RelocationRelocation is a concept that is not included in the dictionary of the Royal Spanish Academy (RAE). The notion of locationinstead, it is referred to as the process and result of locating (find out where something or someone is, decide on a location, limit).

The inclusion of prefix re- allows us to indicate that relocation consists in re-locate. The term is often used in reference to relocate something or someone to another place. For instance: “Given the negative result of the environmental impact study, the German company was forced to relocate its plant”, “We have to define the relocation of three employees due to the closure of the marketing office”, “When we bought the sofa, we had to relocate the closet as there was no space for both of us in the living room”.

The term is frequently used in the field of economy to mention the international displacement of a productive structure. In this context, the concept of offshoring, which refers to the transfer of a company’s operations to a country in which the market presents more favorable conditions, and where wages are lower.

Offshoring is a resource that many companies take advantage of to increase their production without this being reflected in the costs. One of the immediate advantages is the increase in the number of workers, since with the same money as in the country of origin they could support one, the normal thing is that in the new location they can hire two or more. One of the most common destinations for certain European companies is South America, given the devaluation of many of its currencies.

Take the case of a Spanish company dedicated to the commercialization of sportswear that, in the decade of 1990, decided to relocate its production, sending it to ChinaTwenty years later, the new economic context led this company to decide to relocate production, now moving it to Brazil. This type of decisions they have to do with finding the place that offers the lowest production costs.

RelocationBoth offshoring and relocation have several advantages and disadvantages. Some of the benefits have already been mentioned in previous paragraphs, and they all seem to revolve around financial issues. But, what can be the risks of moving a company to another country in search of a saving of costs?

First of all, the lack of control. The usual thing is to send one or more workers from the country of origin and grant them a managerial position abroad, to ensure that the campus meets the original quality and organization requirements. In addition, after a relocation, the headquarters usually carry out visits of its main representatives to the offices international.

However, no matter how much effort I put into company to the supervision of its various locations, it is very difficult to maintain absolute order, especially when they come into play cultural and language differences. Depending on the case, even the presence of an official representative does not guarantee good performance, since if he does not speak the regional language at a very high level, it is also possible that they will not respect it properly.

Finally, relocation can be linked to go back to local. When goods are produced, traded and consumed in the same country, the internal economy is improved and the environment is protected (avoiding transport over long distances). The cycle that leads a company to start operating locally, seek to expand by obtaining offices abroad and, finally, re-centralize its work in the country of origin is not uncommon.