The outsourcing of IT-enabled business processes: A conceptual model of the location decision

As business process outsourcing (BPO) becomes more widespread, customers, the general public and politicians have increasingly questioned and criticized firms' outsourcing decisions to foreign locations. In this paper, we develop and apply theory to improve understanding of the outsourcing location decision for IT-enabled business processes. We do this by adding a human capital dimension and moderating factors to the Dunning [Dunning, J.H., 1988. Explaining International Production. Unwin Hyman, London.] framework of infrastructure, country risk and government policy. The inclusion of a human capital dimension is justified due to the nature of IT-enabled business processes, with their inherent tradeoffs between high tech and high touch. The model also incorporates firm-specific moderating factors, such as the firm's outsourcing objectives and experience, and situation-specific moderators including the nature of the business process and customer expectations. The model provides a way for firms and researchers to take a more systematic and comprehensive approach to outsourcing location decisions. We conclude with a discussion of the managerial and research implications.     

Information Technology and Process Performance: An Empirical Investigation of the Interaction Between IT and Non‐IT Resources*

Drawing on the resource‐based view, we propose a configurational perspective of how information technology (IT) assets and capabilities affect firm performance. Our premise is that IT assets and IT managerial capabilities are components in organizational design, and as such, their impact can only be understood by taking into consideration the interactions between those IT assets and capabilities and other non‐IT components. We develop and test a model that assesses the impact of explicit and tacit IT resources by examining their interactions with two non‐IT resources (open communication and business work practices). Our analysis of data collected from a sample of firms in the third‐party logistics industry supports the proposed configurational perspective, showing that IT resources can either enhance (complement) or suppress (by substituting for) the effects of non‐IT resources on process performance. More specifically, we find evidence of complementarities between shared business–IT knowledge and business work practice and between the scope of IT applications and an open communication culture in affecting the performance of the customer‐service process; but there is evidence of substitutability between shared knowledge and open communications. For decision making, our results reinforce the need to account for all dimensions of possible interaction between IT and non‐IT resources when evaluating IT investments.     

Offshoring Business Process Services and Governance Control Mechanisms: An Examination of Service Providers from India

As emerging markets increasingly rely on service businesses through offshore outsourcing, we examine the role of governance control mechanisms in improving performance among business process outsourcing (BPO) service providers in India. Using data collected from 205 emerging market‐based BPO service providers in India, we examine the antecedents and consequences of establishing governance control mechanisms in BPO service providers. Specifically, we examine how structural (use of contracts with the client), administrative (effective allocation and demarcation of responsibilities within the firm), and relational (collaboration and information sharing with the client) mechanisms drive the performance of a BPO service provider operating in an emerging market. We also examine how key task‐related (task connectivity and task security) and client‐related (end customer orientation and global control) antecedents influence the use of different governance control approaches in this environment. Our analysis finds that both task connectivity and task security significantly impact use of structural and administrative mechanisms, whereas end customer orientation is significantly associated with the strength of the relational mechanisms governing the emerging market‐based BPO service provider and its client. Further global control significantly influences the strength of the structural mechanisms between the client and the BPO service provider. Finally, the three mechanisms have a complementary influence in driving the BPO service provider's performance.     

From blind spots to hotspots: How knowledge services clusters develop and attract foreign investment

This paper explores local and global dynamics underlying the development of knowledge services clusters, which we define as new geographic concentrations of technical talent and service providers offering upstream technical and knowledge-intensive business services to regional and global clients. Taking a co-evolutionary perspective on the development of knowledge services clusters in Latin America, based on data from the Offshoring Research Network (ORN), we find that cluster growth results from intersecting trajectories: the emergence of local talent pools and capabilities initially serving local and regional demand; broadening global search for talent and expertise by multinational corporations; and internationalization strategies of service providers competing to serve global clients. Findings suggest that increasing commoditization of knowledge services opens up windows of opportunity for new clusters, but also involves challenges for sustainable growth. Results may stimulate future research on global sourcing and cluster development.     

International outsourcing of services: A partnership model

The business landscape is currently witnessing widespread migration of service functions from developed nations like the U.S to several foreign destinations as India, China, Ireland, Philippines etc. This happens as more and more firms engage in international outsourcing of services (IOS) to survive in today's highly competitive business environment. Despite increase in IOS, the nature of partnerships involved between clients and their overseas providers have not received adequate attention in the scholarly literature. In this paper, we develop a conceptual model that explains three possible types of IOS partnership. We discuss how these partnerships vary in the way they are conceived and implemented. Propositions are offered after elaborating on each type of partnership. We conclude by discussing the academic and practical implications of our model.     

