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Role of Corporate-Wide Offshoring Strategy on Offshoring Drivers, Risks and Performance

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  • Silvia Massini
  • Nidthida Perm-Ajchariyawong
  • Arie Lewin

Abstract

In this study we investigate the role of corporate offshoring strategy on offshoring decisions and performance. Based on 876 offshoring projects from 226 companies obtained by means of surveys conducted in the USA and Europe, we examine the effect of offshoring strategy on factors influencing firms' views of offshoring, and the effect of offshoring strategy on offshoring performance. Separate analyses were conducted for US and European companies in order to explore any regional heterogeneity in offshoring. A comparative analysis between companies with and without an offshoring strategy reveals that when making offshoring decisions, the former consider a broader range of factors (drivers, risks and locations) as important compared to companies without an offshoring strategy, suggesting association between offshoring strategy and managerial attention. The results also indicate that the adoption of a corporate offshoring strategy has a significant positive effect on cost savings achieved from offshore implementations, and that innovation activities have a significant negative impact on cost savings, but only for European companies.

Suggested Citation

  • Silvia Massini & Nidthida Perm-Ajchariyawong & Arie Lewin, 2010. "Role of Corporate-Wide Offshoring Strategy on Offshoring Drivers, Risks and Performance," Industry and Innovation, Taylor & Francis Journals, vol. 17(4), pages 337-371.
  • Handle: RePEc:taf:indinn:v:17:y:2010:i:4:p:337-371 DOI: 10.1080/13662716.2010.496242
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bengt Söderlund & Patrik Tingvall, 2014. "Dynamic effects of institutions on firm-level exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(2), pages 277-308, May.
    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. Karpaty, Patrik & Gustavsson Tingvall, Patrik, 2011. "Offshoring of Services and Corruption: Do Firms Escape Corrupt Countries?," Working Papers 2011:2, Örebro University, School of Business, revised 28 May 2012.
    4. 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.
    5. Heyman Fredrik & Tingvall Patrik Gustavsson, 2015. "The Dynamics of Offshoring and Institutions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, pages 1975-2016.
    6. repec:krk:eberjl:v:5:y:2017:i:3:p:95-117 is not listed on IDEAS
    7. 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.
    8. repec:eee:respol:v:46:y:2017:i:10:p:1810-1823 is not listed on IDEAS
    9. Schubert, Torben & Baier, Elisabeth & Rammer, Christian, 2016. "Technological capabilities, technological dynamism and innovation offshoring," ZEW Discussion Papers 16-044, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. Patrik Karpaty & Patrik Tingvall, 2015. "Service Offshoring and Corruption: Do Firms Escape Corrupt Countries?," Journal of Industry, Competition and Trade, Springer, vol. 15(4), pages 363-381, December.
    11. Larsen, Marcus M., 2016. "Failing to estimate the costs of offshoring: A study on process performance," International Business Review, Elsevier, vol. 25(1), pages 307-318.
    12. Lewin, Arie Y. & Volberda, Henk W., 2011. "Co-evolution of global sourcing: The need to understand the underlying mechanisms of firm-decisions to offshore," International Business Review, Elsevier, vol. 20(3), pages 241-251, June.

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