What are the pitfalls to avoid when investing in overseas activities? The following key issues have been identified as important:

• Lower cost offshore does not always mean gains in efficiency.
• Choose your model carefully; either run your own offshore operation or outsource.
• Get your current employees to be supportive, otherwise they can hinder the process.
• Be prepared to invest time and effort because quality control can be challenging.
• Treat your overseas partners as equals in your business dealings.

Instructions

a. Explain how the above list of key issues in offshore investments can have an impact on future cash flows associated with an offshore investment.

b. Discuss the ethical implications of encouraging current employees to help a company shift jobs overseas.