Relationship and Contract Issues of IT Outsourcing – Descriptive Case Studies in China Regions

In spite of the continuous increase in IT outsourcing activities globally, a major percentage of outsourcing deals failed or suffered from serious problems. In China regions where IT outsourcing practice is still at its initial stage, the situation is even serious: there lacks systematic guidance in terms of how to negotiate decent contracts and how to develop sound relationships. In view of this, the current research develops a research framework based on the theories in Economics, Management and Marketing fields, and investigates the effects of both relationship and contract on IT outsourcing success. To support the research framework, evidence was collected from two descriptive case studies conducted in Hong Kong and Mainland China. The case analysis implies the dimensionalities of relationship and contract. What is more, IT outsourcing success is mainly evaluated from the technological benefits client company could gain. A significant contribution of this study to theory is to look into IT outsourcing phenomenon with a balanced view and through an integrated theoretical lens. For practitioners, this research removes executives’ doubts about simultaneously employing both relationship (soft side) and contract (hard side) as governance mechanisms in managing IT outsourcing deals

A Study On Influencing Factors And Performance Of Logistics Outsourcing Practices Among Electrical And Electronics Firms In Malaysia

Penyumberluaran aktiviti logistik telah menjadi strategi popular bagi kebanyakan organisasi dalam memburu kecemerlangan operasi di era persaingan sengit pasaran global. Logistics outsourcing has been growing as a popular strategy for many organizations in pursuit of operational excellence despite the fierce competitive market globally

Does the logistics sector gain from manufacturing internationalisation? An empirical investigation on the Italian case

The present paper deals with the impact of manufacturing internationalisation, in the forms of international trade, cooperation agreement and FDI, on the logistics sector. Some descriptive statistics are provided for the Italian macro-areas and the logistics employment and an econometric analysis is carried out at the "regional-industry" level (20 NUTS2 regions and 11 logistics sub-sectors) with reference to the Italian case in the period 1996-2001. Results show that export and FDIs positively affect the logistics employment variation in 1996-2001, while import and cooperation agreements display a negative or not significant impact.logistics, employment, internationalisation, trade, FDI, cooperation agreement.

Offshoring and Home Country R&D

National concerns are sometimes raised against offshoring of economic activities to other countries. While most of the existing literature has focused on the effects on labor demand and productivity the effects on domestic R&D have been neglected. This is unfortunate since the decision to offshore activities also includes R&D. We use unique and rich firm level data for the Swedish manufacturing sector to analyze how offshoring impacts domestic R&D and how these effects vary with respect to target region and type of firm. The results suggest that offshoring of production alter a firm’s investments in R&D in Sweden and that a negative impact on home country R&D is confined to offshoring by non-multinationals and offshoring to Europe and EU15 countries.Offshoring; R&D; Manufacturing sector; EU15

The economic analysis of multinationals and foreign direct investment: a review.

This article provides an up-to-date, comprehensive synthesis and evaluation of the existing literatura on multinational firms and foreign direct investment. Unlike most previous reviews it combines severalinsights showing their inconsistencies and complementarities. Through a chronological description it presents the main strands since the earliest perfect competition studies from the 1960s till some new recent contributions such as the knowledge-capital model, heterogeneous firms models, and internalisation issues. The paper also offers a new perspective, by reviewing the available computable general equilibrium models that include multinationals and foreign direct investment.Multinational enterprises, Foreign direct investment, Computable general equilibrium models.

Impact of Offshore Outsourcing on Competitive Advantage of U.S. Multinational Corporations

Offshore outsourcing became a common business practice by most U.S. and Western businesses after the Internet became viable. It is expected that by 2015 the U.S. market will outsource 3.3 million employment opportunities and will pay an estimated $136 billion in salaries to Asian countries (Hemphill, 2004). Outsourcing became a necessity for corporations to reduce cost and maintain competitiveness in the marketplace, but its effectiveness in achieving superior performance and competitive advantage needs to be explored. The relationship among offshore outsourcing, market freedom, and competitive advantage is an important issue for multinational corporations to conduct business and gain competitive advantage. National culture is also a component of the analysis based upon the role that cultural perceptions play in the cultivation of relationships with foreign nationals and representative companies. The critical analysis of theoretical and empirical literature explored the factors influencing competitive advantage, investigated the impact of offshore outsourcing on competitive advantage, and identified future areas of scholarly inquiry. This literature indicated that U.S. multinational corporations use offshore outsourcing as part of their strategy to establish competitive advantages and better performance. Sources used in this paper focus predominantly on the theoretical, empirical, and historical literature relating to offshoring and outsourcing. This dissertation focuses on U.S. multinational corporations, and discusses the relationship among offshore outsourcing, national culture, market freedom and competitive advantage. The review of the literature suggests a strong level of ambiguity within the initial data. The ambiguity is the result of themes within the literature that contain contradictory subject matter, as well as conflict over how and why specific information is relevant to competitive advantage within the offshore outsourcing process. Problems of ambiguity are further exacerbated in respect to the research methodology used to approach these areas of research. Conflicting results are suggestive of flawed decision-making strategies (such as confusion of terms and limitations on the criteria concerning offshoring and outsourcing) used within the research methodology. It is also indicative of problems in isolating themes that are best applicable to these processes. Of note are problems in the empirical literature in which researchers presented conflicting opinions regarding successful application of offshore outsourcing. This indicates that increased inquiry is required into the study of offshore outsourcing to identify the themes within the literature, and to assess the overall impact of these processes on competitive advantage. The analysis of variance and simple regression results used in this dissertation indicated that offshore outsourcing has no significant impact on competitive advantage. However, a positive relationship does exist. Market freedom factors and multinational corporations\u27 offshore outsourcing are significant variables of the competitive advantage of multinational corporations. The study indicated that an increase of one unit in market freedom in China will result in an increase of competitive advantage by .37 units. Similarly, a one unit increase in market freedom in India will result in an increase of competitive advantage by .45 units

Fighting Irrelevance: The Role of Regional Trade Agreements in International Production Networks in Asia

This chapter reviews the relevant literature in order to provide an analytical framework for the analyses in the subsequent chapters. It covers some sub-topics related to the theme of this study, in particular, the theoretical approach to international production networks, key findings from empirical studies on the subject, and the role of trade policy (often understood as trade liberalization) in creating or sustaining an IPN.trade liberalization, international production networks, regional trade agreements, value chain, Asia, automotive, hard disk drive, textile and clothing, East Asia

International Sourcing, Product Complexity and Intellectual Property Rights

In this paper, we propose the technological complexity of a product and the level of Intellectual Property Rights (IPRs) protection to be the co-determinants of the mode through which multinational firms purchase their goods. We study the choice between intra-firm trade and outsourcing given heterogeneity at the product- (complexity), firm- (productivity) and country- (IPRs) level. Our findings suggest that the above three dimensions of heterogeneity are crucial for complex goods, where firms face a trade-off between higher marginal costs in the case of trade with an affiliate and higher imitation risks in the case of sourcing from an independent supplier. We test these predictions by combining data from a French firm-level survey on the mode choice for each transaction with a newly developed complexity measure at the product-level. Our fractional logit estimations confirm the proposition that although firms are generally reluctant to source highly complex goods from outside the firm’s boundaries, they do so when a strong IPR regime in the host country guarantees the protection of their technology.Sourcing Decision, Product Complexity, Intellectual Property Rights, Fractional Logit Estimation