Special Issue Call for Papers in Journal of Business Research
Outsourcing and Offshoring Decision Making and its Implications for the firm
Deadline 30th January 2017
Fierce competition and globalisation have driven businesses to encompass greater economic cross-border transfers and exchange of goods and services, knowledge and people, and various intermediate activities forming global value chains (GVCs). Over the last few decades scholars (see Hätönen and Eriksson, 2009; Oshri, Kotlarsky, Willcocks, 2015; Lahiri, 2016 etc.) have examined, the complex phenomenon of outsourcing and offshoring at country, industry, firm and managerial levels, revealing the nexus between locations, motivation and business strategies of disintegration, dispersion and dexterity. More recently, advances in technology and new economic realities have added to the multi-faceted and complex nature of the subject, highlighting further avenues for research.
Emerging research increasingly suggests that firms are outsourcing and offshoring outsourcing knowledge intensive activities to enhance their competitive advantages by exploiting local talent and expertise in host economies. Over time, the theoretical scrutiny has expanded from the traditional transaction cost economics and resource-based analysis to the knowledge-based theories of the firm. To add to this growing scope of theoretical inquiry, scholars (e.g. Peng, Sun, Pinkham, & Chen, 2009) have also proposed to explore the role of institutions as it strongly influences the endowment of resources, knowledge, skills and talent. Moreover, institutional development and government policies affect several other factors, such as the quality of infrastructure and industrial clusters that are critical to the outsourcing firm. More visible examples of these effects can be found in the context of emerging economies, such as India, Philippines, and China, and also in advanced economies, such as Ireland, Poland, and Canada. These country contexts provide unique opportunities to widen the scope of theoretical inquiry while providing good backgrounds for testing propositions relating to outsourcing and offshoring. Conceptual and empirical contributions that explore the relationship between location and the firm’s decision for outsourcing and offshoring decisions from different theoretical lenses are hence invited for this special issue. This will help in extending the academic understanding of outsourcing and offshoring decisions of the firm and will benefit in theoretical development.
Previous research has attempted to reconceptualise the role of the firm and managers when it comes to the process of outsourcing and offshoring (Contractor, Kumar, Kundu & Pedersen, 2010). Increasingly, the scope of outsourcing and offshoring has evolved from transactional work to that of more core activities which has led to firms having porous boundaries (Dess, Rasheed, McLaughlin & Priem, 2005). Buckley (2009, 2011, and 2016) has proposed the ‘Global Factory’ model which portrays the architecture of the firm seeking to achieve a balance between: first, internalisation of core activities and externalisation of non-core activities; and second, contrast between global and local strategy, which makes the firm more flexible, agile and resilient to external shocks. The outsourcing and offshoring literature thus suggests several benefits for the firm but it also identifies many challenges, such as dealing with the geographic, physic and administrative distance between home and host countries, and differences in the time zones (Manning, Larsen and Bharati, 2015). These challenges further highlights the role of managers, i.e. how do managers deal with these differences when it comes to managing the global-local contrast, controlling knowledge, and coordinating the network of contractors and allies? Empirical research in this area is needed to improve our understanding of these complex decisions. Qualitative and quantitative research should hence investigate the decision making processes and its influence on the outsourcing firm.
The discussion above suggests that the outsourcing and offshoring phenomenon is at an interesting stage in its life-cycle and academic theories and literature need to keep pace with several developments in this global industry. With this background, we solicit conceptual, empirical and methodological contributions from a variety of disciplines, including international business and strategy, organization studies, management, economics, marketing and others that advance our current understanding of the theory and practice of outsourcing and offshoring that has changed the face of modern business. Contributions may cover wider range of topics and questions not just limited to the discussion above and the list below. We welcome studies using mixed methods, qualitative data and case studies approach that can shed rich light on this topic.
We further illustrate five important decision making questions (Hätönen and Eriksson, 2009; Pereira and Malik, 2015) that can help in developing more fine grained analysis to advance outsourcing and offshoring, at deeper, sophisticated and critical levels (list below not exhaustive, but only indicative). These are:
· Increasing competitive pressure?
· To become leaner by decreasing costs?
· By better asset utilization while maintaining high customer service level?
· Through rapid technological developments?
· Strategizing by resorting to long-term financial implications?
· By being more strategic when it comes to the new product development cycles and time-to-market?
· Lack of expertise?
· Limited production facilities or insufficient capacity?
2. What to outsource (what to keep in-house and what to outsource)? (Examples could include: What ‘core’ segments of the value chain are to be retained in-house? What could be optimally dispersed geographically, to allies and contractors? What is the influence in terms of advances in technology on the firm’s decision to outsource? What are the factors that influence a firm’s decision to re-shore and back-source? What are the various influences of outsourcing decisions on the local host economies and the competitiveness of its local firms?)
3. Where to outsource (locational choices)? (Examples could include: In terms of ‘where’, should these decisions be tactical, strategic and transformational? In terms of ‘where’ (location), what are the factors that influence the offshore-location decision when ownership of the activity is transferred to the foreign vendor? Do internationalization strategies of the firm affect the choice of outsourcing and off sourcing locations? When it comes to locational choices made by the vendee for offshore vendors, are they evaluated on: technical capability, experience, or offshore capability? In terms of ‘where’, how do the new economic realities affects decision making?)
4. How is outsourcing undertaken? (Examples could include: How does outsourcing/offshoring affect the firm’s behaviour, structure and organisation within the integrating global economy?; How does and can the relation between location, motivation and the firm’s business strategies be best captured methodologically to produce a holistic picture of outsourcing and offshoring decisions? How do new locations and the changing landscape therein transform the firm’s strategies of outsourcing and its competitive advantages? How does the formation of GVCs get influenced by the host government policies and the local institutional attributes?)
