Coordination in Business Process Offshoring

We investigate coordination strategies in the remote delivery of business services (i.e. Business Process Offshoring). We analyze 126 surveys of offshored processes to understand both the sources of difficulty in the remote delivery of services as well as how organizations overcome these difficulties. We find that interdependence between offshored and onshore processes can lower offshore process performance. Investment in coordination mechanisms such as modularity, ongoing communication and generating common ground across locations ameliorate the performance impact of interdependence. In particular, we are able to show that building common ground – knowledge that is shared and known to be shared- across locations is a coordination mechanism that is distinct from building communication channels or modularising processes. Our results also suggest the firms may be investing less in common ground than they should.Coordination; offshoring; modularity; common ground; interdependence

Learning what they think vs. learning what they do: The micro-foundations of vicarious learning

Vicarious learning is a vital component of organizational learning. We theorize and model two fundamental processes underlying vicarious learning: observation of actions (learning what they do) vs. belief sharing (learning what they think). The analysis of our model points to three key insights. First, vicarious learning through either process is beneficial even when no agent in a system of vicarious learners begins with a knowledge advantage. Second, vicarious learning through belief sharing is not universally better than mutual observation of actions and outcomes. Specifically, enabling mutual observability of actions and outcomes is superior to sharing of beliefs when the task environment features few alternatives with large differences in their value and there are no time pressures. Third, symmetry in vicarious learning in fact adversely affects belief sharing but improves observational learning. All three results are shown to be the consequence of how vicarious learning affects self-confirming biased beliefs

Integrating Acquired Capabilities: When Structural Integration Is (Un)necessary

Acquirers who buy small technology-based firms for their technological capabilities often discover that postmerger integration can destroy the very innovative capabilities that made the acquired organization attractive in the first place. Viewing structural integration as a mechanism to achieve coordination between acquirer and target organizations helps explain why structural integration may be necessary in technology acquisitions despite the costs of disruption this imposes, as well as the conditions under which it becomes less (or un-) necessary. We show that interdependence motivates structural integration but that preexisting common ground offers acquirers an alternate path to achieving coordination, which may be less disruptive than structural integration

How Much to Make and How Much to Buy? Explaining Plural Sourcing Strategies

While many theories of the firm seek to explain when firms make rather than buy, in practice, firms often make and buy the same input—they engage in plural sourcing. We argue that explaining the mix of external procurement and internal sourcing for the same input requires a consideration of complementarities across and constraints within modes of procurement. We create analytical foundations for making empirical predictions about when plural sourcing is likely to be optimal and why the optimal mix of internal and external sourcing may vary across situations. Our framework also proves useful for assessing the possible estimation biases in transaction level make-or-buy studies arising from ignoring complementarities and constraints

Scaling nonhierarchically: a theory of conflict-free organizational growth with limited hierarchical growth

Research Summary: We propose a theory that explains variations in the relationship between an organization's size and the extent of its authority hierarchy (as captured in managerial intensity). Conceptualizing authority hierarchy as a means to manage conflicts among subordinates, we formulate a model in which the number of managers required depends on the magnitude of conflicts generated between and within groups of workers. Our analysis shows that scaling non-hierarchically can be accomplished either by creating low conflict “self-managing” teams or reducing conflicts between many “self-contained” teams, but which path is more effective varies by situation. Small initial differences in terms of their emphasis on within vs. between team conflict mitigation can lead to large differences as firms scale over time in the extent of their authority hierarchies. Managerial Summary: Managing without an extensive hierarchy can be attractive for a variety of reasons, but under what conditions is it possible in large scale organizations? We build on the premise that the managerial hierarchy of authority serves to resolve conflicts that employees cannot resolve peer-to-peer (i.e., there are limits to scaling groups that manage themselves consensually). We develop a formal theory that predicts that there are three levers that can slow down the growth of managerial hierarchy even as the organization scales: investing in the technology and culture needed to (a) expand managerial capacity particularly toward the apex of the hierarchy (b) create “self-managed” teams that produce few conflicts in need of managerial resolution and (c) create “self-contained” teams that generate few conflicts between them that need escalation up the hierarchy for resolution. The third is likely to be the most effective lever as organizations grow.info:eu-repo/semantics/publishedVersio

Meta-Organizational Design: Rethinking Design in Inter-Organizational and Community Contexts

This paper provides conceptual foundations for analyzing organizations comprising multiple legally autonomous entities, which we call meta-organizations. We assess the antecedents of the emergence of such collectives and the design choices they entail. The paper identifies key parameters on which such meta-organizations' designs differ from each other. It also presents a taxonomy that elucidates how such forms of collective action vary and the constraints they must address to be successful. We conclude with implications for research on meta-organizational design

Firm as a Coordination System: Evidence from Offshore Software Services

To examine what, if any, are the differences in how activities are coordinated within versus between firms, we conducted interviews with 32 project managers regarding 60 projects in the offshore software services industry. Uniquely, our projects were sampled along two dimensions: (1) colocation versus spatial distribution and (2) delivery by groups of individuals from a single firm versus from multiple firms. Our evidence suggests that in colocated projects, the same broad categories of coordination mechanisms are used both within and between firms. However, there is a qualitative difference in how geographically (i.e., spatially) distributed projects are coordinated within versus between firms. Distributed projects conducted within firms rely extensively on tacit coordination mechanisms; such mechanisms are not readily available in between-firm projects that are spatially distributed. This difference may arise because of the lack of shared history and lack of enforcement through common authority in the between-firm context. </jats:p