, often in business incubators that support new companies.
Security on the Web
Cybersecurity is a major concern for companies, as hackers can gain access to confidential data and steal information.
Two main threats are data theft and cyber ransoms, where hackers demand payment to release locked data.
The General Data Protection Regulation (GDPR) is an EU law that strengthens data protection for EU citizens and provides a framework for handling personal information.
Sustainable Business
A sustainable business aims to reduce its environmental impact while maintaining profitability.
Reasons for going green include:
- Reduced environmental risk
- Increased demand for green products and services
- Enhanced community relations
- Attracting and retaining top talent
- Attracting investors
- Cost savings
Recycling E-Waste
Electronic waste (e-waste) is the fastest-growing waste problem in the world. It contains toxic chemicals that can contaminate the environment.
Developed countries often export their e-waste to less economically developed regions, where recycling processes are often primitive and hazardous.
Recycling e-waste can reduce environmental pollution, greenhouse gas emissions, and save energy, resources, and money.
Green Internet
The rapid growth of the internet is increasing the demand for electricity. The IT sector consumes approximately 7-12% of global electricity.
Renewable Energy
Renewable energy comes from natural resources such as sunlight, wind, water, and geothermal heat. About 19.3% of global energy comes from renewable sources.
Renewable energy sources include:
- Solar energy
- Wind energy
- Bioenergy
- Hydropower energy
- Geothermal energy
Board of Directors
The board of directors is responsible for overseeing the company’s operations and making major decisions.
The board typically includes the chief executive officer (CEO), department directors, and managers from various departments, including:
- Finance
- Human Resources
- Purchasing
- Production
- Marketing
- Sales