And lastly a fifth area, that of…
5. When to outsource or keep in-house? (Examples could include: How do companies decide when to make, and when to outsource? When should a firm continue to produce in-house? When does it start buying from a new supplier? And when does it continue to maintain an on-going relationship with a particular supplier? When it comes to choices, are factors influencing the outsourcing decisions firm or context specific in terms of what and where it is being outsourced? When it comes to timing are firms primary strategic objective to minimize risk and maximize value? In terms of ‘when’ do firms take into consideration increasing or decreasing levels of core competencies, competitive advantages, temporal or permanency, efficiency or inefficiency etc.?)
Buckley, P. J. (2009). Internalisation thinking: From the multinational enterprise to the global factory. International Business Review, 18(3), 224-235.
Buckley, P. J. (2011). Globalization and the Global Factory. Cheltenham: Edward Elgar.
Buckley, P. J. (2016). The contribution of internalisation theory to international business: New realities and unanswered questions. Journal of World Business, 51(1), 74-82.
Contractor, F. J., Kumar, V., Kundu, S. K., & Pedersen, T. (2010). Reconceptualizing the ﬁrm in a world of outsourcing and offshoring: The organizational and geographical relocation of high-value company functions. Journal of Management Studies, 47 (8), 1417-1433.
Dess, G. G., Rasheed, A. M., McLaughlin, K. J., & Priem, R. L. (1995). The new corporate architecture. The Academy of Management Executive, 9(3), 7-18.
Hätönen, J., & Eriksson, T. (2009). 30+ years of research and practice of outsourcing – Exploring the past and anticipating the future. Journal of International Management, 15 (2), 142-155.
Lahiri, S. (2016, forthcoming). Does Outsourcing Really Improve Firm Performance? Empirical Evidence and Research Agenda. International Journal of Management Reviews.
Manning, S., Larsen, M.M. and Bharati, P., (2015). Global delivery models: The role of talent, speed and time zones in the global outsourcing industry. Journal of International Business Studies, 46(7), pp.850-877.
Oshri, I, Kotlarsky, J, Willcocks, LP. (2015). The Handbook of Global Outsourcing and Offshoring, Palgrave MacMillan, London.
Peng, M. W., Sun, S. L., Pinkham, B., & Chen, H. (2009). The Institution-Based View as a Third Leg for a Strategy Tripod. The Academy of Management Perspectives, 23(3), 63-81.
Pereira, V., and A. Malik. (2015). Human Capital Management in the Indian IT/BPO Industry. London: Palgrave Macmillan, London.
Track Chairs and Guest editor(s):
1. Dr Vijay Pereira; 2. Dr Surender Munjal; 3. Prof Alessio Ishizaka
Guest editor(s) email:
PLEASE NOTE THAT PAPERS WILL NEED TO BE SUBMITTED TO THE ABOVE GUEST EDITORS THROUGH THE JBR EES SYSTEM. http://ees.elsevier.com/jbr/default.asp
Papers for the SI can be submitted from 15th December 2016
Dr Vijay Pereira is an Associate Professor in Strategic and International HRM at the University of Wollongong in Dubai and Senior Lecturer and ex-Leader in Human Capital Development at Portsmouth Business School, United Kingdom. His principle research interest lies in the outsourcing and offshoring decision making strategies by multinational enterprises and its impact on human capital, both from the vendor and vendee context. He has published on this topic in highly ranked international journals, such as the Journal of World Business, International Studies of Management and Organization, Culture and Organisation, Journal of Organisational Change Management, Thunderbird International Business Review, International Journal of Manpower etc. He has also published three research books/monographs on this topic, is the co-editor of the Palgrave Series in Global Human Capital Management, and has also contributed to several book chapters in books edited by globally renowned authors. He was recently awarded ‘Indo-United Nations’ pin for his work. His previous experience has been in industry and offshore outsourcing consultancy.
Dr Surender Munjal is Director for the James E. Lynch India and South-Asia Business Centre and lecturer in International Business and Strategy at Leeds University Business School. He is a Fellow of Higher Education Academy. His research focuses on outsourcing and offshoring strategies of multinational enterprises in India and internationalisation strategies of Indian multinational enterprises. He has won various accolades for his research and teaching. He was the chair of evolution of multinational enterprise track in the Academy of International Business (AIB) Conference 2016. He earned his doctorate in International Business from the University of Leeds and Master of Philosophy in Marketing from Delhi School of Economics. He is also a qualified Chartered Accountant and Management Accountant.
Dr Alessio Ishizaka is Professor in Decision Analysis, research lead and Deputy Director of the Centre of Operations Research and Logistics (CORL) at the Portsmouth Business School of the University of Portsmouth. He received his PhD from the University of Basel (Switzerland). He worked successively for the University of Exeter (UK), University of York (UK) and Audencia Grande Ecole de Management Nantes (France). He has been visiting professor at the Politecnico di Torino, Università degli Studi di Trento, INSA Strasbourg, Université de Lorraine, Universität Mannheim, Università degli Studi di Modena e Reggio Emilia, Universität der Bundeswehr Hamburg, Université d’Aix-Marseille, Università degli Studi di Torino, Università degli Studi della Tuscia and Università degli Studi di Padova. His research is in the area of decision analysis, where he has published more than 40 papers. He is regularly involved in large European funded projects. He has been the chair, co-organiser and guest speaker of several conferences on this topic. Alongside his academic activities, he acts as a consultant for companies in helping them to take better decisions. He has written the key textbook Multi-criteria Decision Analysis: methods and software.