Strategic innovation through outsourcing:the role of relational and contractual governance

There is growing evidence that client firms expect outsourcing suppliers to transform their business. Indeed, most outsourcing suppliers have delivered IT operational and business process innovation to client firms; however, achieving strategic innovation through outsourcing has been perceived to be far more challenging. Building on the growing interest in the IS outsourcing literature, this paper seeks to advance our understanding of the role that relational and contractual governance plays in achieving strategic innovation through outsourcing. We hypothesized and tested empirically the relationship between the quality of client-supplier relationships and the likelihood of achieving strategic innovation, and the interaction effect of different contract types, such as fixed-price, time and materials, partnership and their combinations. Results from a pan-European survey of 248 large firms suggest that high-quality relationships between clients and suppliers may indeed help achieve strategic innovation through outsourcing. However, within the spectrum of various outsourcing contracts, only the partnership contract, when included in the client contract portfolio alongside either fixed-price, time and materials or their combination, presents a significant positive effect on relational governance and is likely to strengthen the positive effect of the quality of client-supplier relationships on strategic innovation

CORPORATE SOCIAL RESPONSIBILITY IN ROMANIA

The purpose of this paper is to identify the main opportunities and limitations of corporate social responsibility (CSR). The survey was defined with the aim to involve the highest possible number of relevant CSR topics and give the issue a more wholesome perspective. It provides a basis for further comprehension and deeper analyses of specific CSR areas. The conditions determining the success of CSR in Romania have been defined in the paper on the basis of the previously cumulative knowledge as well as the results of various researches. This paper provides knowledge which may be useful in the programs promoting CSR.Corporate social responsibility, Supportive policies, Romania

Managing Flexibility in Outsourcing

In recent years, outsourcing has gained considerable management attention. However, the benefits of outsourcing are not without concessions. One major risk is losing the flexibility to change the extent, nature, or scope of the outsourced business services, and such flexibility is strategically imperative in today\u27s dynamic business environment. This paper seeks to clarify the multi-dimensional notion of flexibility in outsourcing by examining robustness, modifiability, new capability, and ease of exit. Adapting from Evans (1991), we also develop a framework to classify existing practices in managing outsourcing flexibility. We go beyond contractual provision to surface a portfolio of pre-emptive, protective, exploitive, and corrective maneuvers. These strategic maneuvers map well to traditional notions in coordination theory, both in advanced structuring through loose coupling and dependency diversification, and in dynamic adjustment through proactive sensing and reactive adapting. We put forward a set of propositions hypothesizing the relationships between the various strategic maneuvers and the different dimensions of outsourcing flexibility, and discuss the moderating impact of such maneuvers on outsourcing success. We hope the greater conceptual clarity will not only contribute to the effectiveness of outsourcing management but also spawn a new research agenda on outsourcing flexibility

Gains and pains from the open innovation framework

While firms increasingly adopt open innovation, little is known about whether firms gain or lose from this innovation approach. Motivated by this research gap in the literature, the thesis explores the antecedents and performance implications of open innovation strategies, particularly collaboration and contractual forms of relationships for innovation (i.e. innovation cooperation and R&D outsourcing/external R&D). The thesis is empirical and relates the various results to the data used. The first one with German Community Innovation Survey (CIS), the second one with Danish CIS and the third one with the patent enhanced German CIS. The empirical analyses suggest that a value-enhancing objective rather than a cost-minimization purpose is the main factor that stimulates companies to engage in open innovation strategies. The research also reveals that firms engage in various innovation strategies simultaneously (i.e. international external R&D, innovation cooperation partnerships and internal R&D), but they fail to combine these instruments successfully for product innovation, implying that the single innovation strategy is performing better than combining different knowledge sourcing strategies in open innovation. Furthermore, the thesis provides evidence that sourcing R&D inputs from a domestic R&D provider can be a risky strategy when a firm aims to generate breakthrough product innovations. Instead, the firm should seek to acquire knowledge inputs from international marketplaces. The research also indicates that those firms outsourcing R&D activities are more likely to generate inventions than their counterparts that do not invest in this R&D strategy. However, this positive performance implication of R&D outsourcing does not appear to hold for invention quality

