Subsidiary operations- the next move in business expansion

There seems to be a growing concern about loss of business knowledge amongst companies involved in downsizing their employee counts.
The following report appeared in

Allie Young, research VP at Gartner, said in a statement: “Companies have a growing concern about losing control of their intellectual capital and the business knowledge of key employees whose jobs or roles may be threatened by outsourcing, particularly when downsizing occurs.”

An alternate option with these companies is to open their subsidiary operation in the new economy. Cost cutting and retaining control over intellectual capital of the company by recruiting local talent are pre-dominant amongst the several advantages offered by subsidiary operations. After MNC’s, it might now be several medium size IT entreprises in US and Europe who would be rallying to open their offshore operations in low cost destinations such as India.

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