Failing to Estimate the Costs of Offshoring: A Study on Process Performance

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    Abstrakt

    This article investigates cost estimation errors in the context of offshoring. It is argued that an imprecise estimation of the costs related to implementing a firm activity in a foreign location has a negative impact on the process performance of that activity. Performance is deterred as operations are likely to be disrupted by managerial distraction and resource misallocation. It is also argued that this relationship is mitigated by the extent to which firms use modularity to coordinate the activity but worsened by the extent to which ongoing communication is used. The results, based on a hierarchical regression analysis of a unique survey on Danish and Swedish firms, support these arguments.
    OriginalsprogEngelsk
    TidsskriftInternational Business Review
    Vol/bind25
    Udgave nummer1
    Sider (fra-til)307-318
    Antal sider12
    ISSN0969-5931
    DOI
    StatusUdgivet - 2016

    Emneord

    • Cost estimation errors
    • Offshoring
    • Modularity
    • Ongoing communication
    • Process performance

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