Satellite operations save money and provide local representation for companies. They allow for multiple offices without increased costs and are equipped with access to the main company’s intranet, phone system, and email server. They also save on travel expenses and are frequently used by companies with offices abroad. Manufacturing companies can maintain headquarters in one country while creating factories and distribution centers in others.
A satellite operation is an office that is part of a larger business 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. By using these remote locations, companies can create offices in multiple locations without substantially increasing operational costs. They can also maintain a presence wherever they do business.
A satellite operation is usually equipped with access to the main company’s intranet, phone system, and email server. This is a boon for companies that employ traveling business people. Employees can access their email and remain in constant contact with their supervisors without the need to meet in person.
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 often includes moving expenses and even the closing costs associated with the new worker buying a new home in the city where the business is headquartered.
Remotely located employees can also save on company travel expenses, as satellite employees can move exclusively within the local region. The expense of a worker traveling within a 100-mile radius of their home office will typically be less than that incurred if the same employee travels from corporate headquarters to different meeting locations, potentially 1,000 miles apart or more.
This type of operation is also frequently used by companies with offices abroad. A company may maintain headquarters in one part of the world and operate multiple satellite offices in other countries. These remote locations don’t require the maintenance 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 get the added benefit of familiarizing employees with local customs. These workers can keep their nationality while working for a company in another country. They usually have a more complete understanding of local business transactions and can bring local contacts to the foreign company to increase its customer base.
The use of a satellite operation is also often employed by manufacturing companies. A company that manufactures its own products can maintain its corporate headquarters in one country while creating factories and distribution centers in those to which it usually exports. Ikea, the furniture company, for example, is headquartered 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, avoiding long transport routes and delivery times.
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