Globalization: Managing Multinationals - a comparison of offshoring and outsourcing strategies in UK and German multinational corporations

Abstract

This paper outlines research exploring differences in approach to outsourcing and offshoring by multinational corporations. In particular, a comparison is drawn between German and UK headquartered organizations in the airline and engineering sectors. A novel conceptual framework is developed; and the initial findings from two case studies are that German organizations are less inclined to outsource (in both sectors) preferring to retain control as a wholly owned business offshore. The UK businesses were less risk adverse and seemed to be more flexible and agile in their sourcing policies – using competitors when there is a sound business case. The relationships’ with trade unions / works council was also found to be very different, with reluctance by management in Germany to progress radical initiatives. A favorable economy in Germany has also created an environment in which overseas expansion could take place without a loss of jobs at home