OFFSHORING FOR COMPANIES SPECIALISED IN SOFTWARE FOR AUTOMOTIVE

Marius GAL, Claudiu V. KIFOR

Abstract


The scope of this paper is to present the reasons why an automotive company, in the context of global market, should do offshoring for its Research and Development department or its software departments. Also this paper reviews what has been written until now regarding the offshoring process. It will present the motives why a company did the offshoring process, how a country and a region should be selected based on certain criteria. Here are presented the biggest four categories of reasons why a big company is starting or expanding the internationalization.  Advantages and disadvantages are presented, in order to know both the advantages and the potential risks. In most of the studies, the offshoring is discussed from the manufacturing point of view, but these valuable lessons can be applied to the software or IT department from a car maker. Strategic options are presented to have a clear view about how to approach this process. The main method used in this article is the qualitative research on what other authors have written until now. The goal of this paper is to present why and how offshoring can help a company from the automotive sector to reduce the costs and to obtain a higher quality in the final products.

Full Text:

PDF

References


Becker, S.O., Ekholm, K., Muendler, M.-A., Offshoring and the onshore composition of tasks and skills, Journal of International Economics 90, 91–106, 2013.

Carmel, E.: The New Software Exporting Nations: Success Factors, The Electronic Journal of Information Systems in Developing Countries 13(4), 1–12 (2003)

Chiara Franco and Rentocchini, Francesco and Vittucci Marzetti, Giuseppe, Why Do Firms Invest Abroad? An Analysis of the Motives Underlying Foreign Direct Investments, December 15, 2008, Available at SSRN: https://ssrn.com/abstract=1283573 or http://dx.doi.org/10.2139/ssrn.1283573.

Bernhard Dachs, Bernd Ebersberger, Steffen Kinkel and Oliver Som, The Effects of Production Offshoring on R&D and Innovation in the Home Country, Fraunhofer ISI Discussion Papers Innovation Systems and Policy Analysis No. 39 ISSN 1612-1430 Karlsruhe, January 2014.

Davide Castellani, Sandro Montresor, Torben Schubert, Antonio Vezzani, Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide, https://doi.org/10.1016/j.ibusrev.2016.10.003 International Business Review Volume 26, Issue 3, pages 405-416, June 2017.

Ellram, L.M., Tate, W.L., Petersen, K.J., Offshoring and reshoring: an update on the manufacturing location decision, J. Supply Chain Manag. 49 (2), 14–21

Farrell, “Smarter off shoring”, Harvard Business Review, pp.84-92, June 2006.

Fel Fabienne, Griette Eric, An Analysis of the Off shoring Decision Process: The Influence of the Company's Size, Procedia - Social and Behavioral Sciences, Volume 58, Pages 596-605, 12 October 2012, https://ac.els-cdn.com/S1877042812044990/1-s2.0-S1877042812044990-main.pdf?_tid=a34cb648-e952-11e7-bc62- 00000aab0f6b&acdnat=1514192859_4fdb7b5969afcc8f79396a316a801882 .

Fillis, I., “Small firm internationalization: an investigative survey and future research directions”, Management Decision, 39 (9), 767-783, 2001.

Kinkel S., Maloca S. A German perspective, Journal of purchasing and Supply Management, (15), 154-165, 2009.

Knudsen, MP, and Servais P, "Analyzing internationalization configuration of SMEs: the purchasers' perspective", Journal of Purchasing & Supply management, 13 (2), 137-151, 2007.

Moatti V., “Sourcing: gare aux surcouts des pays a bas couts”, L’Expansion Management Review, juin, number 133, 28-33, 2009.

Motohashi K., International R&D Management, In: Global Business Strategy, Springer Texts in Business and Economics. Springer, Tokyo, 2015, https://doi.org/10.1007/978-4-431-55468-4_11.

Patra, S.K. & Krishna, V.V. J. open innov.: 7. https://doi.org/10.1186/s40852-015-0008-6 ; Online ISSN2199-8531; Springer Singapore, 2015.

Pai R.U., Banerji S., Garza-Reyes J.A., Lim M., Kumar V., Selection and Ranking of Low Cost Countries for Outsourcing and Offshoring in the Manufacturing Sector. In: Prabhu V., Taisch M., Kiritsis D. (eds) Advances in Production Management Systems. Sustainable Production and Service Supply Chains. APMS 2013. IFIP Advances in Information and Communication Technology, vol 414. Springer, Berlin, Heidelberg, 2013.

Simpson, H., How do Firms’ Outward FDI Strategies Relate to their Activity at Home? Empirical Evidence for the UK, The World Economy 35, 243-272, 2012.

Simpson, H., Investment abroad and labour adjustment at home: evidence from UK multinational firms, Canadian Journal of Economics 45, 698-731, 2012.

Song N., Platts K. and Bance D., “Total acquisition cost of overseas outsourcing / sourcing: a framework and a case study”, Journal of Manufacturing Technology Management, vol. 18, number 7, 858-875, 2007.

Gözde YILMAZ, Anna BENGTSON, Amjad HADJIKHANI, Internationalization of firms from new emerging markets in other new emerging markets: Opportunity development of a Turkish Firm in Romania, http://www.sciencedirect.com/science/article/pii/S1877042815039592, World Conference on Technology, Innovation and Entrepreneurship, WOCTINE, May 28-30 2015. Uppsala University, Business Studies Deparment, Kyrkogårdsgatan 10, 753 13 Uppsala.

https://www.strategyand.pwc.com/media/file/2015-Global-Innovation-1000-Fact-Pack.pdf

Patra, S.K. & Krishna, V.V. J. open innov. (2015) 1: 7. https://doi.org/10.1186/s40852-015-0008-6


Refbacks

  • There are currently no refbacks.


JOURNAL INDEXED IN :