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A learning perspective on the offshoring of advanced services

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  • Jensen, Peter D. Ørberg
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    Abstract

    Based on longitudinal case studies of offshoring of advanced IT and engineering services from Danish firms to Indian firms, this paper explores organizational learning that occurs over time in both home and host firms and uses learning as a measure of the firm impact of advanced services offshoring. The findings are consistent with the theoretical view that advanced services offshoring must be understood as an antecedent for strategic business development and organizational change in both home and host firms. The study shows that when offshoring partnerships mature and firms gain experience, learning in both home and host firms evolves over time and differs in many cases from their initial objectives and expectations. In some of the Danish firms engaging in offshoring even ignites a process of strategic transformation. Both Danish and Indian firms use the input from their offshoring partnership to upgrade their organizations and business processes.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 15 (2009)
    Issue (Month): 2 (June)
    Pages: 181-193

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    Handle: RePEc:eee:intman:v:15:y:2009:i:2:p:181-193

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    Related research

    Keywords: Services offshoring Global integration Organizational learning Knowledge transfer Business strategy;

    References

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    1. Dieter Ernst, 2002. "Global production networks and the changing geography of innovation systems. Implications for developing countries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(6), pages 497-523.
    2. Robert Jensen & Gabriel Szulanski, 2004. "Stickiness and the adaptation of organizational practices in cross-border knowledge transfers," Journal of International Business Studies, Palgrave Macmillan, vol. 35(6), pages 508-523, November.
    3. Petersen, Bent & Pedersen, Torben, 2002. "Coping with liability of foreignness: Different learning engagements of entrant firms," Journal of International Management, Elsevier, vol. 8(3), pages 339-350.
    4. Dossani, Rafiq & Kenney, Martin, 2003. "Went for Cost, Stayed for Quality?: Moving the Back Office to India," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt0b7764tt, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
    5. Peter Maskell & Torben Pedersen & Bent Petersen & Jens Dick-Nielsen, 2005. "Learning Paths to Offshore Outsourcing - From Cost Reduction to Knowledge Seeking," DRUID Working Papers 05-17, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    6. Patibandla, Murali & Petersen, Bent, 2002. "Role of Transnational Corporations in the Evolution of a High-Tech Industry: The Case of India's Software Industry," World Development, Elsevier, vol. 30(9), pages 1561-1577, September.
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    12. Peter D. Ørberg Jensen & Jacob Funk Kirkegaard & Nicolai Søndergaard Laugesen, 2006. "Offshoring in Europe—Evidence of a Two-Way Street from Denmark," Working Paper Series WP06-3, Peterson Institute for International Economics.
    13. Kedia, Ben L. & Lahiri, Somnath, 2007. "International outsourcing of services: A partnership model," Journal of International Management, Elsevier, vol. 13(1), pages 22-37, March.
    14. Richard W Moxon, 1975. "The Motivation for Investment in Offshore Plants: The Case of the U.S. Electronics Industry," Journal of International Business Studies, Palgrave Macmillan, vol. 6(1), pages 51-66, March.
    15. David L. Levy, 2005. "Offshoring in the New Global Political Economy," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 685-693, 05.
    16. Dossani, Rafiq & Kenney, Martin, 2007. "The Next Wave of Globalization: Relocating Service Provision to India," World Development, Elsevier, vol. 35(5), pages 772-791, May.
    17. Bunyaratavej, Kraiwinee & Hahn, Eugene D. & Doh, Jonathan P., 2007. "International offshoring of services: A parity study," Journal of International Management, Elsevier, vol. 13(1), pages 7-21, March.
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    Cited by:
    1. Julien Gooris & Carine Peeters, 2012. "Home-Host Country Distance and Governance Choices in Service Offshoring," Working Papers ECARES ECARES 2012-007, ULB -- Universite Libre de Bruxelles.

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