CGI : reaching out for new sources of revenue in a B2B market context

The case study “CGI: Reaching out for New Sources of Revenue in a B2B Market Context” aims to expose a different side of Marketing – Relational Marketing or Reputation Management – in a Business to Business (B2B) market context. Since it is an area of marketing sometimes overlooked in the classrooms around the world, this case study intends to be an introduction tool for students to the marketing management rationales in B2B services companies. The case study also introduces the outsourcing matters of Offshore and Nearshore, as a way to clarify their relevance and implications in the corporate world. Finally, it intends to be a practical mean for students to develop their critical thinking, as well as information processing, with imperfect and scattered data. Given the unfavorable conditions of the Portuguese market presented in the case, it allows students to grasp the possible constraints a company may face, and what alternatives exist to overcome them

Organizational Responsiveness to Anti-offshoring Institutional Pressures

This study explores the extent to which organizations are responsive to pressures from institutional constituents against offshoring of information technology and business processes. Drawing on a theoretical framework that integrates institutional and strategic explanations, it proposes that organizational responsiveness to anti-offshoring institutional pressures is a function of both the characteristics of such pressures as well as organizations’ prior success with offshoring. Results based on moderated hierarchical multiple regression analyses on survey data from 84 offshoring client organizations indicate the following. First, both greater organizational expectations of enhanced social legitimacy obtained from compliance and mimetic influences from other organizations led to greater organizational responsiveness. Second, despite the strong precedent, organizational dependence on a key pressuring constituent had no effect. Third, both conflict of institutional expectations with organizational goals and greater regulatory environment uncertainty reduced responsiveness. Fourth, surprisingly, organizational success with offshoring had no direct effect on responsiveness. However, it attenuated the otherwise strong positive effect of social legitimacy and exacerbated the negative effect of regulatory environment uncertainty. Implications of these findings for research and practice are discussed

Extending Organizational Boundaries through Outsourcing: Towards a Dynamic Risk Management Capability Framework

Pressure to maintain organizational profitability in an increasingly uncertain business environment is driving executives to seek competitive advantage by increasing their dependence on outsourcing, consciously taking on the associated additional risks. While risk management around outsourcing is traditionally perceived as preventing bad things from happening, this paper extends this view to align it closer to the board and executive leadership strategic agenda, enabling them to consider the full spectrum of potential opportunities that outsourcing could create for their organizations, particularly those that are more radical or transformational in nature. Building on insights from the dynamic capability theory and empirical data collected via survey and follow-up interviews of top executives, we offer a framework that encompasses two new capabilities integral to managing service providers: (a) the capability to have a broader perception of risk in outsourcing that recognizes opportunities that these risks present in addition to the threats and hazards and (b) the “asset orchestration” capability to develop more mature risk-management mechanisms that enable organizations to maximize the opportunity while addressing the risk. The framework provides multi-industry perspectives on gaining competitive advantage and risk mitigation through a newer and more dynamic approach to outsourcing and related risk management

Business models reinvention: from staffing to management consulting case

Despite the high market demand in the staffing business, the dissatisfaction and volatility of employees is a constant risk and the value proposition for customers brings limited value. Besides being purely transactional, this business model makes the creation and development of assets unfeasible as it lacks regulation and is still perceived as one that can be easily imitated. In order to reverse the situation and considering that the management consulting business model is relatively similar in terms of means and is perceived as having sustainable competitive advantages, the objective of this investigation was to propose the transformation of the business model from staffing to management consulting. A total of 62 professionals from 34 staffing and management consulting companies were interviewed, revealing details regarding the various areas of the value chain. A comparative financial analysis and model validation was also performed. Literature review, as well as the analysis of the interviews was supported by text mining techniques. The conceptual model and the conclusions obtained in parallel are certainly useful for the academy, but also for companies and society, since the transformation of the business model represents a combination of different working conditions and formats in the face of current events. There are several findings, but it should be highlighted that in management consulting the profit per employee is on average 87% higher when compared with a staffing employee. Recommendations are also provided to push the limits of thinking, generate new options and, ultimately, to enhance the competitive advantages of service companies.Apesar da elevada procura de mercado, no negócio de staffing a insatisfação e volatilidade dos colaboradores é um risco atual e a proposta de valor para os clientes aporta valor limitado. Além de puramente transicional, este modelo de negócio inviabiliza a criação e desenvolvimento de ativos, carece de regulamentação, sendo ainda percecionado como facilmente imitável. No sentido de inverter a situação e sendo o modelo de negócio de management consulting relativamente similar em termos de meios e percecionado com vantagens competitivas sustentáveis, foi objetivo desta investigação uma transformação do modelo de negócio de staffing para management consulting. Um total de 62 profissionais de 34 empresas de staffing e management consulting foram entrevistados revelando detalhes relativos às várias dimensões da cadeia de valor. Foi ainda realizada uma análise financeira comparativa e a validação modelo. A revisão de literatura, assim como a análise das entrevistas, foi suportada por técnicas de text mining. O modelo concetual e as conclusões paralelamente obtidas são certamente úteis para o meio académico, mas também para as empresas e para a sociedade, dado que a transformação do modelo de negócio representa igualmente uma combinação de condições e formatos de trabalho diferentes face à atualidade. Existem várias conclusões, mas é de salientar que em management consulting o lucro por colaborador é em média 87% superior a um colaborador de staffing. São ainda fornecidas recomendações para ampliar os limites do pensamento, para gerar novas opções e, em última análise, para potenciar o aumento de vantagens competitivas das empresas de serviços

