Creating Value through Offshore Outsourcing: An Integrative Framework
Forthcoming, Journal of International Management.
42 Pages Posted: 24 Feb 2013
Date Written: February 22, 2013
This article proposes an analytical framework to explain value creation through offshore outsourcing by addressing a key question: How do firms create value by outsourcing their business functions to foreign external providers? The growing prevalence of offshore outsourcing as a dominant business practice in global business makes this question worthy of further research attention. Situated within the organizational design literature, our proposed value creation framework also draws from strategic resource management, disintegration, location–specific resourcing, and externalization (D-L-E) and contingency perspectives. Our analysis shows that firms embarking on offshore outsourcing create value by effectively managing their internal and external resources in accordance with a changing global environment. The framework has significant implications for theory and practice and suggests avenues for further research.
Keywords: Offshore outsourcing, resource management, value creation, DLE framework
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