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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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    8. Hung, Tung Min & Contractor, Farok & Lo, Yi-Ju, 2022. "Manage the value and liability of offshoring innovation," International Business Review, Elsevier, vol. 31(2).
    9. 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.
    10. 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.
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