Offshoring: Dimensions and diffusion of a new business concept

In order to leverage global cost differentials, companies are increasingly turning to offshoring. Nevertheless, discussions in research and practice on offshoring are characterized by the lack of a common definition as well as a theoretically grounded explanation for this phenomenon. This article presents an explicit definition in order to provide a stringent understanding of the term offshoring along the dimensions of contractual/legal arrangement and geographic location. Further, the driving forces of offshoring are analysed on the environmental and company levels. The article closes with a discussion of managerial implications and an outlook on aspects for further research.