Offshoring Essays

Offshoring Essays Offshoring Essay Offshoring Essay International Business Offshoring Introduction Offshoring also known as offshore outsourcing, is defined by firm activities being geographically relocated from the firms domestic country to a lower-cost foreign country (WTO, 2013). Frequently, the operations are offshored from industrialized countries to less-developed countries in order to reduce labor expenses and to leverage the cost advantage. The aim of this report is to explore on the aspect of the offshoring and answer the question is it beneficial to the society. In the further part this report will evaluate on the aspect of reshoring as the process of companies eturning back to home country that is currently taking place. The aim will be to answer the question whether it is as a result of the correction to offshoring or a reaction to a change in circumstances and a rethinking of strategy by companies. Offshoring concept and potential benefits and drawbacks to the society The concept of the offshoring in the increasingly dynamic global market has been introduced as an answer to Multi National Enterprises (here and after MNE) how to stay competitive growing. In the era of globalization and economic turmoil, the idea f gaining competitive advantage has become as a priority. However, shifting production has raised the arguments against the exportation of the Jobs from the home country. This can cause higher unemployment and the exclusion particular jobs from the market. Table 1. 1 presents the percentage of lost Jobs due to offshoring. In some cases, such as Portugal, offshoring accounts for more than 50% (Figure 1) as a reason of lost Jobs (WTO, 2011). Figure 1: Total Job losses due to offshoring announced in the ERM, by country, in 2005. Daniels and Sullivan (2013) pointed that reason for MNE to move low-skilled Jobs to hird part country is to lower the price for their products and services. The price competitiveness determinates competitive advantage and growth of the company. As a result growing company can create new Jobs, higher-skilled and better paid. Recent trends, however, show that in order to stay competitive, MNE are ready to shift more Research of 2,700 US and European companies showed that 700,000 higher-skilled jobs were outsourced in 2009 and another 250,000 will be through 2014 (Daniels, Sullivan, 2013). As Roberts pointed out (2013), to stay balanced with the population rowth between 2002 and 2011 US economy needed around 14 million new Jobs. However, at the end of 2011 there were only 1 million more Jobs than in 2002. Within this period 3,5 million of middle class manufacturing Jobs were lost. 1,188,000 new waitresses and bartenders Jobs were created, lowly paid service Jobs that cannot be offshored. MNE seek for offshoring not only to gain production cost efficiency but also to reach other resources hardly or not available internally. Study of Oshri and Kotlarsky (2009) on strategic drivers and risks of offshoring (Figure 2), based on nterview with Chief Information Officers (CIOs) and Chief Financial Officers (CFOs) of 263 European leading companies unveiled the priority drivers for offshoring. In contrast to common belief, Clos and CFOs pointed that access to skills not available internally is more important (64%) that cost reduction factor (41 (Oshri and Kotlarsky, 2011). This can be observed in the example of India. Today Indias higher education institutions produce 4. million skilled workforces annually (Business Standard, 2013), many of them specialized in software engineering, computer chip design, and code writing. This of course affects employees from other well developed countries as Indians specialists and engineers are lower paid. Figure 2: Key drivers of offshoring, source: Oshri and Kotlarsky (2009) Another issue that needs to be considered is the requalification and ability to adapt to Job market by redundant workers. High unemployment causes increasing costs for the government, either to retrain or provide with the benefits for the unemployed. People provided with benefits might struggle to raise money for their children education. They, without sufficient funds to gain higher qualification, may feel excluded from the society. Such situation certainly can affect productivity of whole generation. Furthermore, it was rightly noted by Roberts (2013) that short term strategy of Americans companies to reach profits cause them not only losing their best employees but also the consumers who buy their products. Employees being unemployed or doing lower paid Jobs are less presence in the consumer market. They also provide fewer retirement savings for future investments. Reshoring concept and drivers for MNE Due to increasing costs of offshoring number of businesses are turning to new trend of reshoring, coming back with the production to home country. In the last decade wages in China has gone up by 10-20% a year, faster than the labor productivity. The Chinese government has set a target for annual increases in the minimum wage of 13% until 2015. Moreover, a stronger Chinese currency has made the costs even higher (The Economist, 2013). On the other hand, the costs in the US are falling. It has been caused by lowering wages in some states due to high unemployment and agreements between businesses and unions (The Economist, 2013). This along with the increasing productivity, falling energy prices and come back with their operations. Additionally, oil price (Figure 3) that has been increasing in the last few years. As a result, cost of transportation from China or India has risen significantly. Figure 3: Figure 1. US crude oil prices (based on average prices paid by US refiners for all grades of oil based on EIA data) converted to 2012$ using CPI-Urban data from the US Bureau of Labor Statistics. Due to high costs, in 2012, 37% of American companies with annual sales above $1 billion were planning or actively considering moving production back to US. Further 48% of companies with sales above $10 billion came out as reshorers. Besides the increasing