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Understanding offshoring: A research framework based on disintegration, location and externalization advantages

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  • Kedia, Ben L.
  • Mukherjee, Debmalya
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    Abstract

    We present an analytical framework explaining offshoring in this paper. We address the question: why do firms offshore their business functions? Given the growing prevalence of offshoring as a dominant business practice in the world of global business, this question merits further research attention. We propose that firms embark on offshoring when they perceive three sets of interrelated advantages: disintegration advantages (D), location-specific resourcing advantages (L) and externalization advantages (E). Theories from multiple disciplines form the foundation of Disintegration-Location-Externalization (DLE) framework. Implications for managers, government policy makers and recommendations for future research are explored.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 44 (2009)
    Issue (Month): 3 (July)
    Pages: 250-261

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    Handle: RePEc:eee:worbus:v:44:y:2009:i:3:p:250-261

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    Related research

    Keywords: Offshoring Offshore outsourcing Externalization Disintegration advantages;

    References

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    Citations

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    Cited by:
    1. Michele Pinelli, 2013. "The regional soul of sustainability," Working Papers 15, Department of Management, Università Ca' Foscari Venezia.
    2. 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.
    3. Lampel, Joseph & Bhalla, Ajay, 2011. "Living with offshoring: The impact of offshoring on the evolution of organizational configurations," Journal of World Business, Elsevier, vol. 46(3), pages 346-358, July.
    4. Baier, Elisabeth & Rammer, Christian & Schuber, Torben, 2013. "The impact on innovation off-shoring on organizational adaptability," ZEW Discussion Papers 13-109, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Angels Pelegrín & Catalina Bolancé, 2011. "Offshoring and company characteristics: some evidence from the analysis of Spanish firm data," Working Papers 2011/16, Institut d'Economia de Barcelona (IEB).
    6. Pereira, Vijay & Anderson, Valerie, 2012. "A longitudinal examination of HRM in a human resources offshoring (HRO) organization operating from India," Journal of World Business, Elsevier, vol. 47(2), pages 223-231.
    7. 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.
    8. Lahiri, Somnath & Kedia, Ben L., 2011. "Co-evolution of institutional and organizational factors in explaining offshore outsourcing," International Business Review, Elsevier, vol. 20(3), pages 252-263, June.
    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. Gaur, Ajai S. & Kumar, Vikas & Singh, Deeksha, 2014. "Institutions, resources, and internationalization of emerging economy firms," Journal of World Business, Elsevier, vol. 49(1), pages 12-20.
    11. 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.
    12. Mukherjee, Debmalya & Gaur, Ajai S. & Datta, Avimanyu, 2013. "Creating value through offshore outsourcing: An integrative framework," Journal of International Management, Elsevier, vol. 19(4), pages 377-389.
    13. 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.
    14. Angels Pelegrín & José García-Quevedo, 2012. "Which firms are involved in foreign vertical integration?," Working Papers 2012/38, Institut d'Economia de Barcelona (IEB).

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