Do service-oriented IT architectures facilitate business process outsourcing?

How does a firm’s IT architecture affect its potential to outsource business processes? As Information Technology (IT) has become many firms’ essential operational infrastructure or “backbone”, we are interested in scrutinizing to what extent the kind of IT architecture affects a firm’s boundaries or the plasticity of its boundaries. Focusing on the particular concept of service-oriented architectures (SOA), we concretely ask: How does SOA affect business process outsourcing potentials? Since SOA is widely expected to modularize the IT implementation of business processes, it should increase business process outsourcing (BPO) in terms of buying in the provision of single business functionalities. We develop and empirically evaluate a theoretical model that conceptualizes the relationship between SOA and BPO. Questionnaire data from 115 firms give first evidence that SOA facilitates BPO. By increasing IT modularity, SOA supports BPO by increasing sourcing flexibility and, in particular, operational benefits, while at the same time lowering financial risks and strategic risks, such as lock-in. Overall, however, firms see SOA-based BPO mainly in an operational context with low hidden costs and little strategic benefits.     

Capability,Quality, and Performance of Offshore IS Vendors: A Theoretical Framework and Empirical Investigation

Information systems (IS) offshoring has become a widespread practice and a strategic sourcing choice for many firms. While much has been written by researchers about the factors that lead to successful offshoring arrangements from the client's viewpoint, the vendor's perspective has been largely scarce. The vendor perspective is equally important as offshore IS vendors need to make important decisions in terms of delivering operational and strategic performance and aligning their resources and processes in order to meet or exceed targeted outcomes. In this article, we propose and test a three‐level capability–quality–performance (CQP) theoretical framework to understand vendor outcomes and their antecedents. The first level of the framework represents three vendor capabilities: relationship management, contract management, and information technology management. The second level has three mediating variables representing process quality: partnership, service, and deliverable quality. The third level has three dependent variables representing vendor outcomes: operational performance, strategic performance, and satisfaction. The model was tested with 188 vendor firms from India and China, the two most popular destinations for IS offshoring. Results support the CQP framework; vendor capabilities are significant predictors of intermediate quality measures, which in turn affect vendor outcomes. Implications of the study findings to both theory development and IS offshore vendor strategic decision making are discussed.     

Does ‘the China Option’ influence subsidiary technology sourcing strategy?

We draw on transaction cost economics and the technology innovation management literature to advance a contextual model of the link between the perceived influence of China on technology strategy and MNC subsidiary sourcing strategy. In particular, we hypothesize that the relationship between a perceived influence of China on technology strategy and MNC subsidiary process technology sourcing strategy is moderated by the innovation context. Here, we consider the innovation context to be externally represented by the appropriability regime and dominant design, while internally it is measured by the subsidiary's level of complementary assets. We test our predictions on a multi-industry sample of 111 MNC subsidiaries from the Association of Equipment Manufacturers. We find support for the moderating influence of the innovation contexts of appropriability regime and complementary assets.     

Governance Choice,Sourcing Relationship Characteristics,and Relationship Performance

Past work on exchange relationships has debated the efficacy of partnership versus arm's‐length governance on performance of a buyer–supplier relationship. However, how these governance approaches leverage key supplier specific relationship characteristics has not been examined. In this study, we examine the moderating role of governance choice (arm's‐length versus partnership governance) in leveraging key supplier specific characteristics to achieve superior performance for the buyer in a relationship. Specifically, drawing from residual rights theory, we argue that the governance choice buyers make moderates the impact of supplier flexibility, supplier human capital and relationship dependency on performance. Our findings suggest that, for a buyer, the benefits of supplier flexibility and relationship dependency are better realized in partnership governance as opposed to arm's‐length governance. Further, our findings suggest that although buyers choose a specific governance approach consistent with their outsourcing motivation, the choice of governance is critical to leveraging the impact of supplier characteristics due to the moderation effects studied. We elaborate on these effects and discuss the implications of our findings.     

Small Steps that Matter: Incremental Learning,Slack Resources and Organizational Performance

This paper examines the antecedents, consequences and moderators of incremental learning capabilities, understood as an organization's ability to gradually adapt and expand its knowledge base. Conceptualized as a dynamic capability, incremental learning is expected to be a vital driver of organizational adaptation. As dynamic capabilities consist of bundles of relatively stable routines, it is proposed that an organization's level of incremental learning capabilities will be highly persistent over time. It is also argued that building and exercising incremental learning capabilities is resource intensive and will as such tend to rely on the availability of sufficient slack resources. Last, it is suggested that incremental learning will be positively related to organizational performance, especially when the underlying business model is labour rather than capital intensive. To test these theoretical ideas, the authors draw on extensive panel data from all public non‐specialist hospitals in England and find broad support for their hypotheses.     

