Satellite operations allow companies to save money and have local representation in multiple locations. Employees can access corporate resources remotely, saving on travel expenses and relocation costs. Foreign satellite offices provide local expertise and increase a company’s client base. Manufacturing companies can set up factories and distribution centers in countries they export to, saving on shipping costs and improving product quality.
A satellite operation is an office that is part of a larger corporate organization, but operates in a separate location. The two main benefits of maintaining this type of operation are the ability to save money and the convenience of local representation. Through the use of these remote offices, companies can set up offices in multiple locations without substantially increasing operational costs. They can also maintain a presence wherever they do business.
A satellite operation often has access to the main corporate intranet, phone system and email server. This is a boon for companies that employ traveling business people. Employees can access their email and stay in constant contact with their supervisors without the need to meet face-to-face.
Allowing employees to stay local saves money when hiring new people. For example, when a company finds a new employee they want to hire, they can hire that person from their hometown without the expense of offering a relocation package. This typically includes moving expenses and even closing costs associated with the new worker purchasing a new home in the city where the business is based.
Remotely located employees can also save the company on travel expenses because satellite employees can only travel within their own region. The expenses of a worker traveling within a 100-mile radius of his or her home office will generally be less than if the same employee travels from company headquarters to different meeting sites, potentially 1,000 miles away or more.
This type of operation is also often used by companies with foreign offices. A company may maintain headquarters in one part of the world and operate multiple satellite offices in other countries. These remote offices do not require the management costs of a large office complex, but can represent the company locally and do business on its behalf.
When companies set up a satellite operation in a foreign country, they receive the added benefit of getting employees who are familiar with local customs. These workers can keep their nationality while working for a company in another country. They typically have a more comprehensive understanding of local business relationships and can bring local contacts to the foreign company to increase its client base.
The use of a satellite operation is also often employed by manufacturing companies. A company that manufactures its own products may maintain its headquarters in one country and, at the same time, set up factories and distribution centers in those it most often exports to. Ikea, the furniture company, for example, has headquarters in the Netherlands but maintains dozens of distribution facilities around the world. The company can save on shipping costs and provide a higher quality product by avoiding long transportation routes and delivery times.
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