...International Business All rights reserved 0047-2506 www.jibs.net Why are companies offshoring innovation? The emerging global race for talent Arie Y Lewin1, Silvia Massini2 and Carine Peeters3 The Fuqua School of Business, Duke University, Durham, USA; 2Manchester Business School, University of Manchester, Manchester, UK; 3 Solvay Brussels School of Economics and Management, Brussels, Belgium Correspondence: AY Lewin, The Fuqua School of Business, Duke University, 1 Towerview Drive, Box 90120, Durham, NC 27708, USA. Tel: þ 1 919 660 7654; Fax: þ 1 919 660 7769 1 Abstract This paper empirically studies determinants of decision by companies to offshore innovation activities. It uses survey data from the international Offshoring Research Network project to estimate the impact of managerial intentionality, past experience, and environmental factors on the probability of offshoring innovation projects. The results show that the emerging shortage of highly skilled science and engineering talent in the US and, more generally, the need to access qualified personnel are important explanatory factors for offshoring innovation decisions. Moreover, contrary to drivers of many other functions, labor arbitrage is less important than other forms of cost savings. The paper concludes with a discussion of the changing dynamics underlying offshoring of innovation activities, suggesting that companies are entering a global race for talent. Journal of International Business Studies (2009) 40...
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...Department of the Parliamentary Library INFORMATION AND RESEARCH SERVICES Current Issues Brief No. 18 2000–01 Outsourcing—For and Against ISSN 1440-2009 Copyright Commonwealth of Australia 2001 Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means including information storage and retrieval systems, without the prior written consent of the Department of the Parliamentary Library, other than by Senators and Members of the Australian Parliament in the course of their official duties. This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document. IRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public. Published by the Department of the Parliamentary...
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...the traditional competitors such as Canon and HP, but also from the new entrant of information technology such as portable document format (PDF). The developing in IT is the major negative impact of the whole copier industry. In today’s business world, most of the companies seeking a low-cost strategy in order to increase companies’ profit. The digital document requires less paper that can lower the cost in paper. Also the PDF document is easier to store compare to the traditional way that using folder to store paper document. PDF can send by email, and people can view PDF documents on the screen. The traditional copier no longer a necessary office equipment in today’s business world. According to the Porter’s competitive model. Xerox’s network rivals: Canon and HP are facing the new challenger (new entrant) PDF. PDF also the substitute product and service, which impact the whole copier industry. The bargaining power of buyers is rising. Xerox has several response activities in this matter. The company started to focus on business service market since 2003. Today’s Xerox becomes the world’s leading enterprise for business process and document management company. The company provides Business Process Outsourcing (BPO), Information Technology...
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...1.0 Introduction First of all, outsourcing can be regard as finding an outside or external vendor to conduct all or certain part of an organisational activity and this method is usually practiced by Transnational Corporations in their business operations due to cost constrain (Ashley E, 2008). (Please refer to appendix 1.0 for more information on Transnational Corporations). Furthermore, the main factor that forces many companies to be more low cost oriented is due to the massive pressure of the current competitive market and also the destructive price wars causes by globalisation that has been circulating in the market ever since the pre-1900s era (Henry A, 2008). (Please refer to appendix 1.0(A) for more information on History Of Outsourcing). In addition to that, by cutting cost in any way can eventually effects the specific company`s position in the market and that is why many companies also tend to choose those low wage countries in Asia for the outsourcing of their non-core business activities (Ashley E, 2008). The non-core business activity that the companies usually seek for outsourcing will be ranging from packaging and distribution, assembly and many more. Thus, through the existence of outsourcing ultimately enabled companies to focus on the prospective directions of activity, utilise the available resources efficiently, development of core competencies and to gain competitive advantage as well (Lacity MC & Willcocks LP, 2001). In accordance with that, the first...
