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Role of Corporate-Wide Offshoring Strategy on Offshoring Drivers, Risks and Performance

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  • Silvia Massini
  • Nidthida Perm-Ajchariyawong
  • Arie Lewin

Abstract

In this study we investigate the role of corporate offshoring strategy on offshoring decisions and performance. Based on 876 offshoring projects from 226 companies obtained by means of surveys conducted in the USA and Europe, we examine the effect of offshoring strategy on factors influencing firms' views of offshoring, and the effect of offshoring strategy on offshoring performance. Separate analyses were conducted for US and European companies in order to explore any regional heterogeneity in offshoring. A comparative analysis between companies with and without an offshoring strategy reveals that when making offshoring decisions, the former consider a broader range of factors (drivers, risks and locations) as important compared to companies without an offshoring strategy, suggesting association between offshoring strategy and managerial attention. The results also indicate that the adoption of a corporate offshoring strategy has a significant positive effect on cost savings achieved from offshore implementations, and that innovation activities have a significant negative impact on cost savings, but only for European companies.

Suggested Citation

  • Silvia Massini & Nidthida Perm-Ajchariyawong & Arie Lewin, 2010. "Role of Corporate-Wide Offshoring Strategy on Offshoring Drivers, Risks and Performance," Industry and Innovation, Taylor & Francis Journals, vol. 17(4), pages 337-371.
    • Handle: RePEc:taf:indinn:v:17:y:2010:i:4:p:337-371
    DOI: 10.1080/13662716.2010.496242
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    References listed on IDEAS

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    1. Dossani, Rafiq & Kenney, Martin, 2003. "Went for Cost, Stayed for Quality?: Moving the Back Office to India," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt0b7764tt, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
    2. Ernst, Dieter & East-West Center (ed.), 2006. "Innovation Offshoring:Asia's Emerging Role in Global Innovation Networks," Economics Study Area Special Reports, East-West Center, Economics Study Area, volume 10, number ewcsreport1, January.
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