IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v69y2016i9p3439-3446.html
   My bibliography  Save this article

Behavioral factors in offshoring decisions: A qualitative analysis

Author

Listed:
  • Musteen, Martina

Abstract

Using the behavioral lens as a theoretical complement of rational models, I examine factors that influence decisions related to offshoring of business activities. A qualitative analysis of 22 cases of companies from six diverse industries provides evidence that besides the commonly acknowledged offshoring decision related factors, such as labor cost, risks, access to markets, and quality of talent, there are other important influences. These reflect decision makers' personal experiences, attitudes and emotions and cognitive limitations. I discuss findings in light of current theory and practice.

Suggested Citation

  • Musteen, Martina, 2016. "Behavioral factors in offshoring decisions: A qualitative analysis," Journal of Business Research, Elsevier, vol. 69(9), pages 3439-3446.
  • Handle: RePEc:eee:jbrese:v:69:y:2016:i:9:p:3439-3446
    DOI: 10.1016/j.jbusres.2016.01.042
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296316000588
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jbusres.2016.01.042?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Arie Y Lewin & Silvia Massini & Carine Peeters, 2009. "Why are companies offshoring innovation? The emerging global race for talent," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(8), pages 1406-1406, October.
    2. Christoph Grimpe & Ulrich Kaiser, 2010. "Balancing Internal and External Knowledge Acquisition: The Gains and Pains from R&D Outsourcing," Journal of Management Studies, Wiley Blackwell, vol. 47(8), pages 1483-1509, December.
    3. Kedia, Ben L. & Mukherjee, Debmalya, 2009. "Understanding offshoring: A research framework based on disintegration, location and externalization advantages," Journal of World Business, Elsevier, vol. 44(3), pages 250-261, July.
    4. Arie Lewin & Silvia Massini & Carine Peeters, 2008. "Why are companies offshoring innovation ?the emerging global race for talent," Working Papers CEB 08-009, ULB -- Universite Libre de Bruxelles.
    5. Vivek, Shiri D. & Richey Jr., R. Glenn & Dalela, Vivek, 2009. "A longitudinal examination of partnership governance in offshoring: A moving target," Journal of World Business, Elsevier, vol. 44(1), pages 16-30, January.
    6. Jennifer M George & Gareth R Jones & Jorge A Gonzalez, 1998. "The Role of Affect in Cross-Cultural Negotiations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(4), pages 749-772, December.
    7. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    8. Martina Musteen & Mujtaba Ahsan, 2013. "Beyond Cost: The Role of Intellectual Capital in Offshoring and Innovation in Young Firms," Entrepreneurship Theory and Practice, , vol. 37(2), pages 421-434, March.
    9. Martinez-Noya, Andrea & Garcia-Canal, Esteban & Guillen, Mauro F., 2012. "International R&D service outsourcing by technology-intensive firms: Whether and where?," Journal of International Management, Elsevier, vol. 18(1), pages 18-37.
    10. Andreas Schotter & Paul W Beamish, 2013. "The hassle factor: An explanation for managerial location shunning," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(5), pages 521-544, June.
    11. Luo, Yadong & Wang, Stephanie Lu & Jayaraman, Vaidyanathan & Zheng, Qinqin, 2013. "Governing business process offshoring: Properties, processes, and preferred modes," Journal of World Business, Elsevier, vol. 48(3), pages 407-419.
    12. Ram Mudambi & Markus Venzin, 2010. "The Strategic Nexus of Offshoring and Outsourcing Decisions," Journal of Management Studies, Wiley Blackwell, vol. 47(8), pages 1510-1533, December.
