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Governing business process offshoring: Properties, processes, and preferred modes

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  • Luo, Yadong
  • Wang, Stephanie Lu
  • Jayaraman, Vaidyanathan
  • Zheng, Qinqin

Abstract

This article examines an important yet understudied issue—the governance mode for business process offshoring (BPO). By applying transaction cost economics and organizational control perspective in the global BPO context, we suggest that BPO's governance mode (foreign captive, joint venture, and independent vendor) is determined by task features, such as knowledge specialization, information security, and process codifiability, and by needed process integration, horizontally between departments and units within the provider and vertically between the provider and its global client and its local subcontractor. Findings from our analysis of 308 global BPO units in India and China confirm our hypotheses.

Suggested Citation

  • Luo, Yadong & Wang, Stephanie Lu & Jayaraman, Vaidyanathan & Zheng, Qinqin, 2013. "Governing business process offshoring: Properties, processes, and preferred modes," Journal of World Business, Elsevier, vol. 48(3), pages 407-419.
    • Handle: RePEc:eee:worbus:v:48:y:2013:i:3:p:407-419
    DOI: 10.1016/j.jwb.2012.07.024
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    4. Hung, Tung Min & Contractor, Farok & Lo, Yi-Ju, 2022. "Manage the value and liability of offshoring innovation," International Business Review, Elsevier, vol. 31(2).
    5. Manning, Stephan, 2014. "Mitigate, tolerate or relocate? Offshoring challenges, strategic imperatives and resource constraints," Journal of World Business, Elsevier, vol. 49(4), pages 522-535.
    6. Vendrell-Herrero, Ferran & Gomes, Emanuel & Bustinza, Oscar F. & Mellahi, Kamel, 2018. "Uncovering the role of cross-border strategic alliances and expertise decision centralization in enhancing product-service innovation in MMNEs," International Business Review, Elsevier, vol. 27(4), pages 814-825.
    7. Schoenherr, Tobias & Narayanan, Sriram & Narasimhan, Ram, 2015. "Trust formation in outsourcing relationships: A social exchange theoretic perspective," International Journal of Production Economics, Elsevier, vol. 169(C), pages 401-412.
    8. Stephanie Lu Wang & Qian Gu & Mary Ann Glinow & Paul Hirsch, 2020. "Cultural industries in international business research: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 665-692, June.
    9. White, George O. & Boddewyn, Jean J. & Galang, Roberto Martin N., 2015. "Legal system contingencies as determinants of political tie intensity by wholly owned foreign subsidiaries: Insights from the Philippines," Journal of World Business, Elsevier, vol. 50(2), pages 342-356.
    10. 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.
    11. Stephanie Lu Wang & Dan Li, 2019. "Responding to public disclosure of corporate social irresponsibility in host countries: Information control and ownership control," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(8), pages 1283-1309, October.

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