Framing the Offshoring and Re-shoring Debate : A Conceptual Framework

The debate about offshoring has been a part of both academic literature and mainstream news media for the last two decades. Recently, re-shoring has also been gaining popularity in academic and news media circles. On one side of the debate is the argument that offshoring business operations is an important part of a globally competitive business environment, which requires companies strategically positioning themselves in the global marketplace. On the other side of the debate is the argument that offshoring is a miscalculated business decision that is a lot costlier than initially envisioned. The argument continues that once the companies realize the true cost of offshoring, they will re-shore their operations to the US. This paper develops a conceptual framework and research agenda to further advance the debate theoretically and offers policy implications for businesses and host and home countries. This paper argues that the offshoring and re-shoring debate requires a multi-level analysis that takes into account (a) global environmental constraints and opportunities, (b) home country opportunities and constraints, (c) business strategy, (d) host country opportunity matrix and changes in opportunity matrix, and (e) business responses to the changing host country opportunity matrix