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...Disadvantages of outsourcing: the disadvantages of outsourcing especially offshore outsourcing mainly centralizes on the real-time information and data sharing. It greatly affects the information that is being shared to the main office to and from the business outsource. Outsourcing has a great risk in lack of proper communication and cultural differences. Cultural barriers will greatly affect your most important resource, your man-power. Data and idea theft is also a great risk factor since outsourcing is basically investing your ideas and data to another company. Fraudulent claims of your company will not be that strong especially if the outsourced country is continents away both from where you are and the laws they have in the matter. Lack of control as to the outsourced people would definitely be of a huge factor because your company is not actually controlling the outsourced people since they are employed by the outsource company they are the one who gives the ultimatum to the man-power they have employed. So with this the expected outcome that your company needs are not always reached and quality of service that they provide may not be of what you have set for them. It also would be very time and asset consuming as you would need to find an affordable and high quality service provider. Instead of precious time being spent on other important matters like improvement of service in your company and ideas where the company can invest their time and assets in, it...
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...rights reserved Printed in Great Britain S0263-2373(98)00040-1 0263-2373/98 $19.00 0.00 The Impact of Corporate Outsourcing on Company Value DAVID J. BRYCE, Wharton School, University of Pennsylvania MICHAEL USEEM, Wharton School, University of Pennsylvania Companies worldwide are expanding their use of outsourcing for services and products. This article appraises what is known about the impact of outsourcing on company value, and the emergent picture is not an unblemished one. Company managers frequently complain about the downsides, some companies have retrieved what they had sourced out, failures can be seen here and there, and the long-term potential consequences of outsourcing too much are yet to be seen. Still, the weight of the research evidence indicates that, when well designed and well managed, outsourcing reduces operating cost, enhances competitive strategy, and enlarges shareholder value. © 1998 Published by Elsevier Science Ltd. All rights reserved Many observers mark the beginning of the contemporary surge of company outsourcing with Eastman Kodak’s decision in 1989 to source out its entire information management to IBM, Businessland, and Digital Equipment Corp. Since this deal’s execution, now almost a decade ago, outsourcing has become a standard management device at many US firms, and corporate expenditures on it have rapidly accelerated. Symptomatic of the trend, companies signed major new contracts for information outsourcing in 1994 worth $11 billion; in 1995...
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...In the world today the information technology has changed dramatically; however with the changes comes risk especially when it entail outsourcing to save the organizations thousands of dollars. According to this article it states the following” IT outsourcing is particularly suited for companies which are in the midst of launching a campaign, product, or new merger or acquisition and need an immense amount of technical help in a short period of time (IT Outsourcing 2011). IT outsourcing can lead to opportunities for other positions in a business but, unfortunately, IT personnel may not be able to retain a position with the company after IT outsourcing is put into place. When IT outsourcing occurs, it is important to be proactive in assisting the employees who lose their positions. There are several ways to do this, but some of the best methods to deal with lay-offs from IT outsourcing is to coordinate with the agencies that can offer helpful resources. These resources may include unemployment benefits, local job fairs, and job search seminars. Utilizing these groups to help employees find new positions, it sends a positive message that the employees are important to the business and their efforts are appreciated (IT Outsourcing 2011). Definition Information technology outsourcing can be defined as the process whereby a business enters into a relationship with an outside vendor to provide IT services to the business. The business could delegate any one aspect of its IT function...
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...skills and attitudes. Finally, there are a large number of US companies buying professional services from Asian countries. Clearly, skilled workers will be found and hired wherever they are. Countries, such as, India, Pakistan and China are good labor pools (Prahalad 2005.) It follows that multinational and global companies will find skilled labor overseas and start operations or buy services in foreign lands. Qua hay The influence of outsourcing should be recognized. Whirlpool, for instance, has a global network, supplies washing machines from Germany, and microwave ovens designed in Sweden that are and made in China while other appliances come from Brazil. Global companies develop first-rate centers of production and design in various countries. Countries that are abundant in human capital with a supplier base have a chance to become first-rate centers. Within this framework, designed to promote a global network, financing depends on corporate profits and funds owned by prospective partners. Du Pont, for instance, raises funds through joint ventures but retains corporate control by retaining at least 51% of the share. The importance of outsourcing and globalization is that some market imperfections are removed. When imperfections are removed, prices converge. This means that factor price differentials in two different places tend to disappear. Such an outcome is built on two assumptions. The first one is that there are...
