Human and Physical Influences on Global Interactions

Global interactions do not happen automatically; they are shaped by decisions of firms, governments, and individuals, and by the physical and economic geography of places. This lesson examines several of the most important human influences: the reorganization of production through outsourcing and offshoring, the movement of labor and the remittances it generates, and the role of governments and trade blocs in either encouraging or restricting flows.

Outsourcing and offshoring

Definition: Outsourcing: contracting out a business function to a separate company. Offshoring: relocating a business function to another country, whether kept in-house or outsourced to a foreign firm.

These related strategies let firms cut costs and focus on their core competencies. A company might outsource its payr