Offshoring of Application Services in the Banking Industry – A Transaction Cost Analysis

Gaining economic benefits from substantially lower labor costs has been reported as a major reason for information systems (IS) offshoring. However, many offshoring projects have failed to achieve expected cost savings, indicating that labor cost savings are offset by additional costs that arise in offshoring projects in certain situations. While previous research on IS offshoring has mostly focused on management issues in offshoring, the focus of this paper is to improve our understanding why the realization of economic benefits varies substantially between offshored software projects. Based on a conceptual framework from transaction cost economics and empirical data from an in-depth case study involving six software development and maintenance projects that were offshored to software vendors in India by a major German financial services organization, two research questions are studied. First, what types of additional costs may arise in offshored software projects? Second, how and why do additional costs vary between projects, considering both task and offshore characteristics? The findings from our analysis indicate that offshoring can lead to increased effort on the client side, both in terms of production costs (requirements specification, knowledge transfer, conceptual development) and transaction costs (vendor coordination, and control). These additional costs are particularly high when the outsourced function is highly asset specific. Moreover, offshore country characteristics such as cultural differences, geographic distance as well as vendor characteristics such as the degree of personnel fluctuation and lack of absorptive capacity can lead to cost add-ons at the client side – in particular when a high degree of human asset specificity is involved in the offshored software projects

Perils of the High and Low Roads: Employment Relations in the United States and Germany

[Excerpt] The U.S. crisis is characterized by growing income inequality, a shrinking safety net, and the decline of worker representation. Like the German crisis, it is caused in part by intensified global competition. Unlike in Germany, problems in the United States have also been exacerbated by deregulation, short-term horizons (e.g., quarterly reports to shareholders), and the decline of the labor movement. Both Germany and the United States, however, have substantial political, economic, and social resources to use in solving their problems. The contemporary crises do not appear for either of these countries to foreshadow a major collapse like that of the Great Depression. We are confident that actors in Germany and the United States can and will pursue reforms, including policy innovations and negotiation. In so doing, we suggest that these societies—the two strongest western economies—have a great deal to learn from each other and from their common experience in the global economy. They do not need, and are unlikely to get, convergence. Yet, each could benefit significantly by adopting elements and aspects of the other\u27s institutions, practices, and policies. In this chapter, the focus is on employment relations, which we believe are central to the broader economic and social problems in each society. We consider the following two interrelated questions. First, exactly how do the internal and external pressures on employment relations emerge in each country? Second, in what tangible forms do these pressures appear on the ground, where labor and business (and, more indirectly, other political, social, and economic actors) interact to perpetuate, alter, or scrap certain modes of production, including service delivery, work organization, and negotiation

An eclectic theory of entrepreneurship: policies, institutions and culture

Analyse van de factoren (bijv. economische en sociale) die het niveau van ondernemerschap bepalen. Het niveau van ondernemerschap kan verklaard worden door onderscheid te maken in aanbodzijde (arbeidsmarkt) en vraagzijde (productmarkt) en de invloed van overheidsmaatregelen op ondernemerschap. Het ontwikkelde model kan gebruikt worden om de verschillen in ondernemerschap in tijd en plaats te verklaren.

Corporate Social Responsibility: Organizational Strategy for Sustainable Growth

We often cast a question whether unethical behavior (corporate irresponsible activities) undertaken by international firms in developing countries is really entirely unethical or simply unavoidable grease, which is necessary to facilitate short-term growth in overseas markets. Both strategic management and international business scholars have long attempted to examine the outcomes of corporate social responsibility (CSR) primarily in the organizational strategic aspect. Due to this, they are turning a blind eye to firms’ unethical attitude and pretending not to notice that it is happening. In other words, we do not yet know enough about CSR from a long-term perspective and its relationship with sustainable growth for the long-term. We should also acknowledge that a firm’s unethical management is both a primary cause and a result of poverty in our economy, which means that a firm’s irresponsible activities (as an antonym of CSR) cannot be justified by any reason. This also represents the importance of research exploring CSR. We believe that this is the time to, first, synthesize diverse research fragments on CSR, second, combine it with an additional unique agenda (e.g., human rights, win-win partnership, official development assistance) particularly in the sustainability domain, and then third, compile all the theoretical and empirical pieces for organizational sustainability. By inviting submissions from researchers who studies various theoretical perspectives, adopts varied empirical approaches, and examines at multiple levels of analysis, as well as qualitative and quantitative experiments, literature reviews, and meta-analyses, this SI draws a big picture. We are strongly convinced that papers accepted by this SI significantly contribute to current relevant debates by filling many extant research gaps

