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

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  • Lahiri, Somnath
  • Kedia, Ben L.

Abstract

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.

Suggested Citation

  • Lahiri, Somnath & Kedia, Ben L., 2009. "The effects of internal resources and partnership quality on firm performance: An examination of Indian BPO providers," Journal of International Management, Elsevier, vol. 15(2), pages 209-224, June.
  • Handle: RePEc:eee:intman:v:15:y:2009:i:2:p:209-224
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    References listed on IDEAS

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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.
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    6. 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.
    7. 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.
    8. 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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    Cited by:

    1. Gunasekaran, Angappa & Irani, Zahir & Choy, King-Lun & Filippi, Lionel & Papadopoulos, Thanos, 2015. "Performance measures and metrics in outsourcing decisions: A review for research and applications," International Journal of Production Economics, Elsevier, vol. 161(C), pages 153-166.
    2. 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.
    3. 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.
    4. Moema Pereira Nunes, 2016. "Motivations, Risks, Barriers, and Results Associated with the Adoption of Global Sourcing by Brazilian Companies: a Case-Based Study," Brazilian Business Review, Fucape Business School, vol. 13(2), pages 135-157, March.
    5. Stevens, Charles E. & Makarius, Erin E. & Mukherjee, Debmalya, 2015. "It Takes Two to Tango: Signaling Behavioral Intent in Service Multinationals' Foreign Entry Strategies," Journal of International Management, Elsevier, vol. 21(3), pages 235-248.
    6. Mariana Almeida & Raquel Meneses, 2013. "In The Shadow Of Offshoring: An Exploratory Study Of The Expectations Of Providers," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 1(1), pages 160-173, May.
    7. Søderberg, Anne-Marie & Krishna, S. & Bjørn, Pernille, 2013. "Global Software Development: Commitment, Trust and Cultural Sensitivity in Strategic Partnerships," Journal of International Management, Elsevier, vol. 19(4), pages 347-361.
    8. Somnath Lahiri, 2011. "India-focused publications in leading international business journals," Asia Pacific Journal of Management, Springer, vol. 28(2), pages 427-447, June.
    9. Upadhyayula, Rajesh S. & Dhandapani, Karthik & Karna, Amit, 2017. "The Role of Cluster Presence and Quality Certification in Internationalization and Performance of Offshore Service Providers," Journal of International Management, Elsevier, vol. 23(1), pages 72-86.
    10. repec:eee:proeco:v:193:y:2017:i:c:p:281-293 is not listed on IDEAS
    11. repec:ntu:ntugeo:vol1-iss1s-13-160 is not listed on IDEAS
    12. 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.
    13. Kothari, Tanvi & Lahiri, Somnath, 2012. "Yesterday, today and tomorrow: An overview of research publications in the Journal of International Management," Journal of International Management, Elsevier, vol. 18(1), pages 102-110.
    14. Raman, Revti & Chadee, Doren & Roxas, Banjo & Michailova, Snejina, 2013. "Effects of Partnership Quality, Talent Management, and Global Mindset on Performance of Offshore IT Service Providers in India," Journal of International Management, Elsevier, vol. 19(4), pages 333-346.
    15. repec:eee:joreco:v:20:y:2013:i:5:p:479-487 is not listed on IDEAS
    16. repec:kap:asiapa:v:34:y:2017:i:4:d:10.1007_s10490-016-9485-9 is not listed on IDEAS
    17. repec:kap:jinten:v:15:y:2017:i:3:d:10.1007_s10843-017-0208-1 is not listed on IDEAS
    18. Carole Donada & François Lenglet & Caroline Mothe & Jean-Jacques Nillès, 2015. "Un indice de mesure du collaboratif client-fournisseur," Post-Print hal-01301383, HAL.
    19. Upadhyayula, Rajesh & Karthik, D. & Karna, Amit, 2015. "Role of Clusters and Certification in the Internationalization of Offshoring Service Providers from Emerging Markets: A Study of Indian IT firms," IIMA Working Papers WP2015-03-35, Indian Institute of Management Ahmedabad, Research and Publication Department.
    20. 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.

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