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Living with offshoring: The impact of offshoring on the evolution of organizational configurations

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  • Lampel, Joseph
  • Bhalla, Ajay

Abstract

Offshoring allows firms to pursue greater flexibility at lower costs, but it also presents major structural and managerial challenges. Adopting the activity configuration perspective, we argue that offshoring creates tensions between benefits to the competitive position of the firm, and potential disruption to the cohesion and consistency of the organization's internal activity configuration. We further argue that both benefits and risks increase as organizations move from offshoring low to offshoring high value-creating activities, and as they seek tight as opposed to loose couplings among offshored and onshored value-creating activities. Our research site is the UK operations of Tiscali, a European telecommunications firm. We examine how Tiscali uses offshoring as it grows and expands its service offerings from single, to double, and then triple play, and also analyze how Tiscali addresses the ensuing disruption to its activity configuration. We conclude with implications of our study to future research on offshoring.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:worbus:v:46:y:2011:i:3:p:346-358
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    References listed on IDEAS

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    Cited by:

    1. 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.
    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. Bagchi, Kallol & Kirs, Peeter & Udo, Godwin & Cerveny, Robert, 2015. "Characteristics and determinants of insourced and offshored projects: A comparative analysis," Journal of World Business, Elsevier, vol. 50(1), pages 108-121.
    4. Zimmermann, Angelika & Ravishankar, M.N., 2016. "A systems perspective on offshoring strategy and motivational drivers amongst onshore and offshore employees," Journal of World Business, Elsevier, vol. 51(4), pages 548-567.
    5. 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.
    6. 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.
    7. Gerbl, Martina & McIvor, Ronan & Loane, Sharon & Humphreys, Paul, 2015. "A multi-theory approach to understanding the business process outsourcing decision," Journal of World Business, Elsevier, vol. 50(3), pages 505-518.
    8. Baier , Elisabeth & Rammer , Christian & Schubert , Torben, 2013. "The Impact of Innovation Off-shoring on Organizational Adaptability," Papers in Innovation Studies 2013/44, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    9. Verwaal, Ernst, 2017. "Global outsourcing, explorative innovation and firm financial performance: A knowledge-exchange based perspective," Journal of World Business, Elsevier, vol. 52(1), pages 17-27.
    10. 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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