IDEAS home Printed from https://ideas.repec.org/p/cir/cirwor/2009s-05.html
   My bibliography  Save this paper

The Impact of Distance on Offshore Business Relationships

Author

Listed:
  • Benoit Aubert
  • Suzanne Rivard
  • Mathieu Templier

Abstract

Offshoring can reduce the production cost of an activity. At the same time, it can generate additional management costs. This paper develops a model explaining the main drivers of the efforts required to manage offshore activities. Results show that distance plays an important role in the determination of the effort level. However, it is not simply a cultural or geographical but a more complex notion labelled perceived distance. IT played an interesting role in the determination of effort. It facilitated a higher formalization of the information exchanged and mitigated the impact of geographical distance on the effort required. La délocalisation des activités permet parfois de réduire le coût de ces activités. En même temps, cette délocalisation génère des coûts de gestion additionnels. Cet article développe un modèle expliquant les principaux facteurs qui influencent l'effort de gestion requis pour gérer des activités à distance. Les résultats montrent que la distance a un rôle important. Toutefois, ce n'est pas simplement la distance géographique ou culturelle mais plutôt une « distance perçue » qui semble le facteur déterminant. Les technologies de l'information facilitent la formalisation de l'information échangée et réduisent l'impact de la distance sur l'effort de gestion.

Suggested Citation

  • Benoit Aubert & Suzanne Rivard & Mathieu Templier, 2009. "The Impact of Distance on Offshore Business Relationships," CIRANO Working Papers 2009s-05, CIRANO.
    • Handle: RePEc:cir:cirwor:2009s-05
    as

    Download full text from publisher

    File URL: https://cirano.qc.ca/files/publications/2009s-05.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anil Gurung & Edmund Prater, 2006. "A Research Framework for the Impact of Cultural Differences on IT Outsourcing," Journal of Global Information Technology Management, Taylor & Francis Journals, vol. 9(1), pages 24-43, January.
    2. Madhu T. Rao & William Poole & Peter V. Raven & Diane L. Lockwood, 2006. "Trends, Implications, and Responses to Global IT Sourcing: A Field Study," Journal of Global Information Technology Management, Taylor & Francis Journals, vol. 9(3), pages 5-23, July.
    3. Bert Scholtens & Lammertjan Dam, 2007. "Cultural Values and International Differences in Business Ethics," Journal of Business Ethics, Springer, vol. 75(3), pages 273-284, October.
    4. Ronald E. Rice & Douglas E. Shook, 1990. "Relationships Of Job Categories And Organizational Levels To Use Of Communication Channels, Including Electronic Mail: A Meta‐Analysis And Extension," Journal of Management Studies, Wiley Blackwell, vol. 27(2), pages 195-229, March.
    5. J. Bradford Jensen & Lori G. Kletzer, 2005. "Tradable Services: Understanding the Scope and Impact of Services Outsourcing," Working Paper Series WP05-9, Peterson Institute for International Economics.
    6. David E. M. Sappington, 1991. "Incentives in Principal-Agent Relationships," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 45-66, Spring.
    7. Bart Nooteboom, 2000. "Learning by Interaction: Absorptive Capacity, Cognitive Distance and Governance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 4(1), pages 69-92, March.
    8. Lilach Nachum & Srilata Zaheer, 2005. "The persistence of distance? The impact of technology on MNE motivations for foreign investment," Strategic Management Journal, Wiley Blackwell, vol. 26(8), pages 747-767, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Najah Attig & Narjess Boubakri & Sadok El Ghoul & Omrane Guedhami, 2016. "Firm Internationalization and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 134(2), pages 171-197, March.
    2. Schmid, Andreas, 2007. "Incentive Compatibility and Efficiency in the contractual Insurer-Provider Relationship: Economic Theory and practical Implications: The Case of North Carolina," MPRA Paper 23311, University Library of Munich, Germany, revised 2008.
    3. Timothy J. Bartik & Nathan Sotherland, 2019. "Local Job Multipliers in the United States: Variation with Local Characteristics and with High-Tech Shocks," Upjohn Working Papers 19-301, W.E. Upjohn Institute for Employment Research.
    4. Takuma Kimura & Mizuki Nishikawa, 2018. "Ethical Leadership and Its Cultural and Institutional Context: An Empirical Study in Japan," Journal of Business Ethics, Springer, vol. 151(3), pages 707-724, September.
    5. Kim, Serena Y., 2020. "Institutional arrangements and airport solar PV," Energy Policy, Elsevier, vol. 143(C).
    6. Choi, Kyungsoo, 2022. "Job creation during Korea's transition to a knowledge economy," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 44(3), pages 75-99.
    7. Ansgar Richter & Susanne Schrader, 2017. "Levels of Employee Share Ownership and the Performance of Listed Companies in Europe," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 396-420, June.
    8. Subramanian Rangan & Metin Sengul, 2009. "Information technology and transnational integration: Theory and evidence on the evolution of the modern multinational enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1496-1514, December.
    9. Lydia Bals & Jon F. Kirchoff & Kai Foerstl, 2016. "Exploring the reshoring and insourcing decision making process: toward an agenda for future research," Operations Management Research, Springer, vol. 9(3), pages 102-116, December.
    10. Wojciech Piotrowicz & Damian Kedziora, 2018. "Outsourcing of Information Technology and Business Processes in Poland: Motivations and Environmental Factors," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 16(4 (Winter), pages 307-333.
    11. Stephanie Kelley, 2022. "Employee Perceptions of the Effective Adoption of AI Principles," Journal of Business Ethics, Springer, vol. 178(4), pages 871-893, July.
    12. Ryan M. Hynes & Bernardo S. Buarque & Ronald B. Davies & Dieter F. Kogler, 2020. "Hops, Skip & a Jump - The Regional Uniqueness of Beer Styles," Working Papers 202013, Geary Institute, University College Dublin.
    13. Brown, Martin & De Haas, Ralph & Sokolov, Vladimir, 2013. "Regional Inflation and Financial Dollarization," Working Papers on Finance 1327, University of St. Gallen, School of Finance.
    14. D’Angelo, Alfredo & Presutti, Manuela, 2019. "SMEs international growth: The moderating role of experience on entrepreneurial and learning orientations," International Business Review, Elsevier, vol. 28(3), pages 613-624.
    15. Paul Goldsmith-Pinkham & Isaac Sorkin & Henry Swift, 2020. "Bartik Instruments: What, When, Why, and How," American Economic Review, American Economic Association, vol. 110(8), pages 2586-2624, August.
    16. Stefano Usai & Emanuela Marrocu & Raffaele Paci, 2017. "Networks, Proximities, and Interfirm Knowledge Exchanges," International Regional Science Review, , vol. 40(4), pages 377-404, July.
    17. van Rijnsoever, Frank J. & Hessels, Laurens K., 2011. "Factors associated with disciplinary and interdisciplinary research collaboration," Research Policy, Elsevier, vol. 40(3), pages 463-472, April.
    18. MaÅ‚gorzata Runiewicz-Wardyn, 2020. "The role proximity plays in university-driven social networks. The case of the US and EU life-science clusters," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 16(3), pages 167-196.
    19. Norlander, Peter & Erickson, Christopher, 2022. "The Role of Institutions in Job Teleworkability Before and After the Covid-19 Pandemic," GLO Discussion Paper Series 1172, Global Labor Organization (GLO).
    20. Joelle Forest, 2009. "The Creative Rationality As A Key Driver For Enhancing Innovation Capability," Post-Print halshs-00620865, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cir:cirwor:2009s-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/ciranca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.