Maintaining competitiveness: the case of New Zealand small-medium technology manufacturers

The purpose of this study was to understand how New Zealand small-medium sized firms within the high technology manufacturing industry maintain their international competitiveness through offshore sourcing to China. This study was conducted using the philosophical position of post-positivism within the interpretive framework and multiple case studies as a strategy of inquiry and stories of offshore sourcing to China told by three entrepreneurs during in-depth, semi-structured interviews which were analysed. Using the metonymic title of maintaining competitiveness, theoretical constructs developed from the findings were integrated into a framework and discussed in the light of relevant literature. The results suggest that offshore sourcing impacts these firms in two ways. First, the initial impacts of offshore sourcing provide significant benefits including cost savings, quality improvements, and opportunities to access new markets (which are offset by operational issues including quality fade and the intellectual property (IP) protection concerns, as well as challenges of operating internationally, managing cultural differences, Chinese local officials, and labour issues). The second impact is the dynamic process of evolving governance of these firms’ practices in China, based on their network and the incremental knowledge about this particular geographical location. The results illustrate that maintaining a firm’s international competitiveness through offshore sourcing can be challenging but manageable, but one that can offer an opportunity for a stronger and competitive market position. Policy makers, educators, and entrepreneurs can benefit from the findings in this study as it highlights factors critical to offshore sourcing and its contribution to international competitivenes