Academic journal article Journal of Economic and Social Development

An American-Based Study Examining the Relationship between Participants' Demographic Profiles and Attitudes regarding Business Outsourcing Techniques and Strategies

Academic journal article Journal of Economic and Social Development

An American-Based Study Examining the Relationship between Participants' Demographic Profiles and Attitudes regarding Business Outsourcing Techniques and Strategies

Article excerpt

1. INTRODUCTION

Deciding to outsource a company's products or services offshore to another country is not a casual decision for any business to make. Furthermore, these offshore operational decisions pose challenges for company executives, employees, and their residing communities at large. Numerous factors go into consideration when determining to move overseas a portion of a company's organizational processes. Whitfield and VanHorsenn (2008) conveyed that the most common elements that make up this complex decision to relocate are comprised of the differing cultural sets and languages spoken in the foreign country, as well as, piracy, political instabilities, and local governance differences in the host countries.

American-based businesses struggle with the reality of saving money by moving particular operations overseas, and by keeping products and services made in the United States. Halzack (2013) stated that manufacturing jobs in America have diminished due to assembly line automation and jobs moving overseas to exploit cheaper labor teams. Additionally, many Americans express discontent by having business operations moved overseas due to this taking jobs, as well as opportunities, away from the American people. This paper examined the relationship between participants' demographic profiles and their attitudes regarding business outsourcing techniques and strategies to gain a better understanding of American employees' belief systems, in regards to, businesses engaging in outsourcing operations, particularly offshore outsourcing operations. In this paper numerous strategic dimensions of sourcing and shoring techniques and strategies are defined, however, "outsourcing" is the term that is commonly used in this study to refer to any one of these techniques. Dolgui and Proth (2013) defined outsourcing, "as the act of obtaining semi-finished products, finished products or services from an outside company if these activities were traditionally performed internally" (pp. 6769).

2. LITERATURE REVIEW

2.1. Strategic dimensions of sourcing and shoring techniques

There is a multitude of strategic dimensions associated with sourcing and shoring techniques in the marketplace, conducting business abroad, and conducting business on the home front, or near the home place. These strategic dimensions include (a) domestic outsourcing (b) insourcing (c) backsourcing (d) offshoring (e) offshore outsourcing (f) onshoring (g) nearshoring (h) strategic outsourcing (i) business process outsourcing (BPO) and (j) offshore service providers (OSPs). These sourcing and shoring techniques and strategies can be complicated to understand, but are outlined in this following section. Koku (2009) stated that domestic outsourcing is when a company decides to let go of an in-house job to go to another domestic company to perform. Nodoushani and McKnight (2012) specified that insourcing is bringing back work internally that was previously outsourced. Chadee and Ramen (2009), and Koku (2009) indicated that backsourcing is rescinding the product or service back to the home country where it came from originally. Offshoring is when a company from one country outsources work with businesses in another country by either conducting operations in the foreign country, or subcontracting this work out through outsource providers who then transfer this work overseas

Additionally, Koku (2009) reported that offshore outsourcing is a hybrid of domestic outsourcing and offshoring, in which a company totally transfers jobs to another company that is foreign-based which has no relation whatsoever to the domestic affiliate, for example, Delta Airlines is contracting out its reservation services to a call center in Manila, Philippines. Bodamer (2012) declared that onshoring is bringing jobs back to the home country, whereas, Worley (2012) accentuated that nearshoring is offshore outsourcing a percentage of a business's operations to a nearby country. …

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