The Hidden Costs of Offshoring: The Impact of Complexity, Design Orientation and Experience

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    Abstrakt

    This study seeks to explain hidden costs of offshoring, i.e. unexpected costs resulting from the relocation of business tasks and activities outside the home country. We develop a model that highlights the role of complexity, design orientation and experience in explaining hidden costs of offshoring. Specifically, we propose that hidden costs can be explained by the combination of increasing structural, operational and social complexity of offshoring activities. In addition, we suggest that firm orientation towards organizational design as part of an offshoring strategy and offshoring experience moderate the relationship between complexity and hidden costs negatively i.e. reduces the cost generating impact of complexity. We develop three hypotheses
    and test them on comprehensive data from the Offshoring Research Network (ORN). In general, we find support for our hypotheses. A key result of our study is to suggest how hidden costs of offshoring can be mitigated through an explicit orientation towards improving organizational processes and structures as well as experience with offshoring.
    OriginalsprogEngelsk
    TitelProceedings of the 53rd Annual Meeting of the Academy of International Business
    RedaktørerShige Makingo , Tunga Kiyak
    UdgivelsesstedEast Lansing, MI
    ForlagAcademy of International Business
    Publikationsdato2011
    Sider155-156
    StatusUdgivet - 2011
    BegivenhedAIB 2011 Annual Meeting: International Business for Sustainable World Development - Nagoya, Japan
    Varighed: 24 jun. 201128 jun. 2011
    Konferencens nummer: 53
    http://aib.msu.edu/events/2011/

    Konference

    KonferenceAIB 2011 Annual Meeting
    Nummer53
    LandJapan
    ByNagoya
    Periode24/06/201128/06/2011
    Internetadresse
    NavnAcademy of International Business. Annual Meeting. Proceedings
    Vol/bind53
    ISSN2078-4430

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