October 2003
The impact of global competition and outsourcing has brought about some of the greatest—and most controversial—changes in American economic and business history. Because of the pervasive affects of these factors, the Business Division has developed a series of panel discussions devoted to understanding these trends and determining whether they represent threats or opportunities for the region’s economy and B-W’s undergraduate and MBA students. Each panel will consist of executives from regional corporations which face international competition and outsourcing. To assure the relevance of the discussion to all students, the panel will be moderated by a group of Business Division undergraduate and MBA students.
“What are the implications of global competition and outsourcing to the business and citizens of northeast Ohio? Do countries such as India and China with 40 percent of the world’s population represent a regional threat or opportunity?” asked Dr. Peter Rea, chair of B-W’s Business Division. He said that while global markets offer regional corporations lower costs and growth opportunities, global logistics facilitate off-shore manufacturing and customer service and raise the question of what functions should a firm retain in the U.S. He noted that global outsourcing is no longer limited to manufacturing —white-collar positions are being outsourced as easily as blue-collar jobs.
“These are serious issues affecting our students and our region’s economy. B-W is committed to participating in the debate and contributing to the response to these vital public issues,” Dr. Rea said.
In or Out? The Business Case for Global Outsourcing -Monday, October 20, 2003, 8:00 p.m. in Strosacker Union will address the common reasons to outsource, including growth, cost reduction, focusing on core capabilities, importing knowledge into the firm and rapid cycle product development. Panelists are Christopher M. Connor, chairman and CEO, The Sherwin-Williams Company; Curtis E. Moll, chairman and CEO of MTD Products, Rosalind Thompson, executive vice president, human rescources, Jo-Ann Stores, Inc.; and Andrew J. Banks, chairman and CEO of Mid-America Consulting Group, Inc. Each panelist represents organizations facing the outsourcing issue and will share those experiences.
The second discussion in the series will be held in the spring. In or Out? Regional Economic Development and Employment: Outsourcing Threats and Opportunities tackles the impact of global ompetition and outsourcing on the region’s population.
• What happens to companies if they are unaware of the international competition they face?
• What happens to regions where companies are not growing internationally, or when its manufacturers invest in China or India, but not in the U.S.?
• What is the region doing to remain competitive at a global standard?
• Is outsourcing a growth opportunity for small business?
• How must executives, MBA and undergraduate students respond to these trends?
• Are there employment opportunities in outsourcing and international business?
• How will outsourcing impact income?
Globalization Raises Critical Strategic Issues
Issue: The Margin Squeeze
• Corporations are struggling to generate profit while fighting to retain customers and reduce costs to confront downward pressure on prices.
• U.S. small and mid-capital manufacturers fight to maintain profit margins while competing with off-shore, low-wage companies and selling to large retailers that offer high volume only in exchange for low prices.
• Many U.S. corporations have legacy costs–pension and health care obligations that competitors in other nations do not carry.
Issue: The Value Chain
• Global logistics involves a complex mix of production, transportation, warehousing and finance combined with new tools such as global satellite tracking and the Internet designed to execute just in time delivery despite the security challenges since 9/11.
Issue: Industry Overcapacity
• Globalization is resulting in overcapacity in virtually every U.S. business sector. Excess global capacity contributes to intense price competition and may result in the consolidation of industries such as
metals, banking, retailing, airlines, information services and manufacturing.
Issue: Public policy implications
• Free trade offers the benefits of economic growth, low prices and consumer choice.
• How should we deal with the consequences of employment and damaged
regional economies and cultures?
• How should governments maintain their sovereignty as capital, manufacturing and jobs move easily across borders diffusing the traditional power of nations?
Issue: How will global trends affect B-W students and local executives?
• What types of jobs will be available given the trend of outsourcing?
• What kind of educational preparation will be needed to succeed in a global economy?
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