International Digital Competence

This article evaluates which specific capabilities of a firm enable its internationalization process, with an emphasis on companies with exclusively digital products. The results provide an opportunity to examine the strength of earlier findings in International Entrepreneurship (IE) research, which has largely addressed high-tech ventures that export physical products. We reveal a set of intangible capabilities that are especially relevant to digital companies and their internationalization process, without foreign direct investment (FDI) or with limited outward assets characterized by non-equity entry modes. Using an inductive, multiple-case study methodology, we develop a new construct that we term ‘international digital competence’ (IDC). IDC consists of four capabilities critical to these companies: cross-cultural programming skills, global virtual networks, cross-border digital monetizing adaptability, and international business model reconfiguration. The possession of IDC enables digital companies to expand internationally through an online presence. Therefore, we propose that international online expansion can increase the likelihood of a digital company performing outward assets via non-equity entry modes. We also conceived that the digital company's strategy to achieve non-equity investments is moderated by its entrepreneur's international orientation.     

A contingency view on the impact of supplier development on design and conformance quality performance

This study extends contingency theory’s account of organisational size and culture by exploring the relationship between supplier development and internal quality performance. Drawing on supplier development research, the study aims to examine the moderating impact of organisational size and culture on the relationship between supplier development and design and conformance quality dimensions. Using survey data of 518 UK manufacturing organisations, we found that larger organisations with greater access to resources and a strong supply chain orientation culture tend to place the most weight on supplier development programmes which in turn yield higher internal quality performance. These findings contribute to ‘Operations Management Practice Contingency Research (OM PCR)’ and will raise awareness among operations managers of their future sourcing decisions.     

Entrepreneurial orientation and social ties in transitional economies

Recent research suggests that entrepreneurial orientation (EO) has a more complex effect on performance (i.e. non-linear instead of linear) than previously considered. We extend this view by examining the non-linear effect of each individual dimension of EO (i.e. innovativeness, proactiveness, and risk-taking) on firm performance in the context of a transitional, collectivist economy. Drawing upon social capital theory, we also examine under which social capital conditions (i.e., business and political ties) each dimension of EO is most effective. Using survey data from 137 firms in Vietnam Top 500 Companies, this study shows that innovativeness and proactiveness have inverted U-shaped relationships with firm performance, while the effect of risk-taking on firm performance is also non-linear but in the form of increasing returns. Findings also show that social capital from business ties differentially moderates the effects of EO dimensions on performance. Similarly, social capital from political ties has different moderating effects on the innovativeness-performance and proactiveness-performance linkages. The findings urge managers of firms operating in transitional economies to take the levels of social capital from business ties and political ties into consideration when making their decision on which entrepreneurial strategy to pursue.     

Data‐Driven Supply Chain Orientation and Financial Performance: The Moderating Effect of Innovation‐Focused Complementary Assets

Drawing on the complementary assets framework, this study explores the moderating effect of innovation‐focused complementary assets (CA‐I) on the relationship between a data‐driven supply chain orientation (DDSCO) and firm financial performance. To test the moderating effect, survey data gathered from 329 manufacturing firms in China were analysed using a moderated regression analysis. The results indicate that DDSCO has a significant positive effect on financial performance, and that capabilities for product and process innovation function as complementary assets moderating the DDSCO–performance relationship. The findings suggest that innovation‐focused complementary assets are performance differentiators when paired with a DDSCO and explain why some firms obtain financial benefits from the development of a DDSCO while others do not. Specifically, competitive advantage from a DDSCO may not be realized unless CA‐I and potentially other complementary assets are harnessed, thus providing useful practical guidance to managers. Hence, the study provides empirical support for the complementary assets framework.     

Effects of Partnership Quality,Talent Management,and Global Mindset on Performance of Offshore IT Service Providers in India

This paper investigates the effects of partnership quality, talent management and global mindset on the performance of offshore service providers (OSPs) in the information technology sector in India. The findings show that partnership quality has partial and strong mediation effects on the impact of talent management and global mindset on performance of OSPs. We also find that talent management strongly mediates the effects of global mindset on partnership quality. Overall, the results confirm that global mindset, by itself, has limited direct influence on the performance of OSPs and that the full benefits of global mindset can only be enjoyed by OSPs which have well developed talent management and high quality partnerships with their clients. The implications and limitations of the study are also discussed.     

