What motivates manufacturing SMEs to outsource offshore in China? Comparing the perspectives of SME manufacturers and their suppliers

Abstract

Purpose – The purpose of this paper is to focus on the motivations for offshore outsourcing encountered by manufacturing small and medium‐sized enterprises (SMEs) and their suppliers in China. The paper explores the motivations and challenges encountered by SMEs choosing to outsource their manufacturing activities and why their suppliers engage with them.Design/methodology/approach – A qualitative case study method was utilized. The authors obtained perspectives of SME managers as well as the suppliers for each of the cases, conducting in‐depth interviews in order to obtain comprehensive information about their outsourcing activities. Then, cross‐case analysis was carried out using content analysis techniques to identify key themes for the motivations to undertake offshore outsourcing.Findings – The results showed that the first rationale for offshore outsourcing relates to increasing efficiency and labor cost reduction while holding quality constant. The second rationale is to maintain flexibility in res...