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Relocation of US Companies

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The declining education standards in the US has contributed marginally to the shifting and
outsourcing of most of technical and operational functions of most US multinational
companies to foreign countries. The relocation of operation units of large companies like
Nike Inc to Asian countries and other countries globally can be attributed largely to the
expensive labor market in the US, favorable taxation concessions in foreign countries and

the availability of skilled manpower in foreign markets.

Doctoral Study Submitted in Partial Fulfillment
of the Requirements for the Degree of
Doctor of Business Administration

 Draft Doctoral Study Proposal

(Relocation of US Companies) 2


The education standards in the US have been for many years below the average of
most European education standards. The Office of Educational Accountability that
operates under the Department of Public Instruction (DPI) coordinates all the testing
programs that are administered on all elementary and high school pupils in the US
through various assessment tests. DPI has for several years registered dissatisfaction with
the declining education standards in the US (Bradley, 2010).
Most companies in US are relocating to countries where labor is cheap and
efficient. Despite the low standards of education in the US, the government spends
almost twice the cost of education per pupil than in an average Asian country.
Education reforms in the US have targeted improvement in pupil assessment
programs as a response to the reduction of academic standards especially in areas that
need critical thinking. There is evidence however that large disparities exists between the
performance standards of males and females, whites and the minorities and also between
families that are economically advantaged.
A lot of research work has been carried out to determine the nature of assessment
required to demonstrate the real abilities of pupil’s performance in schools. The current
structure of standardized tests that allow pupil comparisons in schools and states has been
largely criticized as culturally biased and its emphasis is on less significant factual
knowledge. The standardized tests rate memorization skills higher than critical aspects of
complex in-depth thinking. To address the shortfalls of standardized, performance based
assessment were introduced to provide better information on pupil’s academic abilities.
The performance was however below average for most of the pupils in grade 4
and 8 as elaborated in table 1 (Merrifield, 2009, pg 2). This research paper seeks to
determine the relationship between performance of pupils in schools and the performance
of corporate managers in US multinational companies.
Problem Statement

According to the The Atlantic (2013, December) American Education Standards
are mediocre compared to the rest of the world especially in mathematics and science.
The international rankings of OECD states placed the US at number 17 among the 34
OECD in mathematics scores while in science and reading it’s ranked at number 21 and
17 respectively.
The falling education standards reflect poorly on US research policies and the
continuing role as the leading country in digital technology and in other scientific and
medical research fields. The reasons behind the mediocre performance in international

(Relocation of US Companies) 2
assessment on all OECD countries must be analyzed and evaluated despite heavy funding
of education in all the states by the federal government.
The research question is the need to identify the reasons why majority of US
companies are relocating to other countries abroad. This could be because the availability
of cheap human capital that is also efficient. Children and teenagers continue performing
poorly in mathematics and science subjects (Hawkes, 2015). The research should include
past pupils performance in the current job market and it should be inclusive of all pupils
from diverse backgrounds including races and ethnicities. Regions that are more
populated with Caucasian communities perform better than regions that are more
populated with African American population, Hispanics or Asian communities. The
research should identify the specific performance of each race and ethnicity in a sampled
region within the US that would represent the general population in the US.
The future of the US multi-national companies can only be assured if the current
generation can replace the outgoing generation with competent and skilled managers who
are innovative and capable of venturing into the future with confidence and vigor.
The education standards remain the biggest challenge to human capital
development in the US today. The academic background and experience of new staff
determines their productivity to organizations.
The general business problem is that most companies have a problem identifying
the right people for senior positions. A number of recruitment agencies have increased
due to the existing gap in human capital development in the US. Most companies lack
innovative leadership hence have specific problems of growth and expansion after a few
years of growth and development (Mills, 2011). 
Purpose Statement

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The purpose of the research study is to identify the reasons why US companies
are relocating to foreign countries thus denying the local population employment
Majority of top management technocrats in most multi-nationals are targeting
foreigners who are well educated and skilled in advanced disciplines. The case study
would reveal the extent of education standards in the country and the comparisons to
former years. The performance of US corporate managers would also be scrutinized to
analyze the impact of low education standards in their productivity.
The study would be conducted in Wisconsin but the performance of specific
pupils would be traced to their job location in the market and their current productivity
compared to their past performance in school. The nature of the research would be mixed.
The interviews would be carried out intensively and individual performance extensively
compared with others from the same classroom and their performance compared on the
job market (Migiro & Magangi, 2011).

Research Question

The effect of low education standards in business innovation and productivity in
business management. The study would also determine the future impact of low
education standards in US business environments and the performance of future
American companies.

Theoretical or Conceptual Framework

Disruptive innovation is a concept that assists in creation of value network and
new market by disrupting the existing markets either by introduction of new innovations
or cost reductions. Sustaining or maintaining innovation creates no value for competiting
companies (Manyika, 2013). 
This study undertakes to establish the role of education in business regarding the
impact of strategic innovation in business expansion and growth. High technology led to
the invention of the smart phones that displaced the original mobile phones and now the
advanced iPads are replacing laptop computers and mobile phones. Clayton and Overdorf
(2000) introduced the concept of disruptive technologies which tilted the balance in favor
of the current innovations that reinvented business models like in most American multi-
national companies today. For example, the introduction of digital technology has
revolutionized all the sectors of the economy including banking, insurance and
entertainment industry.

Significance of the Study

The significance of the study is to reveal the reasons why US multinational
companies are relocating to overseas countries. The study would also reveal if there is a
connection between the low standards of education in the US and the relocation of
companies to foreign countries (Sekaram & Bougle, 2009).
The competitive nature of the global business requires CEO’s who are equally
competitive universally. The best companies survive when the companies adopt the best
policies from the best CEO’s. The current high unemployment rates that continue to rise
in the US can only be countered effectively by ensuring competent education standards in
the US are maintained (Clayton, 2003).  Skilled and professional manpower is a useful
asset in any country including the US and full dependency on foreign nationals to manage
American companies would certainly result in more outsourcing of talents outside the
country hence the unemployment rates would continue to rise.

(Relocation of US Companies) 2
Bradley, N. (2010) Marketing Research. Tools and Techniques. Oxford University Press,
Clayton, C.M. & Overdorf, M. (2000). “Meeting the Challenge of Disruptive
Change” Harvard Business Review, March–April 2000.
Clayton, C.M. (2003). The innovator’s solution: creating and sustaining successful
growth. Harvard Business Press.
Hawkes, C. (2015) An Example with Qualitative and Quantitative research
Merrifield, L. (2009) Pupil Assessment, Wisconsin Legislative Fiscal Bureau,
Informational Paper 32

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