Globalization And Its Influence On Offshoring (original) (raw)
Related papers
Managing Global Offshoring Strategies: A Case Approach
Journal of International Business Studies, 2007
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.
Offshoring: Dimensions and diffusion of a new business concept
Journal of Purchasing and Supply Management, 2006
In order to leverage global cost differentials, companies are increasingly turning to offshoring. Nevertheless, discussions in research and practice on offshoring are characterized by the lack of a common definition as well as a theoretically grounded explanation for this phenomenon. This article presents an explicit definition in order to provide a stringent understanding of the term offshoring along the dimensions of contractual/legal arrangement and geographic location. Further, the driving forces of offshoring are analysed on the environmental and company levels. The article closes with a discussion of managerial implications and an outlook on aspects for further research. r
Operations, Strategies and Practices, 2011
The purpose of this chapter is to contribute to the knowledge on how production offshoring and international operations management vary across cultural contexts. The chapter attempts to shed light on how companies approach the process of offshoring in different cultural contexts. In order to achieve this objective, the authors employ a qualitative methodology and compare three Danish and three Japanese manufacturing companies. On the basis of this comparative investigation, the authors find that the parent companies from both contexts employ offshoring as a remedy for the challenges of globalisation. Yet there are clear differences in how offshoring is conducted in Denmark and Japan. The main differences are outlined in a framework and explained employing cultural variables. The findings lead to a number of propositions suggesting that the process of offshoring is not simply a uniform technical-rational calculation of the most efficient organisation of activities across national borders, but it is rather specific to the parent companies' national contexts.
Offshoring: Transfer Jobs or Operations Abroad 1
International Journal of Advancement in Social Science and Humanity, 2023
As a result of global shifts in the labor market. Especially after the collapse of the former Soviet Union in 1989 and the end of the Cold War, about half of the world's labor force from China, India, Russia and Eastern Europe joined the capitalist global economy. Technological changes associated with the Internet contributed to a massive expansion of outsourcing options for outsourcing services in addition to manufacturing and strategies. The business of TNCs is relentless in its search for new efficiencies especially in the labor side where significant cost gains can be found. As a result, offshore outsourcing is no longer just an option but "an increasingly urgent survival tactic for companies in advanced economies". The offshoring trend is causing controversy as more high-paying white collar jobs are moved offshore. Although offshoring saves companies labor costs as well as other personnel-related expenses, it also contributes to creating an atmosphere of anxiety among workers who feel their jobs are threatened. Since job security is one of the most important factors in determining how employees with job vacancies will perform, the threat of offshoring can cause significant damage to employee morale. Dealing with the functional, structural and strategic aspects of the offshoring process will put human resources at the center of the offshoring discussion. But dealing with the repercussions of layoffs for employee satisfaction, hiring and retention may be the biggest challenge. THE FIRST TOPIC: THE RESEARCH METHODOLOGY The research methodology is one of the basic pillars that connects theoretical knowledge and determines the methodology, the path or the destination for all the research through defining the nature, problem, objectives and importance of the current research.
Offshoring, Outsourcing, and Strategy in the Global Firm
Debates over the merits of globalization often entail an analysis of international companies. Often seen as villains, MNCs have been blamed for the ills of globalization. Liberal economists and some international management scholars, in contrast, have seen the rise of the MNC as part of the natural process of globalization. In this issue, three articles reflect on the changing conditions of the global environment and their implications for the management of MNCs.
Managing offshoring of complex products : Strategy and capabilities
2014
Offshoring is a hot topic in the industrial and academic community over the last few years, evolving from a focus on manufacturing to product development and R&D. Offshoring refers to the process of sourcing and coordinating tasks across national borders and can include both in-house and outsourced activities performed by a supplier. There is a lot of research guiding the decision of what, where and how to offshore, but research on how to implement offshoring strategies is rare. The purpose of this dissertation is to contribute to the knowledge on how companies deal with offshoring in practice, relating to strategy, planning and routines. It discusses what type of capabilities that is needed to gain the benefits of offshoring implementations. The research builds on case studies from two multinational companies offshoring product development from Sweden to captive and offshore development centres in India and China through a series of interviews, review of business documentation and other types of active engagements over time. This research highlights how the development and implementation of offshoring can be better understood by focusing on the middle management in the organization and how they relate to the top management directives when implementing an offshoring strategy. The thesis contributes to existing theory by explaining offshoring as a process, situated in a certain context and time. It defines key routines and capabilities needed to facilitate offshoring of complex product systems. Including context, timing and sequence when analysing offshoring help explain why some organizations fail to implement offshoring initiatives.
THE MYTH AND THE REALITY OF OUTSOURCING AND OFFSHORING
2020
Outsourcing and offshoring processes have existed for a long time and have always been closely related to international business. The advent of modern means of telecommunications and transportation, among other vital factors, has enabled the companies to reach levels of outsourcing and offshoring, which we have never witnessed before. On the other hand, this massive offshoring caused a phenomenon called de-industrialisation in the once heavily industrialised countries such as the USA, Australia, UK, Canada, and subsequently to some of the EU countries and Japan. Can the USA and these others, once amongst the most industrialised countries in the world, return the decades-old trend of offshoring misfortune in their interest so that they may experience a "Manufacturing Renaissance" is the primary notion behind this publication.
Journal of Management Studies, 2005
In this essay, I discuss the implications of the debate over offshoring for our collective understanding of international business and management theories. I review several core theories in international business expansion and management strategy to assess which elements of these theories may need to be re-specified in light of the offshoring phenomenon and which aspects remain relevant. I then present normative implications and recommendations for public policy and corporate strategy, drawing from emerging insights regarding the global responsibilities of corporations. I suggest that international labour and environmental standards and corporate codes of conduct could mitigate some of the most intense concerns raised about offshoring but conclude that offshoring is likely to present challenges to societies, corporations, and stakeholders for many decades.