Foreign Direct Investments in Business Services: Transforming the Visegrád Four Region into a Knowledge-based Economy?

Foreign direct investments (FDIs) in the service sector are widely attributed an important role in bringing more skill-intensive activities into the Visegrad Four (V4). This region—comprising Poland, the Czech Republic, Hungary and Slovakia—relied heavily on FDIs in manufacturing, which was often found to generate activities with limited skill content. This contribution deconstructs the chaotic concept of “business services” by analysing the actual nature of service sector activities outsourced and offshored to the V4. Using the knowledge-based economy (KBE) as a benchmark, the paper assesses the potential of service sector outsourcing in contributing to regional competitiveness by increasing the innovative capacity. It also discusses the role of state policies towards service sector FDI (SFDI). The analysis combines data obtained from case studies undertaken in service sector outsourcing projects in V4 countries. Moreover, it draws on interviews with senior employees of investment promotion agencies and publicly available data and statistics on activities within the service sector in the region. It argues that the recent inward investments in business services in the V4 mainly utilize existing local human capital resources, and their contribution to the development of the KBE is limited to employment creation and demand for skilled labour

The offshore services value chain : developing countries and the crisis

This paper analyzes the recent evolution and impact of the global economic crisis on the offshore services industry. Using a global value chains framework, the authors classify the offshore services sector in a comprehensive set of general and industry-specific activities that correspond to different segments and stages in the value-adding process for services. Through an analysis of the impact of the economic crisis on the industry, a small decline in demand was found; however this did not cause any structural changes in the market. The crisis has created two opposing effects: general contraction of demand by existing customers due to the recession; and, at the same time, a substitution effect by which new services are being moved from developed countries to emerging economies in search of cost reduction. The paper concludes that the offshore services industry will continue to offer growth opportunities for developing countries not only among existing market players, but also a range of new countries. The industry has the potential to become an important source for employment and economic growth around the globe.ICT Policy and Strategies,E-Business,Water and Industry,Housing&Human Habitats,Public Sector Corruption&Anticorruption Measures

Innovations in outsourcing: the emergence of impact sourcing

Newly emerging information technology and business process outsourcing (IT-BPO) models are not just about business . Some of these models are also guided by a strong underlying social mission to do good and create social value . Collectively they are now being referred to as impact sourcing (ImS) models. In brief, ImS is a social innovation in outsourcing that aims to bring digitally-enabled outsourcing jobs to marginalized individuals. The ImS model of outsourcing consciously provides employment opportunities to communities and groups whose life chances are deemed poor. In this thesis we study ImS companies, i.e., IT-BPO vendor firms, which aim to create a significant impact (hence the term impact sourcing ) on the lives of hitherto disadvantaged and deprived communities by giving them gainful employment and thereby improving their material conditions. Using qualitative methods, the thesis takes multiple approaches to study the ImS model. The thesis is comprised of three empirical chapters, each exploring a different aspect of the ImS model. Chapter 2, using a multiple case-study approach, draws on concepts from social entrepreneurship to study the triggers of ImS entrepreneurship and the process through which ImS entrepreneurs build and operate ImS companies. The chapter also looks into the institutional influences that have shaped the ImS model. Most importantly, the findings demonstrate the inherent difficulty of scaling and sustaining the ImS model, as it is the individual entrepreneurs intense personal experiences, not market-based considerations, which play a crucial role in launching new ImS companies. Drawing on the initial findings of Chapter 2, Chapter 3 explores the challenges of operating ImS companies in marginalized communities. Specifically, the chapter analyzes how ImS companies frame their ventures to the local community, drawing on frame alignment literature. The findings from this chapter suggest that local communities are not passive recipients of ImS companies framing work and may indeed resist ImS company activities for reasons such as the perceived incompatibility of the ImS model with local norms and belief systems and perceptions of inequality stemming from the merit-based recruitment strategies underpinning the model. The chapter finds that deployment of progress, family, material-benefit and egalitarianism frames may help ImS companies to overcome resistance, and gain the acceptance of local communities. While Chapters 2 and 3 focus on the ImS companies and their founders, Chapter 4 analyzes the challenges faced by marginalized individuals as they transition into the ImS workplace from their relatively traditional community spaces. The findings suggest that the distinct norms and values embodied in the community space and the ImS workplace create challenges for ImS employees. In response to these challenges, the findings show that ImS employees craft a variety of coping strategies such as integration and compartmentalization to manage work and non-work boundaries. ImS employees were also found to create fictive kinships, experiment with provisional selves and craft jobs to cope with the socioculturally alien environment of ImS workplaces. Overall, the thesis makes theoretical and practical contributions to the small but growing business and management literature on the ImS phenomenon. The thesis also makes theoretical contributions to the literatures on social entrepreneurship, frame alignment and organizational studies

