Peter D. Ørberg Jensen

Offshoring in Europe - Evidence of a Two-Way Street from Denmark

Based on a large Danish survey of companies in tradable goods and services sectors, this working paper presents the results of offshoring and its impact on jobs, adding new perspectives to the globalization debate. Globalization entails a cross-border flow of jobs, but contrary to the mainstream media portrayal of globalization, it is not a one-way but a two-way street. In 2002–05 more jobs were created as a result of offshoring of activities into eastern Denmark from companies outside Denmark (i.e., inshored to Denmark) than were eliminated due to offshoring from companies in the Danish region. Overall, the employment effects of both offshoring and inshoring were found to be limited to less than 1 percent of all jobs either lost to offshoring or gained via inshoring. For Denmark, the worries in purely numerical terms regarding the employment effects of globalization seem overly alarmist. However, the trends revealed in the study do pose challenges for low-skilled workers—the group most negatively affected—and for highly skilled specialists, who face pressure to constantly upgrade their skills. Policy implications can be drawn in view of our results to ensure that labor markets are able to meet the demands of globalizing firms.

Value creation logics and internationalization of service firms

Purpose – While mainstream theories in international business and management are foundedeither explicitly or implicitly on studies of manufacturing firms, prior attempts to develop theoryon the internationalization of service firms are sparse and have yet to establish solid andcomprehensive frameworks. The thrust of this study is that value creation logics, a constructoriginally developed by Stabell and Fjeldstad (1998) can assist us in better understanding why and how service firms internationalize. The authors extend this construct and propose that the internationalization of service firms must be based on a thorough understanding of the fundamental nature of these firms. Design/methodology/approach – Theoretical study. Findings – The authors put forward propositions concerning the pace of internationalization and the default foreign operation modes in service firms. Research limitations/implications – The use of value creation logics can be a useful complement to the conventional approaches to the stud...

The Offshoring Challenge: Strategic Design and Innovation for Tomorrow’s Organization

Exploring Layers of Complexity in Offshoring Research and Practice.- Offshoring Activities Impact A Companys Business Model: The Case of BBVA and Banco Santander.- Entrepreneurial Globalization: Lessons from the Offshoring Experiences of European Firms.- Tracking Offshoring and Outsourcing Strategies in Global Supply Chains.- Exploring Processes and Capabilities in Offshoring Intermediation.- Offshoring And Outsourcing Of Customer-Oriented Business Processes: An international transaction value model.- Offshoring White-Collar Work: An Explorative Investigation of the Processes and Mechanisms in Two Danish Manufacturing Firms.- SMEs De- Or Reorganizing Knowledge When Offshoring?.- The Dual Role of Subsidiary Autonomy in Intra-MNC Knowledge Transfer.- The Challenge of R&D Offshoring: Implications for Firm Productivity.- Industrial R&D Centers in Emerging Markets: Motivations, Barriers and Success Factors.- Towards a Flexible Breathing Organization: R&D Outsourcing at Bayer.- The Service Offshoring Code: Location Efficiencies for German Firms.- The Exit Advantage: Overcoming Barriers to National Exit.- Climate Change and the Offshoring Decision: Risk Evaluation and Management.- Do Expectations Match Reality When Firms Consider The Risks Of Offshoring? A Comparison of Risk Assessment by Firms with and Without Offshoring Experience.- Offshoring of Innovation: Global Innovation Networks in the Danish Biotech Industry.- Global Operations Coevolution: Hidden Effects and Responses.- Transformations of Mobile Telecommunications Supplier Networks.- Broadening the Conceptual and Phenomenological Scope of Offshoring.- The Complexity of Offshoring. A Comparative Study of Mexican Maquiladora Plants and Indian Outsourcing Offices from an Institutional-Prospect Theory Perspective.

The globalization of high-value activities: Why do firms offshore advanced tasks?