Deep Integration, Global Firms, and Technology Spillovers

This open access book explores the impact of deep regional economic integration on spillovers of knowledge and technology across countries. Deep integration through signing deep regional trade agreements (DRTAs), which cover various policy areas in addition to tariff reductions, may or may not facilitate technology spillovers among their signatories. To understand the mechanism of the impact of deep integration on technology spillovers, this book starts by analyzing the behavior of global firms. Factors that affect global firms’ activities, such as export, foreign direct investment (FDI), offshore outsourcing, are examined. Micro data on Japanese firms are employed for the analysis. Then, the relationships between bilateral trade patterns and technology spillovers and between types of FDI and technology spillovers are investigated in detail. Patent citation data are used to measure technology spillovers. Finally, the impact of DRTAs on international technology spillovers is analyzed. This book is highly recommended to readers who are interested in the effects of deep regional integration, including academic scholars, policymakers, and graduate students

Unmet goals of tracking: within-track heterogeneity of students' expectations for

Educational systems are often characterized by some form(s) of ability grouping, like tracking. Although substantial variation in the implementation of these practices exists, it is always the aim to improve teaching efficiency by creating homogeneous groups of students in terms of capabilities and performances as well as expected pathways. If students’ expected pathways (university, graduate school, or working) are in line with the goals of tracking, one might presume that these expectations are rather homogeneous within tracks and heterogeneous between tracks. In Flanders (the northern region of Belgium), the educational system consists of four tracks. Many students start out in the most prestigious, academic track. If they fail to gain the necessary credentials, they move to the less esteemed technical and vocational tracks. Therefore, the educational system has been called a 'cascade system'. We presume that this cascade system creates homogeneous expectations in the academic track, though heterogeneous expectations in the technical and vocational tracks. We use data from the International Study of City Youth (ISCY), gathered during the 2013-2014 school year from 2354 pupils of the tenth grade across 30 secondary schools in the city of Ghent, Flanders. Preliminary results suggest that the technical and vocational tracks show more heterogeneity in student’s expectations than the academic track. If tracking does not fulfill the desired goals in some tracks, tracking practices should be questioned as tracking occurs along social and ethnic lines, causing social inequality

Non-technological and non-economic innovations: contributions to a theory of robust innovation

Although the label innovation is applied to almost everything, with even the diffusion of innovations to society being called innovation, innovation research remains focused on bringing technology to the economic market. this dissonance provoked the central questions discussed at the 2nd International Conference on Indicators and Concepts of Innovation (ICICI). What are non-technological and non-economic innovations? What impact do these innovations have on the economy? Are there actually purely techno- logical or economic innovations? Consisting of selected answers to these questions, this volume presents international approaches beyond the technology to market main- stream of innovation research as well as analyses of socially robust innovations that succeed in both economic and non-economic markets and are hence more sustainable and more profitable. the 2nd ICICI has been supported by the SCoPES program of the Swiss National Science Foundation

Examination of existing facilities management approaches to climate change and future directions

It is widely accepted that human activities have contributed to changing the world’s climate and that the pace of this change is ever increasing. Two approaches are being promoted by the international community to address the issue of climate change (1) Mitigation, seeking to reduce the amount of CO2; (2) Adaptation, which seeks to alter the way humankind live and work in response to the changing climate. Whilst facilities managers and their organisations have prioritised mitigation action, there is less evidence to suggest that they are addressing the implications that a changing climate may have on the demands being placed on their organisation’s hard and soft facilities (adaptation). This paper reports findings from a case study and questionnaire survey to ascertain the present approach taken by facilities managers to address mitigation and adaptation, their respective drivers, their view on climate change and their environmental inclination. It concludes that the facilities manager's approach to climate change is derived by a combination of factors; namely a) Organisation approach to climate change b) Legislation and c) the facilities mangers perception of the risks posed by future climate change and of the use of risk assessment methods and climate change projection data. The study concludes that the prevailing measure for addressing climate change impacts is reactive in nature, taking the form of Disaster Recovery and Business Continuity Planning. The practical implication of the work is in the realization that mitigation, being quantifiable and legislative driven, is viewed as a strategic issue and of importance to an organisations Corporate Social Responsibility agenda which can be planned over the longer term (10-20 yrs). Adaptation on the other hand is measured through successful survival, increased resilience and adaptive capacity (absence of quantitative performance target), each of which are viewed as short term operational issues and as such adaptation struggles to find strategic importance. If organisations are to adapt to inevitable climate change then this situation needs to change