Offshoring Services for International Business’

2417 words (10 pages) Essay in International Business

23/09/19 International Business Reference this

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Introduction

The topic of this paper lies in the offshoring services of international businesses. This will be used as a basis of the selection of three research papers, where their research methods will be evaluated in relation to the topic.

Offshoring services takes place when firms shift processes to a new country. Historically, this has been done when companies in the western part of the world relocate to the developing nations in order to take advantage of cheap labour and create more efficient processes (The Economist, 2013). This is different to outsourcing where internal processes are conducted by a third party. A company may in this case experience the loss of own capabilities, but can at the same time save money for the seller and the consumer. Ethical issues arise with working conditions in cheap labour countries, looking into the context of for example Apple and Foxconn in China (Webb, 2017). This is therefore an important and current topic, which requires more investigation of its research processes 

The selection of three papers in this essay will allow the examination of research methods to be seen through various contexts, and provide insights into the elements that function well, or not, within the topic. The papers selected have adopted quantitative, mixed, and qualitative research methods. The first paper which will be discussed looks into the international offshoring services through a parity study through quantitative research methods. The second paper offers in depth research through mixed methods into offshore outsourcing in the context of SMEs and how the topic provides value to these businesses on a global scale. The third paper looks into the evolution of offshore outsourcing of services, which adopted a qualitative technique. The findings will be summarised in the conclusion.    

Paper 1: International Offshoring Services: A Parity Study

The first research paper which will be discussed in this essay is predominantly about the examination of elements that may affect the location choices for offshoring services activities. This includes the differences in wages between the home country and the host nation. The paper found that a country has a higher chance of becoming a destination for the offshoring of services as the wages of that country increases, in contrast to popular belief that this activity occurs with countries that have low wages. The paper by Bunyaratavej, Hahn and Doh (2007) argues that offshoring services are located to countries with closer wage levels to the home nation, in addition to higher education levels.

The data and method of this paper has primarily focused on quantitative techniques. This means that it has adopted a positivist view, where numbers and statistical analyses are used to provide research findings. This is coined the scientific method following rational research techniques, where causes determine outcomes (Mackenzie and Knipe, 2006). This method often uses hypotheses to test theories and describe what is going on in the environment (O’Leary, 2004), and essentially adopts techniques that can measure and quantify results. Compared to interpretivist qualitative research, this method essentially adopts data collection and analysis as the rational way to portray the ‘truth’, in other words the findings of the research.

The research by Bunyaratavej, Hahn and Doh (2007) in this first paper focuses on the US because of the country’s dominance in the area of international offshoring services compared to other countries. It is important to focus on nations that can provide a lot of data for the study. However, limited research on one country reduces the data set scale (Faber and Fonesca, 2014), and cannot provide answers into the issues that may arise within the topic on a completely global scale.

A robust and strong element of quantitative research often lies in its ability to be evaluated on a large sample size (Krejcie and Morgan, 1970). The usage of pre-made surveys and questionnaires often make the research process faster and therefore allows for a larger sample size, as it may be simple to send them out through for example emails. The research of this first paper differs slightly to this, in the sense that the researchers have selected a dependent variable, and a number of independent variables that they test in relation to this. These independent variables led to a number of hypotheses, and the data to test these hypotheses were extracted from various databases. This is a strong research method, due to its ability to provide tangible numbers and figures that the researchers could test and draw conclusions from. However, what lacks of quantitative research is the in depth explanations of why these answers were found (Mertens, 2005). The next paper selected will therefore take a different view which has adopted both research methods.  

Paper 2: Offshore Outsourcing as a Source of International Competitiveness for SMEs 

This paper focuses on the offshore outsourcing in the context of SMEs, where the researchers found that it is linked to greater internationalisation of their sales (Di Gregorio, Musteen and Thomas, 2008). This is due to the fact that offshoring enables these firms to reduce costs, expand their global ties and more. The research method adopted by this paper has been a quantitative survey method, but also a qualitative interview in order to validate and further provide clarification to the issue at hand. The survey was sent out to the highest ranking managers of SMEs in one state of the US; New Mexico. Similarly, to the first paper, this limits the global impact on the research by focusing on one state. However, it can provide great depth into the sample size selected from the state as these firms have been selected by their ability to compete in international markets. After filtering out the anomalies and companies which did not provide substantiated responses, the final set was selected and t-tested for any biases. This is important due to the fact that irregular data sets may provide false findings and therefore make the research invalid (Creswell, 2003). As quantitative studies rely on the data, it is therefore vital that the researcher pay attention to this element.

One of the issues with quantitative research (explored in paper 1) was the fact that it does not provide in depth information about the responses. This second research paper tackles this by following up the quantitative investigation with a number of in depth telephone interviews. Mackenzie and Knipe (2006) further argue that the complexity of research methods today has led to a disruption of techniques, and mixed methods are more commonly seen in research papers. This is due to the fact that both of the methods can complement each other, especially in the areas that the other lacks in. This means that researchers are able to gather data from the quantitative research and add information into why the respondents answered this way, as a way to validate or further add knowledge into the research.

Gorard (2004) argues that this method has significantly improved the research in social sciences, where research has been reinforced by the use of various techniques.

