What is a satellite operation?

A satellite operation is usually equipped with access to the company’s main intranet, telephone system, and email server.

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. 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 company’s main intranet, telephone system, and email server. This is a boon for companies that employ traveling businessmen. Employees can access their email and stay in constant contact with their supervisors, without the need to meet in person.

Allowing employees to remain local saves money when hiring new people. For example, when a company finds a new employee it wants to hire, it can employ 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 buying a new home in the city where the company is headquartered.

Remotely located employees can also save the company on travel expenses because satellite employees can move exclusively within their local region. The expense of a worker traveling within 100 miles of their home office will typically be less than that incurred if the same employee travels from company headquarters to different meeting locations, potentially 1,000 miles or more.

This type of operation is also widely used by companies headquartered abroad. A company may maintain its headquarters in one part of the world and operate multiple satellite offices in other countries. These remote locations do not require the maintenance costs of a large office complex, but can represent the company locally and do business on your behalf.

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When companies set up a satellite operation in a foreign country, they receive the added benefit of getting employees familiar with local customs. These workers can keep their nationality while working for a company in another country. They generally have a more complete understanding of local business transactions and can bring local contacts to the foreign company to increase their customer base.

The use of a satellite operation is also often employed by manufacturing companies. A company that manufactures its own products may maintain its corporate headquarters in one country while setting up factories and distribution centers in those to which it exports most frequently. 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 by avoiding long shipping routes and delivery times.

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