124 research outputs found
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The stability of offshore outsourcing relationships: the role of relation specificity and client control
Offshore outsourcing of administrative and technical services has become a mainstream business practice. Increasing commoditization of business services and growing client experience with outsourcing have created a range of competitive service delivery options for client firms. Yet, data from the Offshoring Research Network (ORN) suggests that, despite increasing market options and growing client quality and cost efficiency expectations, clients typically renew provider contracts and develop longer-term relationships with providers. Based on ORN data, this paper explores drivers of this phenomenon. The findings suggest that providers promote contract renewal by making client specific investments in software, IT infrastructure and training, and by involving clients in outsourcing operations, thereby increasing relation specific joint equity and creating opportunities for client monitoring and control. Interestingly, these strategies apply to routine rather than knowledge-intensive tasks, and are more likely to be applied by large rather than small providers. Surprisingly, high degree of contract specification makes contract renewal less likely. The paper contributes to the growing literature on strategic outsourcing of business services and the importance of governance mechanisms addressing âhidden costsâ as well as âhidden benefitsâ of offshore outsourcing relationships
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From blind spots to hotspots: How knowledge services clusters develop and attract foreign investment
This paper explores local and global dynamics underlying the development of knowledge services clusters, which we define as new geographic concentrations of technical talent and service providers offering upstream technical and knowledge-intensive business services to regional and global clients. Taking a co-evolutionary perspective on the development of knowledge services clusters in Latin America, based on data from the Offshoring Research Network (ORN), we find that cluster growth results from intersecting trajectories: the emergence of local talent pools and capabilities initially serving local and regional demand; broadening global search for talent and expertise by multinational corporations; and internationalization strategies of service providers competing to serve global clients. Findings suggest that increasing commoditization of knowledge services opens up windows of opportunity for new clusters, but also involves challenges for sustainable growth. Results may stimulate future research on global sourcing and cluster development
Managing Global Competition: Japanese Companies in Transition
Much has been wntten about the discontnuities takmg place in the
post industnal society (Galbrath (1967), Marcuse (1968). Bell (1973),
Toffler (1980), Huber (1984), Reich (199l), Lewm and Stephens (1993),
and Ilinitch, Lewin, and D'Aveni, (1998)) which are forcing multinational
companies and heretofore pnmarily domestic companies in
every country and in almost every business sector to re-examine their
management philosophies, strategies and organization designs In
contrast to searching for a single theory of internationalization or for
"the" theory of organizing for global compehhon, this paper focuses on
the sources of vanation as a way of understanding the firm specific
paths of companies' internahonalizahon and their organlzabon forms
The paper extends the concept of equifinality (Katz and Kahn (1978),
Doty, Glick, and Huber (1993). and Gresov and Drazin (1997)) for
compehng in global environment and as a basis for understandmg why and how companies evolve unlque configurations of strategies and
organizahon forms. The paper applies this framework to a discussion of
Japanese companies
The changing rationale for governance choices: early vs. late adopters of global services sourcing
This article studies how the logic of firm governance choices varies as a function of the time of adoption of particular sourcing practices. Using data on the diffusion of global business services sourcing as a management practice from early experiments in the 1980s through 2011, we show that the extent to which governance choices are affected by process commoditization, availability of external service capabilities, and past governance choices depends on whether firms are early or late adopters. Findings inform research on governance choice dynamics specifically in highly diverse and evolving firm populations
Absorbing customer knowledge: how customer involvement enables service design success
Customers are a knowledge resource outside of the firm that can be utilized for new service success by involving them in the design process. However, existing research on the impact of customer involvement (CI) is inconclusive. Knowledge about customersâ needs and on how best to serve these needs (articulated in the service concept) is best obtained from customers themselves. However, codesign runs the risk of losing control of the service concept. This research argues that of the processes of external knowledge, acquisition (via CI), customer knowledge assimilation, and concept transformation form a capability that enables the firm to exploit customer knowledge in the form of a successful new service. Data from a survey of 126 new service projects show that the impact of CI on new service success is fully mediated by customer knowledge assimilation (the deep understanding of customersâ latent needs) and concept transformation (the modification of the service concept due to customer insights). However, its impact is more nuanced. CI exhibits an ââ©â-shaped relationship with transformation, indicating there is a limit to the beneficial effect of CI. Its relationship with assimilation is âUâ shaped, suggesting a problem with cognitive inertia where initial learnings are ignored. Customer knowledge assimilation directly impacts success, while concept transformation only helps success in the presence of resource slack. An evolving new service design is only beneficial if the firm has the flexibility to adapt to change
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