The qualitative research conducted in this paper by Di Gregorio, Musteen and Thomas (2008) was in the form of semi structured interviews, by having a set of questions to guide the research but also allowing the conversation to free float (Louise Barriball and While, 1994). This is important because it allows the researchers to have a conversation with the respondents, where they react to a response but also stick to the script/theme in order to not stray away too far from the topic.

It is however important to note that the researchers using mixed methods need to be careful of the complexity of such techniques (Gorard, 2004), especially as there are various elements linked to offshore outsourcing services affecting its research.       

Paper 3: Offshore Outsourcing of Services: An Evolutionary Perspective

The authors of the final paper discussed in this essay, argue that offshore of services is gaining importance nowadays in theory and practice as an important cultural and business phenomenon (Tate et al., 2009). In order to research this area, the researchers selected case studies in order to go through different business cases in depth, and analyse the evolution of the topic. This has been done in respects to how the authority structures change over a period of time, providing 5 proposals building on different elements of offshoring services. The main driver of the topic is cost, as explained in the other papers, and efficiency combined with its improvement in the locations that offshoring takes place in.

The research method used in this final paper is a different way to gather large amounts of information about a particular topic from instances that have previously occurred. This method is grounded in qualitative methods, which provides more in depth information into the reasons of why respondents think the way they do (Flyvbjerg, 2006). This inductive research method therefore aims to draw out information, and has been criticised of its subjective nature (Mertens, 2005). Case study research typically allows the researchers to extract findings that may occur over a period of time. As it is a method which adopts qualitative methods, it provides valuable insights and may at the same time be focused and specific due to the case study element. The limitation is that this technique might not provide detailed answers, as a data set might, but it allows the research to gain momentum through in depth information about real life cases (Eisenhardt, 1989). This inductive process is therefore not without flaws, but its exploratory nature, led the research to use theories from the literature review to shape the proposals, in other words elaborate on other prevailing concepts (Ketokivi, 2006).

This qualitative research method has therefore provided significant insights into the topic area, however lacking the strong point of the quantitative research which is generalisability for a wider population.  

Conclusion

It is clear from the discussion in this essay that there are positive and negative aspects to quantitative and qualitative research methods within the topic of international offshore services. It was also found that research nowadays has widely adopted mixed research methods which poses with various challenges (Mackenzie and Knipe, 2006). This method, utilised in paper 2, provides excellent results in terms of both the methods complementing each other. However, researchers using both techniques need to be vary of the limitations of both the methods (Gorard, 2004). If these are overlooked, it may instigate serious consequences to the findings and question the paper’s ultimate validity. Researchers need to ensure that their competencies extend through a broad spectre of techniques in order to avoid and limit the issues arising with each method.

The first and third paper in contrast focused on single research methods which may have made the process simpler, but eliminate the possibility of complementing the research with further in depth information or generalising it to a larger population (Mackenzie and Knipe, 2006). The first paper focused on quantitative research methods which allows the research to be completed by using a large sample size. This means that findings can be generalised to a wider population and its validity lies in that fact. It is described as a scientific method, due to its data analysis, with rigid quantifiable findings (Krejcie and Morgan, 1970. This is different to the qualitative research methods which were used in paper 3. Qualitative research allows the researchers to investigate and extracts answers as an inductive research method (Flyvbjerg, 2006). This looks into why respondents think the way they do and provides explanations regarding the findings. The issue with this method lies in the fact that it typically cannot be generalised to a wider population, as the research is conducted on the views of a small sample size.

The research method selected to investigate offshore services is therefore dependent on the elements selected to research. If one investigates every aspect of the topic, it may be too complex to employ mixed methods. Hence, employing quantitative research methods alone as a scientific approach may clarify the variables that affect the issue, whereas qualitative may provide more insights into the perceptions of respondents.

References:

  • Bunyaratavej, K., Hahn, E. and Doh, J. (2007). International offshoring of services: A parity study. Journal of International Management, 13(1), pp.7-21.
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  • Di Gregorio, D., Musteen, M. and Thomas, D. (2008). Offshore outsourcing as a source of international competitiveness for SMEs. Journal of International Business Studies, 40(6), pp.969-988.
  • Eisenhardt, K. (1989). Building Theories from Case Study Research. Academy of Management Review, 14(4), pp.532-550.
  • Faber, J. and Fonseca, L. (2014). How sample size influences research outcomes. Dental Press Journal of Orthodontics, 19(4), pp.27-29.
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  • Tate, W., Ellram, L., Bals, L. and Hartmann, E. (2009). Offshore outsourcing of services: An evolutionary perspective. International Journal of Production Economics, 120(2), pp.512-524.
  • The Economist (2013). Here, there and everywhere. [online] The Economist. Available at: https://www.economist.com/special-report/2013/01/19/here-there-and-everywhere [Accessed 16 Jan. 2019].
  • Webb, J. (2017). What Is Offshoring? What Is Outsourcing? Are They Different?. [online] Forbes.com. Available at: https://www.forbes.com/sites/jwebb/2017/07/28/what-is-offshoring-what-is-outsourcing-are-they-different/#120f26e12a2e [Accessed 15 Jan. 2019].

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