Research On TNCs Outsourcing

With development of TNCs international production system, Outsourcing as a commercial concept or managerial strategy is becoming more prevalent in the global operation of TNCs in recent years. When globalization and knowledge economy is coming, competitive environment is more complicated than before. The traditional vertically-integrated corporations are not competitive any more, because they no longer adapt to new environment. "Do what you do best, outsource the rest" becomes a new idea. Outsourcing is also becoming not only new trend of world commercial development but also an important strategy for corporation development. TNCs whose global outsourcing is exerting more and more important influences on both mother countries and host countries are main beneficiary and operator of outsourcing. It is more meaningful that paper demonstrates reasons, process of decision and effectiveness on host countries at both theoretical and practical aspects. The paper is composed of five chapters. In first chapter, the paper tries to discover the deep political and economic background of outsourcing emergence, and holds that TNCs outsourcing is a necessary reaction to new situation. Then, the paper introduces the concept and differences between outsourcing, purchasing and contract manufacturing. In second chapter, On the basis of concept, the paper demonstrates that the reason of TNCs outsourcing with relevant theory of economics and management. The paper holds that outsourcing is strategy TNCs choose positively. Moreover, the paper analyses the realistic reason of TNCs outsourcing. In third chapter, the paper analyses strategic process of decision and how to make decision between them, also summarize Outsourcing/manufacturing models. In forth chapter, the paper discovers the reasons that China becomes main country receiving TNCs outsourcing in the world, and influences on China by accepting outsourcing. Finally, the paper makes advices in both macro and micro aspects strengthening capability of acceptance on the basis of comparative advantages. Meanwhile, with service outsourcing is growing, the paper introduces the concept, classification of service outsourcing and makes advices enlarging the opportunity of receiving service outsourcing. The paper holds that through accepting service outsourcing, our service enterprise will be more competitive, as a result our country competence will be strengthened.