Empirical investigation on the magnitude of job offshoring from an organizational contingency perspective : Implications for the American work force

Purpose – The purpose of this paper is to investigate the relationships between the magnitude of job offshoring and organizational contingencies, including total number of employees, multinationality, business diversification, and relevancy of business activities. Design/methodology/approach – Previous studies on job offshoring were restricted in descriptive and prescriptive understanding of the phenomena. Utilizing secondary data, this paper provides empirical findings on the magnitude of job offshoring from an organizational contingency perspective. Findings – The results indicate that larger and multinational firms tend to offshore a larger number of jobs, and less diversified firms tend to offshore a higher ratio of jobs. Also, firms that offshore their core business activities are more likely to move a higher ratio of jobs to offshore destinations. Research limitations/implications – This paper reveals some of the key organizational factors that account for the magnitude of job offshoring within American firms. Practical implications – The findings offer insights in what the government, the society, the workforce need to prepare for future changes and the globalization of business. Originality/value – The paper offers empirical explanations of the magnitude of job offshoring. Various governmental, private, and international institutions may rely on the findings in making political, commercial, and social policies and decisions.