Structure offshoring and returns on offshoring

Lo, Yi-Ju; Hung, Tung M.

doi:10.1007/s10490-014-9405-9

Cited by 5 publications

(4 citation statements)

References 105 publications

(263 reference statements)

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“…Selected empirical studies examining the effect of disaggregation/dispersion/governance structure on global sourcing performance Paper Performance outcome examined Disaggregation Gualandris et al (2014) Environmental and social performance Larsen (2016) Process performance (flexibility, quality, productivity, profitability, costs demand) Dispersion Fuchs and Kirchain (2010) Economic viability of production Ambos and Ambos (2011) Location specific factors in R&D offshoring Hutzschenreuter et al (2011b) Time to achieve cost savings and time to achieve expected service level Mauri and Neiva de Figueiredo (2012) Change in return on sales Murray et al (1995) Market performance Asmussen et al (2016) Financial performance Lampert and Kim (2019) R&D performance Rosenbusch et al (2019) Innovation performance Governance structure Nieto and Rodríguez (2011) Innovation outputs Schneider et al (2013) Price, quality, delivery lead time, delivery fill rate, and flexibility of global sourcing Steinberg et al (2017) Innovation performance Mazzola et al (2019) Innovation performance Disaggregation and dispersion Lo and Hung (2015) Service quality, productivity, organizational flexibility, firm growth Dispersion and governance structure Massini et al (2010) Cost savings Elia et al (2014) Service quality and cost savings Caniato et al (201...…”

Section: Tablementioning

confidence: 99%

Designing Global Sourcing Strategy for Cost Savings and Innovation: A Configurational Approach

Lin

2020

Manag Int Rev

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Despite the well-acknowledged benefits of global sourcing (e.g., location specific advantage) in the international business literature, research driven mainly by the transaction cost economics and resource based view has cautioned about its potential negative effects (e.g., hidden costs, hollowing out effect) which might offset its potential gain, leading to a failure to achieve expected outcome and capture the value created in global sourcing activities. We argue that this issue is primarily explained by the misalignment between a firm's global sourcing strategy and value expected from its global sourcing activities. This study examines the role of global sourcing strategy on financial and innovation performance of global sourcing activities. Using a fuzzy set qualitative comparative analysis on 235 firms engaging in global sourcing of business service activities, we identify configurations of global sourcing strategy-concerning (1) disaggregation, (2) dispersion of activities and (3) governance structure-that lead to high financial and innovation performance. The findings suggest that global sourcing strategy leading to high financial performance differs largely from global sourcing strategy leading to high innovation. While most studies selectively focus on one or two components of global sourcing strategy, our study highlights the need for firms to jointly consider the combined effect of degree of disaggregation, degree of dispersion of business service activities and governance structure as well as taking into account the expected outcome when crafting their global sourcing strategy.

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Section: Tablementioning

confidence: 99%

Designing Global Sourcing Strategy for Cost Savings and Innovation: A Configurational Approach

Lin

2020

Manag Int Rev

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“…However, literature on the impact of offshoring experience on firm performance is quite rare. The few examples include Lo and Hung (2015), who report a positive performance effect and Westner and Strahringer (2010), who find no effect.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Offshoring experience and performance: the role of realized drivers and risk management

Haleem

Farooq

Wæhrens

et al. 2018

SCM

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Purpose Many factors have been identified that may drive a firm’s decision to offshore production activities. The actual performance effects of offshoring, however, depend on the extent to which these drivers are realized. Furthermore, the question is how risk management helps mitigating the risk involved in offshoring ventures, thus leading to better performance outcomes. The purpose of this study is to investigate the extent to which realized offshoring drivers and risk management mediate the relationship between offshoring experience and firm performance. Design/methodology/approach Data from the Global Operations Networks project, a cross-sectional survey administered in Denmark and Sweden, are used to test two hypotheses on the mediating role of realized offshoring drivers and risk management in the relationship between offshoring experience and firm performance. AMOS version 23 is used to perform the analyses. Findings The results demonstrate that realized offshoring drivers fully mediate the relationship between offshoring experience and firm performance. However, risk management does not mediate the relationship between offshoring experience and firm performance. Originality/value This study develops new theory on, and managerial insight into, the mediating role of realized offshoring drivers and risk management in the relationship between offshoring experience and firm performance.

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“…Different data sets from the ORN database have been used in recent publications for various purposes of analysis (e.g. Massini et al , 2010; Hutzschenreuter et al , 2011; Lo and Hung, 2014; Peeters et al , 2014). As the question about a firm’s adoption of offshoring strategy was first introduced in the 2007-2008 survey, our study only utilized data collected after 2007.…”

Section: Methodsmentioning

confidence: 99%

“…Therefore, when we look into the decision errors made in offshoring implementation, it is necessary to consider the effects of these different approaches by which firms may initiate offshoring. The explicit distinction between the intended and emergent approaches is the presence or absence of a set of guidelines that originate from and are defined by top management (C-suite level) for guiding offshoring decisions at the business unit or function level (Chan and Chin, 2007; Massini et al , 2010; Lo and Hung, 2014). Another difference between these approaches involves the ways that corporate strategy deals with particular errors in offshoring decisions (i.e.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Mitigating hidden costs in service offshoring: a strategic management perspective

Zheng

Wang

2017

IMDS

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Purpose IT-enabled service offshoring has become a vital and widespread practice for firms seeking to realize various advantages. However, many firms suffer from “hidden costs” (the discrepancies between the expected and actual costs of offshoring), and these firms often find a disappointing outcome from their offshoring decisions. The purpose of this paper is to explore whether and how the adoption of an offshoring strategy can reduce such hidden costs and how this effect can be moderated by contextual factors, including the complexity of tasks and the accumulation of experience. Design/methodology/approach Based on survey data from the Offshoring Research Network, this study uses hierarchical regression analysis to empirically test the hypothesized relationships. Findings A corporate-wide strategy for guiding offshoring decisions may effectively reduce cost-estimation errors. This effect is amplified by increasing task complexity, but decreases with growing offshoring experience. Regardless of whether a strategy is initially in place, most firms learn to avoid cost-estimation errors only after several years. This finding suggests that firms have a limited ability to mitigate hidden costs in the short term. Practical implications The guidelines specified by an overarching strategy can better rationalize cost estimation and goal setting for individual offshoring projects, provide incentives for project participants to achieve preset aspirations, and enhance cost-efficiency in fulfilling offshoring activities and in coping with emerging contingencies. Firms tend to benefit more from establishing a formal strategy to reduce the hidden costs of more complex projects, especially if the firms involved have little offshoring experience. Originality/value This study empirically examines the hidden costs in offshoring from a strategic management perspective. This approach extends our understanding of cost estimates in offshoring, and it explores the influence of corporate strategy in the alignment of expected and achieved performances from IT-enabled service offshoring. The study also examines the boundaries of strategy’s ability to affect hidden costs, and it expands our knowledge of the relationship between strategy and experience.

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Structure offshoring and returns on offshoring

Cited by 5 publications

References 105 publications

Designing Global Sourcing Strategy for Cost Savings and Innovation: A Configurational Approach

Designing Global Sourcing Strategy for Cost Savings and Innovation: A Configurational Approach

Offshoring experience and performance: the role of realized drivers and risk management

Mitigating hidden costs in service offshoring: a strategic management perspective

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