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...The Knowledge Community HfS Research Collaborative Sourcing Intelligence& IT for Global Business Outsourcing Smart Governance Disruptive Technologies Insight. Advice. Benchmarking. Services State of the Outsourcing Industry 2013: Presentation to Genpact, March 5th 2013 Phil Fersht, Founder and CEO, HfS Research phil.fersht@hfsresearch.com Copyright © 2013 HfS Research Ltd. State of the industry 2013 - Agenda • Market Size and Forecast • Key Industry Dynamics • Competitive Landscape • Market Wrap Copyright © 2013 HfS Research Ltd. Outsourcing Smart Governance Disruptive Technologies 2 State of the industry 2013 - Intro • • • • • • Conducted December 2012 / January 2013 The largest-ever quantitative industry study covering both IT and business process outsourcing Respondents included 1355 stakeholders across enterprise buyers, service providers and consultant/influencer organizations The aim of the survey was to understand their views, observations and intentions for 2013 and beyond, when it comes to outsourcing IT and business processes Survey was conducted with the support of KPMG This presentation contains a set of slides with the top level results of the survey Copyright © 2013 HfS Research Ltd. Outsourcing Smart Governance Disruptive Technologies 3 Key Highlights: BPO Adoption and Outlook: • • • • • • • Deal activity rebounds Market forecasted to grow Attitudes towards BPO have gone “back to basics” Attitude of buyers...
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...Phida HR OUTSOURCING The Human Resources department or support systems are responsible for personnel sourcing and hiring, applicant tracking, skills development and tracking, benefits administration and compliance with associated government regulations. A human resources department is a critical component of employee well-being in any business, no matter how small. HR responsibilities include payroll, benefits, hiring, firing, and keeping up to date with state and federal tax laws. Any mix-up concerning these issues can cause major legal problems for your business, as well as major employee dissatisfaction. But small businesses often don't have the staff or the budget to properly handle the nitty-gritty details of HR. Because of this, more and more small businesses are beginning to outsource their HR needs. HR outsourcing services generally fall into four categories: PEOs, BPOs, ASPs or e-services. The terms are used loosely, so a big tip is to know exactly what the outsourcing firm you're investigating offers, especially when it comes to employee liability. A Professional Employer Organization (PEO) assumes full responsibility for your company's HR administration. Business Process Outsourcing (BPO) is a broad term referring to outsourcing in all fields, not just HR. Application service providers (ASPs) host software on the Web and rent it to users--some ASPs host HR software. E-services are those HR services that are web-based. Both BPOs and ASPs are often referred...
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...OXFORD REVIEW OF ECONOMIC POLICY, VOL. 22, NO. 4 DOI: 10.1093/oxrep/grj029 OUTSOURCING AND OFFSHORING: IMPLICATIONS FOR PRODUCTIVITY OF BUSINESS SERVICES MARI SAKO Saïd Business School, Oxford1 This paper reviews the implications of outsourcing and offshoring for the productivity of business services in the UK. Official statistics indicate that business-service productivity has grown by over 20 per cent in the last 7 years at the same time as employment grew by 20 per cent. The paper considers possible factors that account for the simultaneous growth of employment and productivity. First, we discuss outsourcing and offshoring, and their role in enhancing productivity through greater specialization, standardization, and consolidation of business processes, and a shift to higher value-added services. Outsourcing of business services is interpreted as part of corporate restructuring, namely as the unbundling of corporate functions as well as vertical disintegration. Second, as some services become more like products, both low-skilled and high-skilled jobs are subjected to productivity growth through standardization and digitization. It is argued, however, that the future of business-service productivity is on a knife-edge, depending on the mix of two sources of productivity enhancement—namely greater standardization and capturing value from customized solutions. I. INTRODUCTION Services have become a dominant part of the UK economy, accounting for 66 per cent of GDP,...
