The profits and perils of international outsourcing

Bean, LuAnn

doi:10.1002/jcaf.10193

Cited by 8 publications

(3 citation statements)

References 1 publication

(1 reference statement)

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“…Firms outsourcing internationally can gain access to better services, tap into higher‐quality international talent and bigger world markets (Gilley and Rasheed, 2000). They may experience lower turnover rates (Bean, 2003) and have lesser staff management problems, and improved consistency of service (Lysons and Farrigton, 2006). In the SME context, the core competence approach can assist firms to increase efficiency, free up or borrow resources and retain flexibility, gain access to unique resources and capabilities from abroad, expand relations with strategic partners and serve customers more efficiently (Gregorio et al , 2009).…”

Section: The Core Competences Approachmentioning

confidence: 99%

“…From the strategic management perspective, there are a number of studies which discuss the increasing significance of outsourcing issues (Simchi‐Levi et al , 2003; Mclvor, 2005; Shy and Stenbacka, 2005). However, studies on offshore outsourcing (Doh, 2005; Ellram et al , 2008; Kotabe, 1992) and manufacturing outsourcing (Gilley and Rasheed, 2000; Bean, 2003; Beaumont and Sohal, 2004; Mclvor, 2005; Rasheed and Gilley, 2005, Li et al , 2008) have focused primarily on large enterprises (LEs). More recently, scholars have begun to pay attention to the offshore outsourcing of professional services (Ellram et al , 2008; Gregorio et al , 2009).…”

Section: Introductionmentioning

confidence: 99%

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What motivates manufacturing SMEs to outsource offshore in China?

Sinha

Akoorie

Ding³

et al. 2011

Strategic Outsourcing: An International Journal

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PurposeThe purpose of this paper is to focus on the motivations for offshore outsourcing encountered by manufacturing small and medium‐sized enterprises (SMEs) and their suppliers in China. The paper explores the motivations and challenges encountered by SMEs choosing to outsource their manufacturing activities and why their suppliers engage with them.Design/methodology/approachA qualitative case study method was utilized. The authors obtained perspectives of SME managers as well as the suppliers for each of the cases, conducting in‐depth interviews in order to obtain comprehensive information about their outsourcing activities. Then, cross‐case analysis was carried out using content analysis techniques to identify key themes for the motivations to undertake offshore outsourcing.FindingsThe results showed that the first rationale for offshore outsourcing relates to increasing efficiency and labor cost reduction while holding quality constant. The second rationale is to maintain flexibility in resource allocation providing both manufacturing SMEs and their suppliers with an opportunity to enter new markets. For both manufacturing firms and their suppliers building a relationship through networks and alliances was the key to the success (learning orientation) of the partnership.Practical implicationsThe managerial implications of the findings are that first, from the perspective of client firms, the most important factor for success in manufacturing offshore outsourcing was maintaining good relationships with suppliers. The benefits of having close relationships with suppliers for outsourcing firms helped them to secure the quality of their products. The second managerial implication is from the perspective of the supplier firms. Supplier firms which were also aware of the transaction cost implications of their delivery while improving their own international image by supplying international clients. The evidence supplied suggests that supplier firms can benefit from using networks to assist them to gain international exposure.Originality/valueWhile there are numerous studies on offshore outsourcing by multinational enterprises (MNEs) and large enterprises, there are relatively fewer studies on manufacturing offshore outsourcing by SMEs. Using the three theoretical lenses of the transaction cost approach, the core competences and the alliances, networks and internationalization approach, the paper offers insights on the reasons for and outcomes of a group of SMEs decision to undertake offshoring‐manufacturing activities in China. Also, the paper examines the manufacturing offshore outsourcing issues from the perspective of the suppliers to these SMEs.

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Section: The Core Competences Approachmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

What motivates manufacturing SMEs to outsource offshore in China?

Sinha

Akoorie

Ding³

et al. 2011

Strategic Outsourcing: An International Journal

View full text Add to dashboard Cite

show abstract

“…From a firm perspective, many authors have described the best way to manage the outsourcing process (Schniederjans et al 2005;Franceschini et al 2003;Bean 2003). Others have taken a national or international perspective on efficiency, a view especially taken by economists (Blinder 2006).…”

Section: Defining An Ethical Ground For Offshoringmentioning

confidence: 99%

Fair Shares: A Preliminary Framework and Case Analyzing the Ethics of Offshoring

Gordon

Zimmerman

2009

Sci Eng Ethics

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Much has been written about the offshoring phenomenon from an economic efficiency perspective. Most authors have attempted to measure the net economic effects of the strategy and many purport to show that "in the long run" that benefits will outweigh the costs. There is also a relatively large literature on implementation which describes the best way to manage the offshoring process. But what is the morality of offshoring? What is its "rightness" or "wrongness?" Little analysis of the ethics of offshoring has been completed thus far. This paper develops a preliminary framework for analyzing the ethics of offshoring and then applies this framework to basic case study of offshoring in the U.S. The paper following discusses the definition of offshoring; shifts to the basic philosophical grounding of the ethical concepts; develops a template for conducting an ethics analysis of offshoring; applies this template using basic data for offshoring in the United States; and conducts a preliminary ethical analysis of the phenomenon in that country, using a form of utilitarianism as an analytical baseline. The paper concludes with suggestions for further research.

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