Management Information System (MIS) Practice Exam

Which of the following is an example of nearshoring?

1. British Airways moves customer relations to India.

2. Parts of airplanes designed in Moscow.

3. McKinsey sets up research in India.

4. T-Mobile moves development from India to the Czech Republic.

The correct answer is: T-Mobile moves development from India to the Czech Republic.

Nearshoring refers to the practice of relocating business operations to a nearby country, typically to improve efficiency and reduce costs while benefitting from geographical proximity and cultural similarities. The chosen answer illustrates this concept well, as T-Mobile's decision to move development from India to the Czech Republic signifies a shift of operations to a location that is relatively closer in terms of travel time and business hours, especially for a company based in Europe. This transition can lead to advantages such as better communication, reduced time zone challenges, and lower shipping costs if physical goods are involved. The Czech Republic, being in Central Europe, shares a closer geographic and, often, cultural proximity with T-Mobile's primary markets compared to India. In contrast, the other scenarios involve moving operations to countries that are farther away or do not fit the definition of nearshoring. For instance, British Airways moving customer relations to India represents offshoring, as it transfers operations to a distant country. Similarly, airplane parts designed in Moscow do not reflect the nearshoring concept, as it doesn't indicate a move of operations closer to the home base. Finally, McKinsey setting up research in India also falls under offshoring, as it involves expanding operations to a country that is not geographically close to