    13. Dante Di Gregorio & Martina Musteen & Douglas E Thomas, 2009. "Offshore outsourcing as a source of international competitiveness for SMEs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(6), pages 969-988, August.
    14. Jonathan P. Doh, 2005. "Offshore Outsourcing: Implications for International Business and Strategic Management Theory and Practice," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 695-704, May.
    15. Peter J Buckley & Timothy M Devinney & Jordan J Louviere, 2007. "Do managers behave the way theory suggests? A choice-theoretic examination of foreign direct investment location decision-making," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(7), pages 1069-1094, December.
    16. María Jesús Nieto & Alicia Rodríguez, 2011. "Offshoring of R&D: Looking abroad to improve innovation performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(3), pages 345-361, April.
    17. Jean-François Coget & Christophe Haag & Donald E. Gibson, 2011. "Anger and fear in decision-making : The case of film directors on set," Post-Print hal-02312644, HAL.
    18. Coget, Jean-Francois & Haag, Christophe & Gibson, Donald E., 2011. "Anger and fear in decision-making: The case of film directors on set," European Management Journal, Elsevier, vol. 29(6), pages 476-490.
    19. Aharoni, Yair & Tihanyi, Laszlo & Connelly, Brian L., 2011. "Managerial decision-making in international business: A forty-five-year retrospective," Journal of World Business, Elsevier, vol. 46(2), pages 135-142, April.
    20. Arie Lewin & Silvia Massini & Carine Peeters, 2009. "Why are companies offshoring innovation the emerging global race for talent (Journal of International Business Studies (2009) 40 (901-925) DOI:10.1057/jibs.2008.92)," ULB Institutional Repository 2013/205625, ULB -- Universite Libre de Bruxelles.
    21. Sucheta Nadkarni & V. K. Narayanan, 2007. "The Evolution of Collective Strategy Frames in High- and Low-Velocity Industries," Organization Science, INFORMS, vol. 18(4), pages 688-710, August.
    22. Christoph Grimpe & Ulrich Kaiser, 2010. "Balancing Internal and External Knowledge Acquisition: The Gains and Pains from R&D Outsourcing," Journal of Management Studies, Wiley Blackwell, vol. 47(8), pages 1483-1509, December.
    23. Peeter W J Verlegh, 2007. "Home country bias in product evaluation: the complementary roles of economic and socio-psychological motives," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(3), pages 361-373, May.
    24. Julian Birkinshaw & Mary Yoko Brannen & Rosalie L Tung, 2011. "From a distance and generalizable to up close and grounded: Reclaiming a place for qualitative methods in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(5), pages 573-581, June.
    25. T.K. Das & Bing‐Sheng Teng, 1999. "Cognitive Biases and Strategic Decision Processes: An Integrative Perspective," Journal of Management Studies, Wiley Blackwell, vol. 36(6), pages 757-778, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Blondiau, Yuliya & Reuter, Emmanuelle, 2019. "Why is the grass greener on the other side? Decision modes and location choice by wind energy investors," Journal of Business Research, Elsevier, vol. 102(C), pages 44-55.
    2. Munjal, Surender & Requejo, Ignacio & Kundu, Sumit K., 2019. "Offshore outsourcing and firm performance: Moderating effects of size, growth and slack resources," Journal of Business Research, Elsevier, vol. 103(C), pages 484-494.
    3. Pongelli, Claudia & Calabrò, Andrea & Basco, Rodrigo, 2019. "Family firms' international make-or-buy decisions: Captive offshoring, offshore outsourcing, and the role of home region focus," Journal of Business Research, Elsevier, vol. 103(C), pages 596-606.
    4. Abdul Wahab, Nor Shaipah & Ntim, Collins G. & Mohd Adnan, Mohd Muttaqin & Tye, Wei Ling, 2018. "Top management team heterogeneity, governance changes and book-tax differences," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 32(C), pages 30-46.