A Configuration Taxonomy of Business Process Orientation

Organizations strive to develop a variety of capabilities to improve and measure business processes. Researchers have used various maturity models to investigate the development of a business process orientation (BPO), and most have argued that such a development comes in stages. Current literature underestimates the interrelationships between BPO capabilities and fails to consider multidimensional or non-linear paths to maturity. To refine the features of maturity models, this study relies on configuration theory to uncover different archetypes for BPO development and quantitatively evaluate them by examining performance differences among archetypes based on a large-scale international dataset. The resulting empirical taxonomy with seven BPO archetypes establishes important performance differences between organizations at a similar maturity level. Besides strengthening the theoretical foundations of BPO and making maturity assessments more multifaceted, the results help organizations give their managerial efforts a focus by enabling comparison with peers in the same archetype and showing various paths for BPO improvement

Reducing Youth Unemployment in South Africa

South Africa is faced with a crisis of high and rising youth unemployment. Throughout the country, only 1 in 3 young people of working age is employed. This distressing statistic not only plays out through the limited earnings potential and future prospects of these youth, but also emerges within stymied business growth and unsustainable pressure on governmental social programs. The solution will take action from a variety of sectors and actors in order to turn the tide.This report, funded by The Rockefeller Foundation, highlights two cross-sectoral partnerships—the EOH Youth Job Creation Initiative and the Mentec Foundation—that have seen success in placing these disadvantaged youth in jobs throughout South Africa. The report concludes with a table of recommendations for employers, training providers, philanthropic funders, and government officials to begin growing and replicating these efforts.Top TakeawaysThroughout their lives, youth within South Africa are put at an employment disadvantage due to inadequate education and recruiting systems. Despite an estimated 500,000 entry-level vacancies throughout the country, young people often lack the necessary problem-solving skills, business acumen, technological savvy, and communication skills needed for the workplace, and structures that would enable this on-the-job learning (training, mentoring, and coaching) are not standard practice for most workplaces.In order to place more youth in jobs, sectors can bring their unique skills to bear while complementing one another's efforts: government incentives can encourage employers to take calculated risks and reform HR practices; training providers can focus more on skills, including job-readiness skills, that are directly demanded by employers and work with these employers for placement; and funders can strategically deploy grants to such programs and collaboratives.Youth who participate in demand-driven training programs and are then hired into jobs become valuable staff in short order: the youth were more motivated to perform well and assimilated quickly to the work environment

Offshoring of white-collar services: Business and economic perspective

This is one of few books in the market dealing with offshoring of professional services, the dynamic phenomenon of high relevance in the global economy. The unique feature of the book is merging economic and business approaches to offshoring of professional services, so called offshoring of white-collar services. The work contains results of analysis of determinants and impacts on firm and economy levels

The effects of outsourcing practices conducted by organisations in Nairobi

The purpose of this study is to investigate the relationship between outsourcing and development in Nairobi. The key research question for this study is what are the impacts of outsourcing practices conducted by organisations in Nairobi? Data were obtained from questionnaires distributed in December 2010. A total of 85 profit-making firms in Nairobi with a sample of 165 management employees were selected for this study. The empirical findings obtained relate to four outsourcing theories. Transaction Cost Analysis (TCA) Theory focuses on the cost savings that result from outsourcing. Agency Outsourcing Theory centres on outsourcing firms hiring agents to achieve productivity. Hiring agents may result in permanent staff being retrenched and additional outsourcing personnel being contracted and job creation and/or job loss results. Expectation Confirmation Theory (ECT) emphasises the importance of an outsourcing provider conforming to quality management principles. Resource Based Theory (RBT) proposes that organisations need a collection of resources and capabilities to execute outsourcing successfully. Findings further suggested that outsourcing can yield positive and/or negative outcomes depending on risks encountered, the business environment, company policies, function/s to be outsourced, and the competence and commitment of an outsourcing vendor. To further enhance the positive impact of outsourcing three improvements need to be executed: formulation of standard policies, price regulations, and commitment of outsourcing firms in adhering to set contract deadlines. It is suggested that the following would allow organisations to gain more from outsourcing in the future: the adoption of international/offshore outsourcing practices, more commitment by outsourcing consultants, the standardisation of charges for outsourcing contracts, and the use of new technology that would improve how outsourcing is conducted. It is concluded that the positive impacts of outsourcing would foster development to some extent while the possible negative impact of outsourcing would impede development