Factors that play a role in the offshoring strategy of European SMEs

Offshoring is a widely applied international strategy by European small and medium-sized enterprises (SME). Companies disintegrate activities of their value chain and replace them to a foreign location to build a global network whereby competitive advantages are created by sourcing important activities and knowledge in many parts of the world. This strategy increases the complexity of doing business and many managers lack extensive knowledge of this phenomenon. This research provides an overview of the factors that play a role in the offshoring strategy of European SMEs. These factors are related to the governance mode decision of captive offshoring and offshore outsourcing, the stages of implementing the strategy and preventing hidden costs, and the coordination of offshore and onshore teams and maintaining foreign relationships.