Offshoring of German High-tech IT Jobs to Low-wage Countries

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GRIN Verlag, Jul 28, 2007 - 84 pages
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Master's Thesis from the year 2004 in the subject Business economics - Business Management, Corporate Governance, grade: 60 points = 2,5 (B), Anglia Ruskin University (Ashcroft International Business School), course: Master Thesis, 43 entries in the bibliography, language: English, abstract: The relocation of jobs to low-wage countries (offshoring) has been a widely used approach of European companies in search of competitive advantage during the recent decades. Whereas in the past production and manufacturing were affected, now the services industry starts to use this option. IT and telecommunications are among the most important services branches of the Western European economies today. Offshoring is becoming a macro-economic problem in these countries because a lot of jobs will be lost. This dissertation researches the impact of offshoring on the German IT industry. Furthermore it points out the consequences for project management, quality assurance and human resources management. It highlights the pros and cons for the offshoring companies as well as the concerned employees. This research starts with a detailed literature review that clarifies important key terms and outlines the key findings of other authors. After that the methodology chapter describes the theoretical framework of this dissertation. Within the scope of this research a survey was conducted among 335 German IT companies. As the surveyed companies are primarily small and medium-sized enterprises (SME) it ascertains the attitudes of this type of firms towards offshoring. The subsequent case study of the telecom supplier Alcatel shows the point of view of a global player on offshoring. At the end, the analysis of the results of the survey and the conclusions from the case study lead to the recommendations for large companies, SMEs and the affected IT employees. The key finding of this dissertation is, that offshoring is a growing trend that n
 

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Page 5 - The point has been made in the previous paragraph that a firm will tend to expand until the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction by means of an exchange on the open market or the costs of organizing in another firm.
Page 5 - Law states that the usefulness, or utility, of a network equals the square of the number of users.
Page 59 - Global Information Technology Outsourcing: In Search of Business Advantage. New York: John Wiley & Sons.
Page 5 - Firms should only conduct those activities internally that cannot be performed more cheaply in the market or by another firm. Thus a firm will expand precisely to the point where "the costs of organizing an extra transaction within the firm becomes equal to the costs of carrying out the same transaction by means...
Page 5 - This trend is sure to accelerate because digitisation has cut transaction costs all the way to zero in some cases. Once a product or service is in place to be sold on the Internet, for example, there is zero cost for each additional transaction.
Page 21 - Reality is objective and singular, apart from the researcher Reality is subjective and multiple as seen by participants...
Page 4 - ... benefits that exceed those of competing products (differentiation advantage). Thus a competitive advantage enables the firm to add value for its customers and superior profits for itself.
Page 7 - These core competencies are the source of competitive advantage and enable the firm to introduce an array of new products and services.
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