ADAPTABILITY OF VIETNAMESE SMEs TOWARD OUTSOURCING TREND

Abstract

This article is to determine the adaptability of Vietnamese SMEs (small and toward international outsourcing trend. Organizations in developed countries usually find some less developed countries within which they may outsource
operations. Outsourcing has become an effective good way for companies to increase profits by reducing production costs. This is attractive to less developed and developing countries as it encourages economic growth. However, to become an attractive destination of outsourcers, these developing countries need to possess high level human resources, attractive policies and business climate in conjunction with excellent infrastructure but low operation costs. Vietnamese SMEs only focus on labor-based outsourcing services which can bring about much lower benefits than aknowledge based services. A survey was done to get the viewpoints of Vietnamese SMEs’ managers about outsourcing requirements. After that we use the zero-sum method to determine which factors Vietnamese SMEs’ managers think the outsourcers should consider the most important when seeking outsource destination. Beside, we also base on background knowledge to understand Vietnamese SMEs’ entrepreneurship basing on this aspect. The result shows that Vietnamese SMEs think costs, especially labor costs, operation costs and administration costs are most important elements encourage outsourcers choose an outsourcing place.