Managing Global Offshoring Strategies: A Case Approach (original) (raw)

2007, Journal of International Business Studies

This book provides a vibrant depiction of actual offshoring practices. The authors put forth eight cases in rich detail. These accounts of real-world scenarios highlight critical questions for academic research. In addition to eight chapters each devoted to an offshoring event at a Danish company, the text includes opening and closing remarks. The introductory chapter provides a strong summary of the phenomenon in general and the context in particular. Pyndt and Pedersen’s overarching message is that there are many different successful strategies. They use a typology to present the phenomenon in two dimensions: internalization and internationalization. Within this typology, offshoring is synon- ymous with productive activity taking place outside the home country while outsourcing is productive activity taking place outside the enterprise. The cases then reveal that economic activity may be scattered along these different dimensions – even within a single Danish firm competing globally. While the firms are all Danish, what Pyndt and Pedersen relay is applicable to other European, Asian, or American enterprises. And while the actors and events in the cases represent valid universal business situations, the cases exhibit a refreshing tone that is largely absent in most classroom cases. Further, the typical North American case deals with strategy formulation but seldom implementation or execution. Some of these cases move beyond the ‘decision point’ to provide a glimpse of what is called for, but still leave plenty of open questions for the reader to analyze. The remark in the opening pages that offshoring is not a zero sum game, i.e., that the company that offshores and the recipient country both gain, needs to recognize the losses in the ‘home’ country. The offshored part of the business involves displaced workers and inputs no longer sought in the ‘home’ country. Outsourcing decisions ‘have come under increasing scrutiny and criticism’ (Graf and Mudambi, 2005: 254). This politically charged discussion usually begins with savings in labor costs (Ramamurti, 2004). Lewin (2005: 491) offers that, ‘companies in countries with strong society/worker compacts may experience greater challenges in adopting and executing offshoring strategies.’ Less tactfully, a myopic unionized workforce (stereotypically inflexible and with high wages) may lead to its own demise.