How can David orchestrate resources to enhance firm performance? A dynamic approach to coping with resource constraints

Given that the possession of abundant resources does not always guarantee superior firm performance, this study proposes a dynamic approach to enhancing firm value. Building on the resource orchestration thesis, we investigate how firms facing resource constraints enhance their capabilities over time by orchestrating resources and how this resource orchestration can play a role in improving firm performance. Using the dynamic perspective, this study identifies four resource orchestration modes, which are specified based on how a given firm dynamically allocates its resources to technology (enacted by R&D activities) and marketing (enacted by advertising activities). Accordingly, we claim that firms with resource constraints can enhance their performance by escalating or altering their resources over time. To test our hypotheses, we used a sample of 4078 small and medium-sized enterprises in manufacturing industries between 1984 and 2018. We found that focus escalation for technology positively affects firm performance, captured by Tobin's q, and that focus alternation toward either technology or market is positively related to firm performance. Finally, we discuss the theoretical and practical implications of our findings.     

管理者关系特性对海外子公司知识获取及公司绩效的影响研究

基于组织学习理论和社会资本理论,考察了管理者关系特性对海外子公司内外部网络知识获取和企业绩效的影响。研究结果显示,母子公司管理者之间的信任和沟通频率对获取母公司知识有正向影响,海外子公司管理者和本地重要企业管理者之间的信任对获取本地商务知识有正向影响,海外子公司管理者和本地政府主要负责人之间的私人关系对获取本地制度知识有显著影响。此外,本地制度知识在母公司知识对海外子公司绩效的影响中起正向调节作用,本地商务知识起负向调节作用。     

创始团队关键人力资本、战略地位优势与创业绩效

鉴于创始团队关键人力资本对新创企业发展的重要性及已有研究的不足,在界定相关概念及其结构维度的基础上,遵循资源/能力-地位-绩效理论逻辑,构建基于能力视角的创始团队关键人力资本对新创服务企业战略地位优势和绩效影响的概念模型。以环渤海、长三角、珠三角和海西地区的新创高技术服务企业创始团队成员为调研对象,基于182份有效问卷,运用SPSS 19.0和AMOS 17.0软件及多元层级回归方法分析数据。研究结果表明,创始团队关键人力资本的3个维度均显著提升新创高技术服务企业绩效,但作用机理不同,绩效效应存在差异,服务扩展优势部分中介适应性营销能力和市场链接能力与绩效的关系,服务扩展优势和服务差异化优势同时完全中介新服务开发能力与绩效关系;适应性营销能力和市场链接能力直接和通过服务扩展优势间接产生的综合绩效效应均显著高于新服务开发能力通过服务扩展优势和服务差异化优势间接产生的综合绩效效应;服务扩展优势在服务差异化优势转化为企业绩效的过程中发挥部分中介作用。新创高技术服务企业应合理配置和整合创始团队成员多样化能力,促进关键人力资本与战略地位优势的协同匹配。     

Toward a capabilities perspective of the small firm

This paper attempts to explain the competitive advantages of the small firm in the capabilities perspective. It begins by identifying the kinds of strategic assets possessed by small firms. It argues that entrepreneurship and a simple capital structure are the sources of dynamism for small firms. The relationship between the small firm's resources and its capabilities are then critically examined. In particular, the analysis focuses on the influences of strategic assets on the organizational flexibility – a significant source of competitive advantage enjoyed by small firms. The competitive attributes of small firms are further discussed in terms of firm's internal and external capabilities. Finally, the relationship between the small firm's capabilities and the choice of technology strategies is examined.     

Open innovation and quality management: the moderating role of interorganisational IT infrastructure and complementary learning styles

This study seeks to explain the influence of quality management on the relationship between open innovation and performance. We propose that, to contribute to open innovation performance, an organisation’s commitment to quality improvement must rely on the combination of its own resources and capabilities and its open innovation partners’ resources and capabilities. Specifically, we examine the moderating role of an interorganisational IT infrastructure and the complementarity of learning styles among an organisation committed to quality improvement and its supply network. Using data from 270 managers of European firms, our results show that the negative effects of quality management on open innovation performance can be overcome by complementing the organisation’s learning style with that of its open innovation partner, particularly, its supply network, and, most importantly, obtaining information technologies compatible with those of its supply network members.