Offshoring to China and India: Case Studies of Italian Small-Medium-sized Firms

This article discusses the prospects and problems facing Italian small and medium sized enterprises that have recently engaged in direct investment through the establishment of production facilities in China and India. Using data gathered from 15 interviews conducted in those countries in 2009, firms are grouped for analytical purposes into clusters according to the strategies that combine firms specific advantages with exploiting differences across national borders. Highlighted are important influences (such as key decisions, costs and constraints) that should be considered when analyzing the management of a small multinational firm in an international context. Motivations behind Italian parent companies’ decisions to create subsidiaries in China or India; relations between newly established production facilities and their local suppliers and markets; and the cultural and administrative difficulties the enterprises have encountered, and any subsequent organizational adaptations, are all taken into account. In the conclusions, the benefits to the participants in the delocalisation process are detailed, and possible future management strategies are discussed.