Question

Let us consider strategic risk. Look at the matrix and identify the two parameters that determine strategic risk. These two parameters are about the threat of opportunistic behavior from third-parties from which a company sources services. They do not necessarily distinguish between offshore and onshore providers. This observation leads us to a question: Now think of the measures that a company can adopt to mitigate strategic risk. Are some of those measures weakened by (or are costlier to implement) in the case of an offshore sourcing arrangement – i.e., where the provider is in say, Asia and the client is in say, the US or Canada?

Answer 1

Strategic risk means the process of identifying assessing and managing the risk in the organisation's business strategy including taking swift action when risks are realized.An offshore company can offer the same services as an onshore company and both have limited liability.The main difference between an onshore and offshore company is the tax rate they pay.On the other hand,Onshore companies pay normal tax rates  which are higher than the tax paid by offshore companies.Outsourcing is an arrangement in which one company provides services for another company that could also be or usually have been provided in-house.Offshore simply means "any country other than your own".

Nowadays,even companies in developing countries start to outsource offshore.Business providers themselves outsource part of their work to counties with lower wages or countries where the manpower can provide skills (such as foreign languages)not easily available at home.As of today the the main country providing business service in India.