Industrial Revolution: International Outsourcing in Manufacturing
Presnell, Benjamin
2006
- Submitted in partial fulfillment of the degree Master of Arts in Law and Diplomacy at the Fletcher School of Law and Diplomacy. Abstract: The purpose of this work is innovation and outsourcing; and the relationship of the two to firm success. Since companies of all types and sizes now use outsourcing to some degree, understanding the full impact of this activity on a firm's ability to innovate is ... read morecrucial. This is especially important as outsourcing gets closer to the firm's value creating activities and core competencies. Some firms are already doing this successfully; others do not. Because the ceramic tableware industry is a highly competitive consumer goods segment that miraculously continues to survive import competition, this research will look under the plate and examine outsourced manufacturing in the industry. Cracks in the fine glaze of the industry in the western economies are obvious, but outsourcing has the potential to introduce new life into old favorites that have lined the cabinets and set the table for generations. How a firm decides to implement outsourcing dictate whether this proposition pays. Using case studies and a decision framework, the paper establishes an integrative way to evaluate offshore outsourcing. The decision framework, comprised of key economic and business strategy theories, dictates a decision to outsource when the firm is able to maximize its ability to internalize key aspects of the outsourcing. It also dictates a set of criteria from innovation theory that firms will seek the strongest appropriation models available when outsourcing in order to minimize the loss of innovation sources. Together, these are applied to the case study firms for analysis. The conclusion this paper draws is the need for businesses to understand fully the strategic value of outsourcing, but in the context of the individual firm. Unless the decision is fully vetted and part of a larger strategy for competitive advantage, moving production outside the firm just delays the inevitable. Such a failure is avoidable.read less
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- 6h441542x
- Component ID:
- tufts:UA015.012.DO.00131
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