Advantages and disadvantages of offshoring : A case study of VSM Group AB

Advantages and disadvantages

of offshoring

Table of Contents

1

Introduction ... 1

1.1 Background ... 1 1.2 Purpose ... 2 1.3 Research questions ... 2 1.4 Delimitations ... 2 1.5 Outline ... 2

2

Method ... 3

2.1 Research approach ... 3 2.2 Research strategy ... 4 2.2.1 Introduction ... 4 2.2.2 Theoretical framework ... 4 2.2.3 Empirical study ... 4 2.3 Research design ... 5 2.4 Data collection ... 6 2.4.1 Theoretical framework ... 6 2.4.2 Empirical study ... 7 2.5 Research quality... 9

3

Theoretical framework ... 11

3.1 Introduction ... 11 3.2 Definition of offshoring ... 11

3.3 Reasons for companies to offshore ... 12

3.4 Advantages and disadvantages of offshoring ... 14

3.4.1 General ... 14

3.4.2 Economy of the society ... 14

3.4.2.1 Comparative advantage ... 14

3.4.2.2 Wealth creation ... 16

3.4.3 Labour market... 17

3.4.3.1 Long-term perspective ... 17

3.4.3.2 Short-term perspective ... 19

3.4.4 Education and innovation ... 20

3.5 Summary ... 21

4

Empirical study ... 24

4.1 Introduction ... 24

4.2 History of VSM and motives behind offshoring ... 24

4.3 Advantages and disadvantages of VSM’s offshoring ... 26

4.3.1 General ... 26

4.3.2 Economy of the society ... 26

4.3.3 Labour market... 28

4.3.3.1 Long-term perspective ... 28

4.3.3.2 Short-term perspective ... 29

4.3.4 Education and innovation ... 31

4.4 Summary ... 33

5

Analysis... 36

5.1 Introduction ... 36

5.3 Labour market ... 37

5.4 Education and innovation ... 39

6

Conclusion ... 41

7

Discussion ... 43

References ... 44

Figures

Figure 3-1 Defining Outsourcing and Offshoring (Sako, 2005) ... 12

Figure 3-2 Relation between key issues of offshoring from societal perspective ... 14

Figure 3-3 Summary of main advantages and disadvantages derived from the litterature studie ... 23

Figure 4-1 Summary of main advantages and disadvantages derived from the empirical studies ... 35

Appendices

Appendix 1 – Interview questions – Politicans (English) ... 48

Appendix 2 – Interview questions – Politicans (Swedish) ... 50

Appendix 3 – Interview questions – IF Metall (English) ... 52

Appendix 4 – Interview questions – IF Metall (Swedish) ... 54

Appendix 5 – Interview questions – Svenskt Näringsliv (English) ... 56

Appendix 6 – Interview questions – Svenskt Näringsliv (Swedish) ... 58

Appendix 7 – Interview questions – Arbetsförmedlingen (English)... 60

1

Introduction

1.1

Background

1.2

Purpose

1.3

Research questions

1.4

Delimitations

2

Method

2.2

Research strategy

2.2.1 Introduction

2.2.2 Theoretical framework

2.4

Data collection

3

Theoretical framework

3.1

Introduction

3.4

Advantages and disadvantages of offshoring

3.4.1 General

3.4.2 Economy of the society

3.4.3 Labour market

4

Empirical study

4.1

Introduction

4.3

Advantages and disadvantages of VSM’s offshoring

4.3.1 General

4.3.3 Labour market

5

Analysis

5.1

Introduction

Appendix 2 – Interview questions – Politicans

(Swedish)

Appendix 5 – Interview questions – Svenskt Näringsliv

(English)

Appendix 6 – Interview questions – Svenskt Näringsliv

(Swedish)

Appendix 7 – Interview questions – Arbetsförmedlingen

(English)

Appendix 8 – Interview questions – Arbetsförmedlingen

(Swedish)