In today’s globalized economy, firms often consider offshoring when confronted by rising costs and fierce competition. One mode of offshoring has continued to grow despite the current global economic turmoil: the captive center. Captive centers are offshore subsidiaries or branch offices that provide the parent company with services, usually in the form of back-office activities. In Offshoring Strategies, Ilan Oshri examines the evolution of the captive center. He identifies basic captive center models, examines the captive center strategies pursued by Fortune Global 250 firms, describes current captive center trends, and offers detailed individual case studies that illustrate each model. His analysis highlights the strategic paths available to firms that want to maximize the returns offered by captive centers.
Oshri outlines six models for captive centers that range from the basic wholly owned branch office to hybrids and joint ventures and identifies evolutionary paths along which the basic model develops. He analyzes firms’ strategies during initial set-up, then tracks the changes as strategies evolve to meet different business needs. The case studies, all based on the Fortune Global 250, include the development of a basic captive unit into a complex hybrid structure; the evolution of a captive center into a shared service center offering services to other international firms; the divestment of a captive center to a private equity firm; and the migration of a captive center to a location where costs were lower.
About the Author
Ilan Oshri is Associate Professor of Strategy and Technology Management at Rotterdam School of Management, Erasmus University. He is the coauthor of The Handbook of Global Outsourcing and Offshoring and Outsourcing Global Services: Knowledge, Innovation and Social Capital, and other books.
"The reports of the death of the offshore captive center, it turns out, have been greatly exaggerated. Yet even as the captive model resurges, corporations continue to struggle with their overseas operations. Ilan Oshri offers the only in-depth examination of the offshore captive center trend and strategies for how to do it right."
Stephanie Overby, Business Journalist
"As outsourcing has become ever more complex, the captive model of offshoring has fallen from favor. In this timely volume, Oshri explores how there is not only life remaining in the captive model, but also that captive centers deserve a reappraisal for the new decade."
Mark Kobayashi-Hillary, author of Global Services: Moving to a Level Playing Field and Building a Future with BRICs
"There is not a single book on offshoring that does such a compelling job of explaining offshoring strategies. Most existing books focus on offshore operationswhich is quite importantbut we really need to understand offshoring strategies first. Oshri carefully analyzes the strategic options that offshore captive centers can pursue. And clearly, the captive center option isn't dead, as some have too quickly asserted, but evolving. As with any juicy business book, the in-depth case narratives of six giant global firms' captive centers are rich and lively, offering valuable insight for the global sourcing decision maker."
Erran Carmel, Kogod School of Business, American University, and coauthor of Offshoring Information Technology
"Ilan Oshri, the world's leading researcher on the topic, has provided the most comprehensive coverage of captive centers ever publishedan area that is extremely important to global businesses, yet understudied. This book should be of interest to senior executives and directors of business units of every global firm."
Mary C. Lacity, Professor of Information Systems and International Business Fellow, University of Missouri-St. Louis