Making Reshoring Decisions - the Case of a Norwegian Manufacturing Firm
Master thesis
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http://hdl.handle.net/11250/2566874Utgivelsesdato
2018Metadata
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Relocating activities to low-cost countries has been, and still is, a prevalent
method of reducing production costs for manufacturing companies. In recent
years, however, many companies have reconsidered this strategy, and started
to move activities back to their home country. Opportunities to reduce labor
costs through automation have certainly contributed to this process.
The rationale behind the phenomenon, called \reshoring", has been discussed
to a large extent in current research literature. How companies make
such reshoring decisions, on the other hand, is generally under-researched
(Wiesmann, Snoei, Hilletofth, & Eriksson, 2017). This will be the primary
focus of this master's thesis, which aims to understand the role of managerial
accounting information in reshoring decisions. In order to understand this,
we have adopted a single case study methodology. Two embedded cases in
a Norwegian manufacturing company have been studied by interviewing key
decision-makers.
We found that the company had a rather pragmatic approach to decisionmaking.
Financial and non- nancial information were integrated by using a
multi-criteria analysis method. This approach did not emphasize the quanti
cation of qualitative factors, but drew on the experience of decision-makers
to weigh qualitative factors. Important factors such as proximity to innovation
environments, protection of intellectual property, and e ciency of
communication without cultural boundaries had signi cant in
uence on the
decision. These factors are acknowledged by literature, but this thesis provides
more in-depth understanding of how they a ect the reshoring choice.
A model of the company's decision-making process is presented, and is found
to have a distinct resemblance to the generic purchasing process de ned by
van Weele (2014). For this company, reshoring is a special case of sourcing
where the best option is in the home country.
Beskrivelse
Master's thesis Industrial Economics and Technology Management IND590 - University of Agder 2018