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...Outsourcing is an established business tool that uses the best combination of low cost but high quality local and global resources in order to deliver the best service or product to customers. Using outsourcing services of an outsourcing vendor, small and large companies use one outsourcing service, or more than one outsourcing service, to provide a better customer experience. While outsourcing is an attractive proposition, users of outsourcing services should give careful consideration to thepros and cons of outsourcing while receiving outsourcing services from outsourcing destinations such as India, China, the Philippines, and Brazil, etc. Sure, outsourcing is a way to save money, but there can also be unexpected costs. The decision to outsource is certainly not one that any business or non-business organization should enter into lightly. To arrive at the right decision, users of outsourcing services should analyze the following advantages and disadvantages of outsourcing, as only they are in the best position to ascertain whether a particular outsourcing service or outsourcing services should be outsourced to an offshore outsourcing vendor. The most significant advantages of outsourcing are: Cheaper manpower and outsourcing Manpower is possibly the most important resource in any company, and is also the constant resource that come at a high cost. For this reason, small and large companies undertake outsourcing services to India of various types. Professionals in outsourcing...
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...typically pick up a tape recorder and take notes. Local workers pick up the tapes, transcribe the notes, and return them within one to two days. Instead, that doctor could send his notes as a digital file when he leaves work at 5 p.m. to an Indian worker who, in that part of the world, is just coming into work. By the time the doctor returns the next morning his notes are transcribed." Subramani's example raises a point about outsourcing that is often at the root of questions today If someone in India is transcribing the doctor's notes, doesn't that take away a job from someone in the United States? It's hard to say how many jobs have gone overseas because United States companies are not required to maintain such statistics. Forrester Research estimates that the current number ranges anywhere from 12,000 to 20,000 jobs a month. Add that to the 2 million jobs that have already gone overseas since 1983 and it sounds pretty significant. But in a global economy, U.S. businesses must remain competitive. Some...
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...http://prezi.com/_jqvvjxplhzb/present/?auth_key=iarja6j&follow=zkhuy25kmoai JAMES COOK UNIVERSITY SINGAPORE TOPIC: [pic] Student name : Le Phuong Tung Student ID : 12867187 Teacher : Mr. Trevor Carty Class : ELPP – 3B Words count : : 1646 James Cook University Singapore, September 3rd 2013 TEACHER’S COMMENT ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. ………………………………………………………………………………………………….. CONTENTS TOPIC: i TEACHER’S COMMENT ii CONTENTS iii IMAGE CATALOGUE iv THANK YOU v I. INTRODUCTION 1 II. BACKGROUND INFORMATION 2 1) The concept of Outsourcing and Human Resources Outsurcing 2 2) The situation of HRO in Vietnam 2 III. THE IMPACT...
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...Abstract LPO (Legal Process Outsourcing) is currently one of the fastest growing industry as it provide low-cost and time saving services. This study aims to know about LPO, specifically its origin, the services it provide, its quality and satisfaction, its impact in the legal industry and its status nowadays. The theories related to the topic like Transaction Cost Theory and Value Chain Analysis are discussed in theoretical framework. In addition, this research uses descriptive type of design as a method. Finally, conclusions are formed based on the data collected from the instruments used relevant to the topic such as PDF’s, books, and articles from the internet. CHAPTER I Introduction Legal industry operates in a global market place, and both clients and firms are seeking to understand how global outsourcing can add to their business. Lawyers have always outsource work to other lawyers with specialist knowledge. Firms are using their offices in other jurisdictions to do their legal work and offering that services to other firms. (The Law Society, 2011). In the Philippines, Legal Process Outsourcing (LPO) is one of the fastest growing sector in Business Process Outsourcing (BPO) industry. Many LPO’s have out growth due to increasing demand for legal outsourcing and off shoring abroad. Various U.S law firms chooses Philippines because of its highly educated lawyers who are experts in their fields, high English proficiency, similar with the US legal systems, lower labour...
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