Purpose – The purpose of the chapter is to analyze the factors that lead firms to offshore advanced tasks. Methodology/approach – The study uses a 1,500-firm survey from Denmark to investigate the offshoring of 12 tradable manufacturing, technical, and service activities across different industries. Findings – Findings indicate that offshoring of advanced tasks is driven by a different set of strategic motives than previous waves of offshoring, which predominantly included simple and standardized routine tasks. While the lower cost of unskilled, labor-intensive processes is the incentive for firms that offshore less advanced tasks, a desire to broaden and deepen global networks of new knowledge spurs highly knowledge-intensive companies to offshore more advanced tasks. Originality/value of chapter – We propose that offshoring should be analyzed on a more disaggregated level of analysis than is the norm in mainstream offshoring literature. To reflect the trend whereby firms are “slicing” their value chain in finer and finer parts and locate these in various locations around the world, offshoring should be analyzed at the task level, since this paves the way for a richer understanding of offshoring strategies and processes.

Exploring Layers of Complexity in Offshoring Research and Practice

In just a matter of a decade, the Danish healthcare product manufacturer Coloplast underwent a complete organizational reconfiguration from being a local Danish manufacturing company to become a truly multinational corporation. Beginning in 2001, Coloplast commenced the process of relocating major parts of its manufacturing activities away from Denmark to Tatabanya in Hungary. Ten years later, the company had relocated up to almost 90 % of the production mainly to Hungary and China, but also to France and the United States. This reconfiguration had given substantial benefits, such as access to lower labor and production costs, but also an important means to reduce redundant organizational layers and resources. However, a transformation of this caliber rarely comes without challenges. In particular, Coloplast experienced many challenges such as empowering the new subsidiaries, adjusting the organizational requirements and identifying the detrimental organizational complexities. As Coloplast’s Operations Manager Allan Rasmussen explained: “We had designed an organizational structure that was too complex, with complex decision processes, complex governance structure, and complex communication channels”.

Global sourcing of services versus manufacturing activities: is it any different?

International sourcing strategies and operations are usually described distinctively for manufacturing and services. In this paper, the theoretical and strategic relevance of this distinction is questioned. As an alternative, an activity-based theoretical framework for exploring the linkages between the attributes of the globally sourced activities and the international sourcing operations of firms is presented. This paper discusses the implications for global sourcing research and the strategic and organizational implications for managers, and it argues that finding the right match between strategy, activity and organization is a key determinant of the success of the sourcing process and outcome.

Beyond job losses

Purpose – The purpose of this paper is to assess the impact of offshoring and inshoring on the demand for different types of labor.Design/methodology/approach – The paper uses a survey with 1,500 firms located in the Eastern part of Denmark to identify overall offshoring and inshoring trends. Estimates of the employment impact are founded on data from a sub‐sample of firms with offshoring and/or inshoring.Findings – The paper shows that in the period 2002‐2005 more jobs were created as a result of inshoring of activities into Eastern Denmark from firms outside Denmark than were eliminated due to offshoring from firms in the Danish region. Overall, highly skilled workers reap the benefits of offshoring and inshoring, whereas the positions of low‐skilled workers are challenged.Originality/value – In contrast to most academic research on offshoring, which predominantly focus on outward offshoring flows, the study analyzes both outward and inward offshoring (inshoring) and gives a more holistic and balanced v...

Do Expectations Match Reality When Firms Consider the Risks of Offshoring? A Comparison of Risk Assessment by Firms with and Without Offshoring Experience

The risk associated with offshoring is a recurrent theme in research. However, previous research has mainly given a static picture of offshoring risks even though the strategies of offshoring firms, including their views on risks, may change as they gain experience in the field. In this chapter we investigate the influence of organizational learning on firms’ perceptions of the risks in offshoring. We use survey data from firms in Scandinavia and compare the risk assessments of firms without offshoring experience with firms that engage in offshoring. The findings show that firms without offshoring experience particularly stress exogenous risks while firms with offshoring experience see the endogenous risks as important. We offer two different interpretations of these results.