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The effects of internal resources and partnership quality on firm performance: An examination of Indian BPO providers

  • Lahiri, Somnath
  • Kedia, Ben L.
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    Firms from developed nations are increasingly resorting to business process outsourcing (BPO) as part of their global sourcing strategy. Although BPO is a growing practice, there has been limited empirical attention in understanding the phenomenon, particularly from the perspective of provider firms that execute important business processes for their overseas clients. In this paper we focus on the resources and capabilities that are utilized by the providers in fulfilling their clients' sourcing needs. Using resource-based view and social exchange as theoretical foundations, we argue that providers' human capital, organizational capital, management capability, and partnership quality are crucial assets that are deemed valuable by the clients and are utilized by the providers in attaining higher performance. Using a sample of Indian BPO providers, we empirically test three models (direct, mediating and moderating) to understand how these assets impact firm-level performance. Results show that resources and capabilities relate to performance in varying measures and partnership quality has partial-mediating and moderating effects on these relationships. We conclude by discussing the theoretical and practical implications of the study and highlighting avenues of future inquiry.

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

    Volume (Year): 15 (2009)
    Issue (Month): 2 (June)
    Pages: 209-224

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    Handle: RePEc:eee:intman:v:15:y:2009:i:2:p:209-224
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    1. Pawan S. Budhwar & Harsh K. Luthar & Jyotsna Bhatnagar, 2006. "The Dynamics of HRM Systems in Indian BPO Firms," Journal of Labor Research, Transaction Publishers, vol. 27(3), pages 339-360, June.
    2. Graf, Michael & Mudambi, Susan M., 2005. "The outsourcing of IT-enabled business processes: A conceptual model of the location decision," Journal of International Management, Elsevier, vol. 11(2), pages 253-268, June.
    3. Anju Mehta & Achilles Armenakis & Nikhil Mehta & Feruzan Irani, 2006. "Challenges and Opportunities of Business Process Outsourcing in India," Journal of Labor Research, Transaction Publishers, vol. 27(3), pages 324-338, June.
    4. 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.
    5. Mariko Sakakibara & Michael E. Porter, 2001. "Competing At Home To Win Abroad: Evidence From Japanese Industry," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 310-322, May.
    6. Arie Lewin & Carine Peeters, 2006. "Offshoring administrative and technical work: business hype or the onset of fundamental strategic and organizational transformation ?," ULB Institutional Repository 2013/9039, ULB -- Universite Libre de Bruxelles.
    7. Mike W Peng, 2004. "Identifying the big question in international business research," Journal of International Business Studies, Palgrave Macmillan, vol. 35(2), pages 99-108, March.
    8. Wagner, Stephan M., 2006. "A firm's responses to deficient suppliers and competitive advantage," Journal of Business Research, Elsevier, vol. 59(6), pages 686-695, June.
    9. Heimeriks, K.H. & Duysters, G.M., 2003. "Alliance capability as mediator between experience and alliance performance: an empirical investigation into the alliance capability development process," Working Papers 03.18, Eindhoven Center for Innovation Studies.
    10. Mudambi, Ram & Mudambi, Susan McDowell, 1995. "From transaction cost economics to relationship marketing: a model of buyer-supplier relations," International Business Review, Elsevier, vol. 4(4), pages 419-433.
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