costs of offshoring, many companies faced the dilemma of dislocation of RD hubs from manufacturing sites. In many cases this causes negative effects. Many companies are reluctant to shift their innovation sites to other countries in order to not lose the valuable known-how and intellectual property. Some of the companies, looking for cost cut, moved production to other locations, most often closer to their borders. This new trend, called nearshoring, relates to the shifting the production and service activity to geographically closer locations. Figure 4 shows three clusters where the companies, called clients, located their facilities in distance- limited locations (Carmel, Abbott, 2007). Number of US companies shifted their operations to Mexico and South America. The average wage in Mexico is slightly higher than that in China. The costs of transporting products to US are far lower that from China, and the time of shipping from Mexico is counted in days, not weeks (The Economist, 2013). Figure 4: Global distribution of nearshore destinations and their division into three clusters. Conclusions and Recommendations As a conclusion, number of MNE from developed countries moved production sites and services to lower cost countries. This has been done in order to gain and keep competitive advantage over other competitors. However, over the past few years, businesses have faced increasing costs of operating in offshored countries. Despite that production costs in US might still be higher than in China, the gap has narrowed substantially, and it seems no longer to be a clinching reason for manufacturing in the emerging markets. Separate locations for innovation centers manufacture sites appeared to be a challenge for some companies as well. Problem their face is that host countries such as China, do not provide sufficient regulations to protect the intellectual property. Some firms are concerned about moving to China because of their fear to lose their technology and know-how. Some MNE decided to come back to home country, others relocated their sites to lower production cost countries closer to their borders. However, the aim of the nearshoring is the same as offshoring, cost efficiency, and is good alternative to many companies, not to the society in the home country. Offshoring is trend that will be playing important role ircumstances, the strategy of the MNE will change too. The countries perceived today as a source of low cost labor, have become more and more often seen as a consumer markets. China, after India most popular offshoring destination, is also 2nd the biggest economy in the world, with fast growing middle class and forecast to reach 630 million consumers by the 2022 (The Diplomat, 2013). Population of BRIC countries accounts for around 2. 6 billion, which is around 27% of world population and is still growing (worldometers, 2013). This means MNE will be still going offshore in order to gain their share in those markets. Producing and sending products from one place will not be rational in the few years. Globalisation and developing markets will force MNE to set up nearshoring instead of offshoring in order to be able to recognize and respond to local conditions quick. Increasing pressure for the local responsiveness will lead to multi-domestic strategy where MNE will have to deal with the consumer divergence and host-government policies (Daniels, Sullivan, 2013). The size of the reshoring will depend on the strength of the government and law-makers in the developing countries. Win the businesses over and make them come back to ome country will be one of the greatest challenges for the policy-makers in the coming years. References: Brakman, S. , Garretsen, H. et al. (2006), Nations and Firms in the Global Economy, Cambridge University Press: Cambridge, Chapters 3, 4 5. Business Standard (2013), SWOT analysis I India as an offshoring destination, [Online] [Accessed on 26/10/2013] Available from: business- standard. com/article/economy-policy/swot-analysis-india-as-an-offshoring- destination-113070300226 1 . html Carmel, E. Abbott, P. (2007), Why Nearshore Means That Distance Matters, [Online] Accessed on 28/10/2013] Available from: http://auapps. merican. edu/†carmel/ papers/nearshore. pdf Daniels, J. , Radebaugh, L. , Sullivan, D. (2013), International Business. Environment and Operations, Essex, Pearson Education Limited, pp. 57-59, 467-468. G? ¶rg, H. , WTO (201 1), Globalization, offshoring and Jobs, Geneva, WTO Publications. K. pp. 146-185. Our Finite World, (2013), Ten Reasons Why High Oil Prices are a Problem, [Online] [Accessed on 27/10/2013] Available from: http://ourfiniteworld. c om/2013/01117/ten- reasons-why-high-oil-prices-are-a-problem/ Oshri, l. Kotlarsky, J. , Willcocks, L. 01 1), The Handbook of Global Outsourcing and Offshoring, 2nd edition, New York, Palgrave Macmillan, p. 15. Roberts, P. (2012), America R. I. P. : Death of the Middle Class, Offshoring of American Jobs, [Online] [Accessed on 25/10/2013] Available from: globalresearch. ca/america-r-i-p- death-of-the-middle-class-offshoring-of-american-Jobs/5308637 Roberts, P. (2013), The Offshore Outsourcing of American Jobs: A Greater Threat Than Terrorism, [Online] [Accessed on 25/10/2013] Available from: http:// www. globalresearch. ca/the-offshore-outsourcing-of-american-]obs-a-greater-threat- than-terrorism/18725 The Economist (2013), Coming home, [Online] [Accessed on 26/10/2013] Available from: economist. com/news/special-report/21569570-growing-number- american-companies-are-moving-their-manufacturing-back-united The Economist (2013), Here, there and everywhere, [Online] [Accessed on 26/10/2013] Available from: economist. com/news/special-report/21 569572-after- decades-sending-work-across-world-companies-are-rethinking-their-offshoring The Economist, (2013), The story so far, [Online] [Accessed on 26/10/2013] Available from: economist. om/news/special-report/21 569574-offshoring-has- rought-huge-economic-benefits-heavy-political-price-story-so The Diplomat, Barton, D. (2013) Half a Billion: Chinas Middle-Class Consumers, [Online] [Accessed on 30/10/2013] Available from: http://thediplomat. com/pacific- money/2013/05/30/half-a-billion-chinas-middle-class-consumers/ WorldoMeters, (2013), Current World Population, [Online] [Accessed on 1/11/2013] Available from: worldometers. info/world- population/ WTO (2013), Supply Chain Issues, [Online] [Accessed on 20/10/2013] Available from: wto. org/english/res_e/booksp_e/aid4tradesupplychain13_part2_e. pdf

