This thesis is focused on offshoring in human resources. Its aim is to provide, based on own experience, a comprehensive overview of how offshoring might look like in reality, what moving business activities abroad involves and what are its advantages and pitfalls. The first chapter is devoted to an introduction to offshoring, to a definition and to an explanation of the difference between the terms offshoring and outsourcing. The following chapter focuses on a description of the company whose Human Resources department is currently struggling with offshoring. The third chapter describes transfer of different business activities of above mentioned company to its shared service centre in South America. The final chapter is devoted to appraisal of offshoring in the company as well as to my own proposals for changes in the given process so as the company is able to achieve the main purpose of offshoring.

<p>Denna magisteruppsats är skriven inom området internationellt företagande. Det är en granskande studie av de tre största nordiska IT-konsultföretagen som bedriver outsourcing av IT-tjänster i Baltikum och Tjeckien. Dessa är TietoEnator, EDB och WM-data. Vi har även studerat två leverantörer av IT-tjänster i Baltikum, Mandator och Dati.</p><p>Syftet med den här undersökningen har varit att se vilka faktorer som gör att företag i stor utsträckning fortsätter att outsourca delar av verksamheten, trots att ett flertal forskningsrapporter visar att det inte alltid är lönsamt.</p><p>Analyserna visar att de faktorer som främst förmår företag att fortsätta outsourca är att de anser sig uppnå effektivitet och kostnadsbesparingar. Andra faktorer som anses avgörande är att inblandade parter har lätt att samarbeta och förstå varandra. Dessutom behöver företag nya kunskaper och kunna utnyttja sina resurser effektivare inom kompetensområdet IT.</p><p>I slutsatsen konstateras att det blivit allt tydligare att företag som fortsätter att outsourca har haft en strukturerad plan för hur outsourcing-projektet ska genomföras. De har även goda förkunskaper om marknaden som de har valt att verka på. Vi tror dessutom att de företag som har valt att outsourca till Indien har haft fler negativa erfarenheter än de som har outsourcat till Baltikum och Tjeckien. Den viktigaste anledningen till varför företag outsourcar till Baltikum och Tjeckien är att företagen här har bättre förutsättningar att lyckas. Detta beror inte minst på den kulturella och geografiska närheten till dessa länder</p>

<p>Increasingly, MNC’s transfer parts of their operation to low wage countries in order to cut costs. The theory refers to this as to ‘offshoring’. The transfer of knowledge is a critical part of a successful offshoring project. In cross-boarder projects culture will influence the work. Thus, the aim of this paper is to deepen our understanding of the effects of culture and to reveal unexplored areas in the existing theories, through that the paper contributes with implications for how cultural challenges can be dealt with in an operational context.</p><p>By connecting leading theories on knowledge transfer, offshoring and culture, a theoretical framework has been created. In order to expand the existing the theories a case study was conducted at IBM, studying two offshoring projects to India. The case study was conducted through eight qualitative interviews with six different respondents. All respondents were managers in IBM Nordic and IBM India. The interviews were conducted individually and as focus groups and carried out as discussions. The empirical data presented in the study also consists of information derived from strategy documents,provided to us by IBM.</p><p>We found a number of factors to be considered in offshoring projects, which were not part of the theoretical framework,e.g. responsibilities for governance of the project should be decided and that the HR department should be involved from the start. Furthermore we found some areas of the process, which were more influenced by culture than others, such as what creates motivation and trust.</p>

Increasingly, MNC’s transfer parts of their operation to low wage countries in order to cut costs. The theory refers to this as to ‘offshoring’. The transfer of knowledge is a critical part of a successful offshoring project. In cross-boarder projects culture will influence the work. Thus, the aim of this paper is to deepen our understanding of the effects of culture and to reveal unexplored areas in the existing theories, through that the paper contributes with implications for how cultural challenges can be dealt with in an operational context. By connecting leading theories on knowledge transfer, offshoring and culture, a theoretical framework has been created. In order to expand the existing the theories a case study was conducted at IBM, studying two offshoring projects to India. The case study was conducted through eight qualitative interviews with six different respondents. All respondents were managers in IBM Nordic and IBM India. The interviews were conducted individually and as focus groups and carried out as discussions. The empirical data presented in the study also consists of information derived from strategy documents,provided to us by IBM. We found a number of factors to be considered in offshoring projects, which were not part of the theoretical framework,e.g. responsibilities for governance of the project should be decided and that the HR department should be involved from the start. Furthermore we found some areas of the process, which were more influenced by culture than others, such as what creates motivation and trust.

In this paper, I will explore the hidden costs and risks of IT offshoring and how to manage those costs so that realistic expectations can be set. Establishing a baseline of such expectations will help companies understand and follow best practices in planning, executing, and managing the full offshore lifecycle. While details will vary with each project, offshore vendor, and company, these costs are seen across most offshore ventures and, if understood, will help explain why so many offshoring attempts fail, help IT managers and decision makers anticipate potential problems, and help CIOs more accurately predict cost savings. / text

