Making the locational choice: A case approach to the development of a theory of offshore outsourcing and internationalization

Offshore outsourcing is one of the most sustained management strategies of the 21st century, and researchers are paying attention to this contemporary, yet complex and controversial phenomenon. Despite the increasing amount of research, from the theoretical and managerial perspectives several important aspects remain inconclusive. The focus in this article is on theory development in two complex areas. The first concerns the location, the idea being to identify the factors that influence the final decision, in which ownership is not the mode of control. Secondly, the aim is to explore whether offshore outsourcing facilitates international expansion. Through a process of theoretical rationalization and inductive case analysis propositions are arrived at according to which non-locational factors most heavily impact the firm's decision to outsource offshore and its subsequent internationalization. The results indicate that this subsequent internationalization may be a by-product of offshore outsourcing, or it may be an intentional strategy. The article thus adds new aspects to the existing theory on outsourcing decision-making, which forms the basis of an emergent theory for future academic research.