In corporate environment, Job Shadowing is mainly used for New Job training or On-the job training.

When one team member is moving out, during knowledge transfer, the new person can sit and work side by side with team member moving out. By shadowing the person there is lot of tacit knowledge can be gained, which otherwise is not possible by reading documentation.

How the person handles phone calls
How to handle stakeholders
What applications are used and how much time it takes to complete a given task
How the person plan their day
Which tasks are priority and tasks which can be put on back burner.
Idiosyncrasies of the work / application / job

Above details cannot be documented always, just by being with the person from morning to evening a lot can be learnt.

See the article from Wikipedia below

Job Shadowing is a popular on-the-job learning, career development, and leadership development intervention. Essentially, Job Shadowing involves working with another employee who might have a different job in hand, might have something to teach, or can help the person shadowing him or her to learn new aspects related to the job, organization, certain behaviors or competencies. Organizations have been using this as a very effective tool for learning. Some of the applications of job shadowing are the following:

New Job Training: Consider an individual planning to take up a different role in the same organization. The individual may be asked to shadow the current incumbent for a couple of days to months to get a better idea of his or her role, as well as understand the particulars of the same without the commitment of the responsibility. This helps the individual to be more confident, aware, and also better prepared to take up the role. For the organization it reduces the chances of failure and reduces the time required for the individual to be fully productive.
Career Development: With multiple options available for somebody to grow in an organization, job shadowing can help to get a better sense of options available and the required competencies for the same. An employee may shadow senior employees in various positions/functions to appreciate and get a better idea about what it takes to build a career there.
Developing Expertise: At the core of Job Shadowing is its ability to transmit knowledge and expertise to another person. By doing a planned work, job shadowing can support knowledge management and ensuring that deep expertise and knowledge are not lost.
Leadership Development: Many organizations use job shadowing as an effective tool for leadership development. Aspiring leaders are given opportunities to shadow senior leaders and learn from them. It effectively complements classroom learning and aspiring leaders get to experience first hand what it takes to be a leader.
Job Shadowing helps both parties to learn and exchange ideas. It helps in networking, exploring opportunities, giving/receiving feedback, and collaboration with different departments.