    5. Oshri, Ilan & Sidhu, Jatinder S. & Kotlarsky, Julia, 2019. "East, west, would home really be best? On dissatisfaction with offshore-outsourcing and firms' inclination to backsource," Journal of Business Research, Elsevier, vol. 103(C), pages 644-653.
    6. Gopalakrishnan, Shanthi & Zhang, Haisu, 2019. "Client dependence: A boon or bane for vendor innovation? A competitive mediation framework in IT outsourcing," Journal of Business Research, Elsevier, vol. 103(C), pages 407-416.
    7. Kummitha, Rama Krishna Reddy & Crutzen, Nathalie, 2019. "Smart cities and the citizen-driven internet of things: A qualitative inquiry into an emerging smart city," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 44-53.
    8. Howe-Walsh, Liza & Turnbull, Sarah & Budhwar, Pawan, 2019. "An investigation into on-sourcing of advertising creativity in an emerging economy: The case of the United Arab Emirates," Journal of Business Research, Elsevier, vol. 103(C), pages 356-364.
    9. Mostafiz, Md Imtiaz & Musteen, Martina & Saiyed, Abrarali & Ahsan, Mujtaba, 2022. "COVID-19 and the global value chain: Immediate dynamics and long-term restructuring in the garment industry," Journal of Business Research, Elsevier, vol. 139(C), pages 1588-1603.
    10. Pla-Barber, José & Linares, Esmeralda & Ghauri, Pervez N., 2019. "The choice of offshoring operation mode: A behavioural perspective," Journal of Business Research, Elsevier, vol. 103(C), pages 570-580.
    11. Merendino, Alessandro & Sarens, Gerrit, 2020. "Crisis? What crisis? Exploring the cognitive constraints on boards of directors in times of uncertainty," Journal of Business Research, Elsevier, vol. 118(C), pages 415-430.
    12. Chakravarty, Dwarka & Goerzen, Anthony & Musteen, Martina & Ahsan, Mujtaba, 2021. "Global cities: A multi-disciplinary review and research agenda," Journal of World Business, Elsevier, vol. 56(3).
    13. Fuster, Begoña & Lillo-Bañuls, Adelaida & Martínez-Mora, Carmen, 2020. "Reshoring of services and employment," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 233-246.
    14. Antolín-López, Raquel & Jerez-Gómez, Pilar & Rengel-Rojas, Susana B., 2022. "Uncovering local communities’ motivational factors to partner with a nonprofit for social impact: A mixed-methods approach," Journal of Business Research, Elsevier, vol. 139(C), pages 564-583.
    15. Merendino, Alessandro & Dibb, Sally & Meadows, Maureen & Quinn, Lee & Wilson, David & Simkin, Lyndon & Canhoto, Ana, 2018. "Big data, big decisions: The impact of big data on board level decision-making," Journal of Business Research, Elsevier, vol. 93(C), pages 67-78.
    16. Martina Musteen & Mujtaba Ahsan & Taekyung Park, 2017. "SMEs, Intellectual Capital, and Offshoring of Service Activities: An Empirical Investigation," Management International Review, Springer, vol. 57(4), pages 603-630, August.
    17. Gao, Yongling & Driouchi, Tarik, 2018. "Accounting for ambiguity and trust in partial outsourcing: A behavioral real options perspective," Journal of Business Research, Elsevier, vol. 92(C), pages 93-104.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Niccolò Pisani & Joan Enric Ricart, 2016. "Offshoring of Services: A Review of the Literature and Organizing Framework," Management International Review, Springer, vol. 56(3), pages 385-424, June.
    2. Martinez-Noya, Andrea & Narula, Rajneesh, 2018. "What more can we learn from R&D alliances? : A review and research agenda," MERIT Working Papers 2018-022, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Martina Musteen & Mujtaba Ahsan & Taekyung Park, 2017. "SMEs, Intellectual Capital, and Offshoring of Service Activities: An Empirical Investigation," Management International Review, Springer, vol. 57(4), pages 603-630, August.
