Offshoring of German high-tech IT jobs to low-wage countries

Master's Thesis from the year 2004 in the subject Business economics - Business Management, Corporate Governance, grade: 60 points = 2,5 (B), Anglia Ruskin University (Ashcroft International Business School), course: Master Thesis, language: English, abstract: The relocation of jobs to low-wage countries (offshoring) has been a widely used approach of European companies in search of competitive advantage during the recent decades. Whereas in the past production and manufacturing were affected, now the services industry starts to use this option. IT and telecommunications are among the most important services branches of the Western European economies today. Offshoring is becoming a macro-economic problem in these countries because a lot of jobs will be lost. This dissertation researches the impact of offshoring on the German IT industry. Furthermore it points out the consequences for project management, quality assurance and human resources management. It highlights the pros and cons for the offshoring companies as well as the concerned employees. This research starts with a detailed literature review that clarifies important key terms and outlines the key findings of other authors. After that the methodology chapter describes the theoretical framework of this dissertation. Within the scope of this research a survey was conducted among 335 German IT companies. As the surveyed companies are primarily small and medium-sized enterprises (SME) it ascertains the attitudes of this type of firms towards offshoring. The subsequent case study of the telecom supplier Alcatel shows the point of view of a global player on offshoring. At the end, the analysis of the results of the survey and the conclusions from the case study lead to the recommendations for large companies, SMEs and the affected IT employees. The key finding of this dissertation is, that offshoring is a growing trend that no German IT company can deny regardless of its size. Currently the willingness for offshoring is strongly increasing, which means that many firms are in force to deal with this topic and the German IT employees must cope with changing demands in kind of IT jobs.