Title: Outsourcing: Strategies for companies in less developed countries.

Aim: To study how companies in less developed countries through company development and strategies position themselves to become (attractive) partners for outsourcers? Or position themselves not to?

Countries: Vietnam, South Africa and Ghana

Project Brief: Globalisation – and increasing levels of outsourcing of activities from the North to the South provide new business opportunities to companies in developing countries in terms of becoming partners for the outsourcers. Nevertheless, the main focus in the literature has been on the Northern TNCs and how they manage the many aspects of outsourcing, while little attention has been given to the situation of the Southern companies.

This has lead to the perception that firms in developing countries are more or less passively waiting to be approached and become partners in outsourcing relations, and this option is the one and only – the golden opportunity – while other strategies tend not to be considered.

The present study applies an open perspective on the development and the strategies of developing country firms, employing existing international business and strategic management theories. The point of departure is that context matters and influence the firm practices along with the business options in the domestic market as well as through outsourcing partnerships with companies abroad. A couple of working hypotheses will form the initial foundation of the work:

a) Southern firms have short term and often flexible strategies concerning outsourcing,

b) Strategies of firms in certain, strong hold sectors are more elaborate and productive compared to others,

c) Developing country firm strategies matter, as 'good practice' leads to either better positioning in the value chain, results in diversification and better performance. Or, among firms which are not involved in cross-border outsourcing partnership, but instead choose to focus on the home market including local based TNCs, also leads to better performance

The project will conduct a number of cases studies of Danish (and/or other foreign) and local firms in specific sectors. The choice of sectors/firms is to be decided based on a literature review, investigations in the three countries, and on a survey of outsourcing firms in the three countries.

Field work: First round of field work will take place during Spring 2007 in Africa and Summer 2007 in Vietnam.

Participants: Henrik Schaumburg-Müller (Vietnam), Søren Jeppesen (South Africa) and John Kuada (Ghana).