    4. Nidthida Lin, 2020. "Designing Global Sourcing Strategy for Cost Savings and Innovation: A Configurational Approach," Management International Review, Springer, vol. 60(5), pages 723-753, October.
    5. Schmeisser, Bjoern, 2013. "A Systematic Review of Literature on Offshoring of Value Chain Activities," Journal of International Management, Elsevier, vol. 19(4), pages 390-406.
    6. Yi-Ju Lo & Tung Hung, 2015. "Structure offshoring and returns on offshoring," Asia Pacific Journal of Management, Springer, vol. 32(2), pages 443-479, June.
    7. Pooja Thakur-Wernz & Olga Bruyaka, 2017. "Co-evolutionary Perspective on Sourcing Portfolios: Examining Sourcing Choices for Clinical Trials of Bio-pharmaceutical Firms," Management International Review, Springer, vol. 57(6), pages 909-946, December.
    8. Thakur-Wernz, Pooja & Bruyaka, Olga & Contractor, Farok, 2020. "Antecedents and relative performance of sourcing choices for new product development projects," Technovation, Elsevier, vol. 90.
    9. Clampit, Jack & Kedia, Ben & Fabian, Frances & Gaffney, Nolan, 2015. "Offshoring satisfaction: The role of partnership credibility and cultural complementarity," Journal of World Business, Elsevier, vol. 50(1), pages 79-93.
    10. Hung, Tung Min & Contractor, Farok & Lo, Yi-Ju, 2022. "Manage the value and liability of offshoring innovation," International Business Review, Elsevier, vol. 31(2).
    11. Jensen, Peter D. Ørberg, 2012. "A passage to India: A dual case study of activities, processes and resources in offshore outsourcing of advanced services," Journal of World Business, Elsevier, vol. 47(2), pages 311-326.
    12. Torben Schubert & Elisabeth Baier & Christian Rammer, 2018. "Firm capabilities, technological dynamism and the internationalisation of innovation: A behavioural approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(1), pages 70-95, January.
    13. Jeremiah, Rupin, 2017. "DO FIRMS INNOVATE ABROAD? - The Case of Swedish R&D in India," SSE Working Paper Series in Business Administration 2017:4, Stockholm School of Economics, revised 07 Dec 2017.
    14. Caniato, Federico & Elia, Stefano & Luzzini, Davide & Piscitello, Lucia & Ronchi, Stefano, 2015. "Location drivers, governance model and performance in service offshoring," International Journal of Production Economics, Elsevier, vol. 163(C), pages 189-199.
    15. Mashiho Mihalache & Oli R. Mihalache, 2020. "What is Offshoring Management Capability and How Do Organizations Develop It? A Study of Dutch IT Service Providers," Management International Review, Springer, vol. 60(1), pages 37-67, February.
    16. Amendolagine, Vito & Capolupo, Rosa & Ferri, Giovanni, 2014. "Innovativeness, offshoring and black economy decisions. Evidence from Italian manufacturing firms," International Business Review, Elsevier, vol. 23(6), pages 1153-1166.
    17. Lorena D’Agostino, 2015. "The neglected effects of R&D captive offshoring in emerging countries on the creation of knowledge at home," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 61-91, March.
    18. Steinberg, Philip J. & Procher, Vivien D. & Urbig, Diemo, 2017. "Too much or too little of R&D offshoring: The impact of captive offshoring and contract offshoring on innovation performance," Research Policy, Elsevier, vol. 46(10), pages 1810-1823.
    19. Rodgers, Peter & Khan, Zaheer & Tarba, Shlomo & Nurgabdeshov, Assylbek & Ahammad, Mohammad F., 2019. "Exploring the determinants of location choice decisions of offshored R&D projects," Journal of Business Research, Elsevier, vol. 103(C), pages 472-483.
    20. Baier, Elisabeth & Rammer, Christian & Schubert, Torben, 2015. "The Impact of Captive Innovation Offshoring on the Effectiveness of Organizational Adaptation," Journal of International Management, Elsevier, vol. 21(2), pages 150-165.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:69:y:2016:i:9:p:3439-3446. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.