Managing International Sourcing and Manufacturing in an Allegedly Stalled Globalization - A multiple case study exploring SMEs’ international sourcing and manufacturing and the trend of the world economy

Abstract

There have been significant events in recent years that have raised concerns about the trend of the world economy. Scholars believe these events have disrupted businesses, causing them to reconsider their GVCs, including supply chains and GPNs. Previous research indicates that the world is becoming more uncertain, and international organizations are now seeking security. The uncertain environment has led to a suggested trend of reshoring international activities as a way to handle disruptions. Thus, the trend of the world economy is increasingly speculated to be characterized by stalled globalization. However, scholars have differing opinions, some suggest regionalization or even increased globalization as potential trends to address the changing external environment. This study aims to explore how Swedish manufacturing SMEs manage their international sourcing and manufacturing in a world experiencing a changing external environment. Through a qualitative multiple case study, including interviews with managers of ten Swedish SMEs, we gained insight into the implemented and planned actions for their international sourcing and manufacturing. Our findings indicate that businesses are taking modest actions to adapt to the changing environment, with a continued focus on efficiency and networks. Reshoring is considered a radical action, only necessary when quality worsens, business relationships deteriorate, or resources and competence availability are at risk. The current trend of the world economy is toward continuing globalization, with some movement towards regionalization due to regulations, sustainability requirements, and a desire to be closer to home.