What is global sourcing

Global Sourcing al Affiliation Global Sourcing Global sourcing is a term used to refer to the practice of acquiring goods and services from foreign countries through buying (Schneid, 2010). For instance, one sovereign state may decide to develop a strategy that ensures that it buys a variety of goods and services from other sovereign states rather than producing them on its own. It is important to understand that countries do not always engage in global sourcing due to their inadequacy to manufacture such products of services. However, they always engage in the practice of global sourcing due to several benefits that always come with such moves.
Global sourcing is important due to the fact that it broadens the knowledge on how to conduct businesses in other countries (Schneid, 2010). In addition, global sourcing is always cheaper than producing the goods and services on one’s own. Furthermore, global sourcing leads to reciprocating of trade. For instance, it ensures both buying as well as selling an organization at the same time (Sollish and Semanik, 2011). This leads to creation of a mutually beneficial economic bond between the companies involved in the transaction, as well as, create strong business relations between the countries involved.
Global sourcing also allows a nation to tap into the raw materials of other nations, at lower costs under the cover of trade relations (Oshri and Global Sourcing Workshop, 2010). This is very beneficial if the buying nation has limited resources, or if it is in need of preserving its resources. These are some of the reasons as to why a company based in the United States would choose to purchase items and services from foreign firms.
References
Oshri, I., & Global Sourcing Workshop . (2010). Global sourcing of information technology and business processes: Revised selected papers. Berlin: Springer.
Schneid, W. (2010). Global Sourcing – The strategic reorientation of purchasing. München: GRIN Verlag GmbH.
Sollish, F., & Semanik, J. (2011). Strategic global sourcing best practices. Hoboken, N. J: Wiley.