10 Extremely Common and Critical Themes in Literature

10 Extremely Common and Critical Themes in Literature When we refer to the theme of a book, we are talking about  a universal idea, lesson,  or message that stretches through the entire story. Every book has a theme and we often see the same theme in many books. Its also common for a book to have many themes. A theme may show up in a pattern such as reoccurring examples of beauty in simplicity. A theme may come also through as the result of a buildup like the gradual realization that war is tragic  and not noble. It is often a lesson that we learn about life or people. We can better understand book themes when we think about the stories we know from childhood. In The Three Little Pigs, for example, we learn that its not wise to cut corners (by building a straw house). How Can You Find a Theme in Books? Finding the theme of a book can be difficult for some students because the theme is something you determine on your own. It is not something you find stated in plain words. The theme is a message that you take away from the book and it is defined by  the symbols or a motif that keeps appearing and reappearing throughout the work. To determine the theme of a book, you should select a word that expresses the subject of your book. Try  to expand that word into a message  about life.   10 of the Most Common Book Themes While there are countless themes found in books, there are a few that we can see in many books. These universal themes are popular among authors and readers alike because they are experiences we can relate to. To give you some ideas on finding a books theme, lets explore some of the most popular and discover examples of those themes in well-known books. Remember, however, that the messages in any piece of literature can go much deeper than this, but it will at least give you a good starting point. Judgment - Possibly one of the most common themes is judgment. In these books, a character is judged for being different or doing wrong, whether the infraction is real or just perceived as wrongdoing by others. Among classic novels, we can see this in The Scarlet Letter, The Hunchback of Notre Dame, and To Kill a Mockingbird. As these tales prove, the judgment does not always equal justice, either.Survival - There is something captivating about a good survival story, one in which the main characters must overcome countless odds just to live another day. Almost any book by Jack London falls into this category because his characters often battle nature. Lord of the Flies is another in which life and death are important parts of the story. Michael Crichtons Congo and Jurassic Park certainly follow this theme.Peace and War - The contradiction between peace and war is a popular topic for authors. Quite often, the characters are gripped in the turmoil of conflict while hoping for days of p eace to come or reminiscing about the good life before the war. Books such as Gone With the Wind show the before, during, and after of war, while others focus on the time of war itself. Just a few examples include All Quiet on the Western Front, The Boy in the Striped Pajamas, and For Whom the Bell Tolls. Love - The universal truth of love is a very common theme in literature and you will find countless examples of it. They go beyond those sultry romance novels, too. Sometimes, it is even intertwined with other themes. Think of books like Jane Austens Pride and Prejudice or Emily Brontes Wuthering Heights. For a modern example, just look at Stephenie Meyers Twilight series.Heroism - Whether it is false heroism or true heroic acts, you will often find conflicting values in books with this theme. We see it quite often in classical literature from the Greeks, with Homers The Odyssey serving as a perfect example. You can also find it in more recent stories such as The Three Musketeers and The Hobbit.  Good and Evil -  The coexistence of good and evil is another popular theme. It is often found alongside many of these other themes such as war, judgment, and even love. Books such as the Harry Potter and Lord of the Rings series use this as the central theme. Another classic example is T he Lion, The Witch, and The Wardrobe. Circle of Life - The notion that life begins with birth and ends with death is nothing new to authors- many incorporate this into the themes of their books. Some may explore immortality such as in The Picture of Dorian Gray. Others, such as Tolstoys The Death of Ivan Ilych, shock a character into realizing that death inevitable. In a story like F. Scott Fitzgeralds The Curious Case of Benjamin Button, the circle of life theme is turned completely upside down.Suffering - There is physical suffering and internal suffering and both are popular themes, often intertwined with others. A book such as Fyodor Dostoevskys Crime and Punishment is filled with suffering as well as guilt. One like Charles Dickens Oliver Twist looks more at the physical suffering of impoverished children, though there is plenty of both.  Deception - This theme can also take on many faces. Deception can be physical or social and its all about keeping secrets from others. For instance, we see many lies in The Adven tures of Huckleberry Finn and many of Shakespeares plays are centered on deception at some level. Any mystery novel has some sort of deception as well. Coming of Age - Growing up is not easy, which is why so many books rely on a coming of age theme. This is one in which children or young adults mature through various events and learn valuable life lessons in the process. Books such as The Outsiders and The Catcher in the Rye use this theme very well.