Information technology (IT) offshoring is an increasingly important strategic tool for firms. Although offshoring activities have led to significant cost savings in many cases, a critical concern is that as IT work moves offshore the deep, experiential knowledge will also move offshore. This knowledge loss may leave the domestic firm with a smaller pool of candidates vying for upper-level management jobs, leading to a future disruption in the management supply chain. In this dissertation three models are developed to investigate how the offshoring of IT activities may affect the domestic firm's knowledge level and as a result the costs of IT work.In the first model the impact of critical model parameters on the offshoring costs is investigated under the assumption that the offshoring rate is fixed. Although short-lived offshoring projects may generate substantial cost savings, long-lived offshoring projects may cause a disruption in the management supply chain, resulting in substantial cost increases. Under some conditions the domestic firm may be locked into an agreement where the backshoring decision becomes economically infeasible.In the second model, the domestic firm is allowed to make the offshoring rate decision. In this case the domestic firm may "steal" learning-by-doing knowledge from the foreign firm with a very low offshoring rate when the knowledge transfer rate is assumed to be constant. This "discontinuity" in knowledge transfer results in a "bang-bang" solution for the offshoring rate. Depending on the level of the disruption in the management supply chain the domestic firm should choose either very small offshoring or full offshoring. In response, it may be in the foreign firm's interest to contract a minimum offshoring rate. The impacts of assuming the knowledge transfer rate as a proportionally increasing function of the offshoring rate is also examined. In this case the middle range offshoring rates are viable solutions for the domestic firm.In the last model, the impact of allowing the domestic firm the real option to alter the offshoring rate is examined. This flexibility provides value in the mid ranges of the disruption of the management supply chain.

Denna magisteruppsats är skriven inom området internationellt företagande. Det är en granskande studie av de tre största nordiska IT-konsultföretagen som bedriver outsourcing av IT-tjänster i Baltikum och Tjeckien. Dessa är TietoEnator, EDB och WM-data. Vi har även studerat två leverantörer av IT-tjänster i Baltikum, Mandator och Dati. Syftet med den här undersökningen har varit att se vilka faktorer som gör att företag i stor utsträckning fortsätter att outsourca delar av verksamheten, trots att ett flertal forskningsrapporter visar att det inte alltid är lönsamt. Analyserna visar att de faktorer som främst förmår företag att fortsätta outsourca är att de anser sig uppnå effektivitet och kostnadsbesparingar. Andra faktorer som anses avgörande är att inblandade parter har lätt att samarbeta och förstå varandra. Dessutom behöver företag nya kunskaper och kunna utnyttja sina resurser effektivare inom kompetensområdet IT. I slutsatsen konstateras att det blivit allt tydligare att företag som fortsätter att outsourca har haft en strukturerad plan för hur outsourcing-projektet ska genomföras. De har även goda förkunskaper om marknaden som de har valt att verka på. Vi tror dessutom att de företag som har valt att outsourca till Indien har haft fler negativa erfarenheter än de som har outsourcat till Baltikum och Tjeckien. Den viktigaste anledningen till varför företag outsourcar till Baltikum och Tjeckien är att företagen här har bättre förutsättningar att lyckas. Detta beror inte minst på den kulturella och geografiska närheten till dessa länder

Bakgrund: IT-företag väljer att i allt högre utsträckning utlokalisera sin verksamhet till låglöneländer. Detta fenomen är dock förenat med en del kvalitetsrelaterade problem vilket kan skapa extra kostnader för dessa företag. Ett sätt att hantera dessa problem är att säkerhetsställa kunskapskapitalet som finns inom företaget genom en fungerande kunskapsöverföring. Ett etablerat verktyg för att arbeta med detta på nationell nivå är genom agila metoder, som en kommunikativ kunskapsöverföringsmetod.   Syfte: I vår studie vill vi undersöka hur ett svenskt IT-bolag förebygger kvalitetsrelaterade problem i samband med offshoring av IT-tjänster till Indien. För att få svar på det har vi valt att titta på vilken betydelse agila metoder, som en kommunikativ kunskapsöverföringsmetod, har.   Resultaten och slutsats: Vår studie ger belägg för att agila metoder motverkar ett hierarkiskt styre samt överbryggar kvalitetsrelaterade problem i företag som agerar på en internationell marknad med krosskulturella interaktioner.

Master-Arbeit Univ. St. Gallen, 2007.

This dissertation looks at three aspects of inequality within labor markets: wage inequality, intergenerational economic mobility, and inequality in higher education between sexes. The first chapter examines the contribution of offshoring to the relative decline in the wages paid to middle skilled workers. Within a task based model of production, I develop a theoretical framework that demonstrates how increased offshoring is consistent with a decline in domestic employment and a reduction in the wages paid to workers in middle skilled occupations. I test these predictions empirically using a proxy measure of offshoring. I find that industries which engage in offshoring see their domestic employment decline over time and have a wider gap between the wages of their middle and high skilled workers. Current levels of industry offshoring are significantly correlated with an industry's lagged occupational composition. Both material and service offshoring decrease with the share of manual occupations and service offshoring increases with the share of routine occupations. Chapter two estimates the magnitude of the intergenerational elasticity of income found in the NLSY79, and provides a decomposition of this elasticity into paternal and maternal effects. Roughly one fourth of intergenerational income transmission can be attributed to maternal earnings, and omitting maternal income biases the estimate of the effect of paternal income by over 20 percent. The third chapter analyzes the growing inequality in college graduation rates between men and women. Evidence from two cohorts in the National Longitudinal Surveys suggests that although women have performed better in high school than men for several decades, the impact of high school performance on college success has increased dramatically since the 1980s. The increasing weight attributed to academic excellence in high school explains a substantial portion of the female advantage in college graduation over their male peers.