Outsourcing of logistics : a survey of the practices of medium and large kenyan manufacturing firms

A research project in partial fulfillment of the requirements for the degree Master of Business and Administration (MBA), Faculty of Commerce, University of NairobiThe tough economic times in the country have endeared firms to reconsider their options in order to acquire and sustain competitive advantage. To ensure this, they have adopted a number of strategies. There has been a move to strategically manage the operations of the business unit that demands the evaluation of core activities and Competencies as to stay in what the firm-does best or what is the 'raison d'etre' of the firm. However the other activities found to be either non-core or that the firm does not do well still have-to be done. This has led to the outsourcing of these activities to other firms in the industry that could do these activities better and contribute positively in the value addition function of the organisation. Logistics has been identified as one of the functions that are very frequently outsourced by firms. Indeed the study found that about 80% o fthe firms surveyed outsourced at least one activity in the logistics function.The study found that both medium and large sized firms equally outsource logistics services and the ownership of the firm does not have a significant influence on the prevalence of outsourcing of logistics services in Kenyan firms, Firms quoted three reasons as being most influential in outsourcing of the logistical activities. The first one is the need to avail time for other crucial activities for managers. The second is the need to reduce overall cost and the third, the need to make use of the expertise of service providers. The triggers found to lead to outsourcing were the need to improve overall efficiency, need to focus on the core business and the demand from customers for a higher service level. The study found that staff resistance to change was the factor that was an obstacle to the implementation of outsourcing of logistical services. The surveyed firms did not identify any serious pitfalls in the outsourcing of logistical services in Kenya.The evidence for a partnership relationship is not very strong; hence, Kenyan firms need to strengthen their relationship with suppliers for optimal realisation of benefits and value addition for customers. The area of e-logistics is not well developed in Kenya hence investment in the sector could boost trading and enhance operational effectiveness.Outsourcing of logistics if carried out properly is a very important practice for firms in Kenya that may want to maintain competitive advantage in the industry.The tough economic times in the country have endeared firms to reconsider their options in order to acquire and sustain competitive advantage. To ensure this, they have adopted a number of strategies. There has been a move to strategically manage the operations of the business unit that demands the evaluation of core activities and Competencies as to stay in what the firm-does best or what is the 'raison d'etre' of the firm. However the other activities found to be either non-core or that the firm does not do well still have-to be done. This has led to the outsourcing of these activities to other firms in the industry that could do these activities better and contribute positively in the value addition function of the organisation. Logistics has been identified as one of the functions that are very frequently outsourced by firms. Indeed the study found that about 80% o fthe firms surveyed outsourced at least one activity in the logistics function.The study found that both medium and large sized firms equally outsource logistics services and the ownership of the firm does not have a significant influence on the prevalence of outsourcing of logistics services in Kenyan firms, Firms quoted three reasons as being most influential in outsourcing of the logistical activities. The first one is the need to avail time for other crucial activities for managers. The second is the need to reduce overall cost and the third, the need to make use of the expertise of service providers. The triggers found to lead to outsourcing were the need to improve overall efficiency, need to focus on the core business and the demand from customers for a higher service level. The study found that staff resistance to change was the factor that was an obstacle to the implementation of outsourcing of logistical services. The surveyed firms did not identify any serious pitfalls in the outsourcing of logistical services in Kenya.The evidence for a partnership relationship is not very strong; hence, Kenyan firms need to strengthen their relationship with suppliers for optimal realisation of benefits and value addition for customers. The area of e-logistics is not well developed in Kenya hence investment in the sector could boost trading and enhance operational effectiveness.Outsourcing of logistics if carried out properly is a very important practice for firms in Kenya that may want to maintain competitive advantage in the industry