Background Notes

International Sourcing Survey 2009-2011

Background Notes

Survey Design

The International Sourcing Survey was carried out between July and December 2012.  It used the CSO eForms which allows respondents to complete the questionnaire via an internet portal.  It was a census of all enterprises in Ireland with 100 or more employees in the Irish business economy (NACE Rev. 2 sectors B to N excluding K).  Enterprises were identified using the CSO Central Business Register. The survey was issued to 1259 enterprises and the overall response rate was 44.3 per cent.  Full details of the response rates for the main sectors are outlined in the table below.

Definitions

International Sourcing

Sourcing refers to the movement of business functions from an enterprise to another enterprise within or outside the enterprise group.  The movement of business functions within Ireland is referred to as domestic sourcing and the movement of business functions outside Ireland (including previously domestically sourced functions) is referred to as international sourcing.

Please note that this survey enquired specifically about international sourcing of business functions during the period 2009-2011.  Therefore, an enterprise was not counted as having engaged in international sourcing if the movement of the activity occurred previous to 2009. 

Enterprise group

An enterprise group is a set of enterprises controlled by the group head. It is an association of enterprises bound together by legal and/or financial links.  A group of enterprises can have more than one decision-making centre, especially for policy on production, sales and profits.  It may centralise certain aspects of financial management and taxation.  It constitutes an economic entity which is empowered to make choices, particularly concerning the units which it comprises.  The most extensive version of an enterprise group includes affiliates, sister enterprises, the parent enterprise and even joint ventures.

Control

Control means the ability to determine the general policy of an enterprise by choosing appropriate directors, if necessary.  In this context, enterprise A is deemed to be controlled by enterprise B,  when B controls, whether directly or indirectly, more than half of the shareholders voting power or more than half of the shares in enterprise A.

Indirect control means than an enterprise may have control through another affiliate which has control over enterprise A.

Control can be exerted via effective minority control without owning more than half of the shareholders voting power or more than half of the shares.

Group Head      

The group head is a parent legal unit, which is not controlled either directly or indirectly by any other legal unit, controlling one or more enterprises.  In the case of multinational enterprise groups global and domestic group heads can be identified.  The global group head is the group head of the multinational enterprise group, the domestic group head is on the top of the truncated national part of the multinational enterprise group.

Subsidiary

A subsidiary is a legal unit which is controlled either directly or indirectly by another legal unit in an enterprise group.

Business Functions

Core business function:

This function is the primary activity of the enterprise and will in most cases equate with the main activity of the enterprise.  It includes production of final goods or services intended for the market/for third parties carried out by the enterprise and yielding income.  The core business function equals in most cases the primary activity of the enterprise.  It may also include other (secondary) activities if the enterprise considers these to comprise part of their core functions.

Support business functions:

Support business functions (ancillary activities) are carried out in order to permit or facilitate production of goods or services intended for the market/for third parties by the enterprise. The outputs of the support business functions are not themselves intended directly for the market/for third parties.

The support business functions are divided into:

• Distribution and logistics consists of transportation activities, warehousing and order processing functions.
• Marketing, sales and after sales services including help desks and call centres.  This consists of market research, advertising, direct marketing services (telemarketing), exhibitions, fairs and other marketing or sales services.  Also including call-centre services and after sales services such as help-desks and other customer supports services.
• ICT services include IT-services and telecommunication.  IT services consist of hardware and software consultancy, customized software data processing and database services, maintenance and repair, web-hosting, other computer related and information services. Packaged software and hardware are excluded.
• Administrative and management functions includes legal services, accounting, book-keeping and auditing, business management and consultancy, HR management (e.g. training and education, staff recruitment, provision of temporary personnel, payroll management, health and medical services), corporate financial and insurance services.  Also including procurement functions.
• Research & Development, engineering and related technical services include R&D, intramural research and experimental development, engineering and related technical consultancy, technical testing, analysis and certification.  Design services are included as well.
• Other support functions are all other functions not previously mentioned, including manufacturing as a secondary activity for services enterprises.

Classifications

Geographical Areas

The geographical areas used in this survey are as follows:

• United Kingdom
• EU15: (excluding UK and Ireland): Belgium, Denmark, Germany, Greece, Spain, France, Italy, Luxembourg, Netherlands, Austria, Portugal, Finland and Sweden
• EU12: Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia, Slovak Republic, Bulgaria, and Romania
• Russia
• Other European countries: Switzerland, Norway, Turkey, Belarus, Ukraine and the Balkan states
• China
• India
• Oceania and other Asian countries: Includes Japan, Korea, Near-, Middle- and Far-East, and Oceania (including Australia and New Zealand)
• USA and Canada
• Brazil
• Rest of the world: Includes Mexico, South and Central America (except Brazil) and Africa

NACE Rev.2 is the statistical classification of economic activities. NACE is an acronym for 'Nomenclature Généraile des Activities  Économiques dams les Communautés Eurpéenes' (General Industrial Classification of Economic Activities withn the European Communities).

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