A typology of offshoring and outsourcing in electronically transmitted services

Abstract

The offshoring and outsourcing of service work from high-wage to low-wage countries has received considerable exposure in the popular press. Some have claimed that virtually all services that can be electronically transmitted should be offshored due to the extreme labor rate differentials. Relatively little work has actually been offshored to date, making empirical assessment difficult.Here, a normative model of the appropriate role of offshoring is proposed. We present a strategic contingency model, to be viewed at the process level, intimating that firms with the same processes should come to different solutions regarding these decisions. #

Impacts of Risk and Service Type on Nearshore and Offshore Investment Location Decisions

“…For firms located in the US, the NAFTA partners of Mexico and Canada were defined as nearshore host locations. Note that this operationalization is corroborated by the literature (Lapper and Tricks 1999;erber and sayedahmed 2005;Metters 2008;ellram et al 2008) and furthermore these three countries have been party to this free trade agreement since 1994. For firms located in the EU 14 (and consistent with the NAFTA specification), other countries in the EU 14 were defined as nearshore host locations.…”

“…these risks, which include corruption, absence of governance, and the uneven application of laws (e.g., Metters 2008), are especially acute in emerging markets. The concept of cost of doing business abroad (CODBA, Hymer 1976) indicates that firms incur additional costs, compared to local firms, when they enter foreign markets due to the vagaries of the unfamiliar foreign environment.…”

“…As for the context of services offshoring, a recent study found that major concerns for firms regarding offshoring include service quality and cultural fit, both of which are related to the previously mentioned notion of fostering customer satisfaction (Duke University and Archstone consulting 2005b, see also samaddar and Kadiyala 2006;stringfellow et al 2008). Consumers of services may also possess cultural biases (Metters 2008), potentially driving services offshorers toward certain locations. hence, we expect cultural differences to be an important control variable in the current study.…”

In-House Globalization: The Role of Globally Distributed Design and Product Architecture on Product Development Performance

“…On the other hand, when a firm distributes its product development efforts, it gains freedom in task assignments. In a manner similar to many strategic partnerships, offshoring and outsourcing arrangements (Jarillo 1988, Venkatraman 2004, Metters 2008) in which firms capitalize on the expertise of specialists, we expect to see subsystems to be assigned to those locations with the highest competence (e.g., better technical and labor resources). If this is the case, then…”

Stakeholder Perceptions of Offshoring and Outsourcing: The Role of Embedded Issues

“…Our framework and definitions are based on the definitions and similar frameworks that have appeared in Sako (2006) and Metters (2008). The baseline against which we compare the decisions to offshore, outsource, and offshore outsource is relocation.…”