Uncovering the Hidden Costs of Offshoring: The Interplay of Complexity, Organizational Design, and Experience

    Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

    Resumé

    This study investigates estimation errors due to hidden costs—the costs of implementation that are neglected in strategic decision-making processes—in the context of services offshoring. Based on data from the Offshoring Research Network, we find that decision makers are more likely to make cost-estimation errors given increasing configuration and task complexity in captive offshoring and offshore outsourcing, respectively. Moreover, we show that experience
    and a strong orientation toward organizational design in the offshoring strategy reduce the cost-estimation errors that follow from complexity. Our findings contribute to research on the effectiveness of sourcing and global strategies by stressing the importance of organizational design and experience in dealing with increasing complexity.
    This study investigates estimation errors due to hidden costs—the costs of implementation that are neglected in strategic decision-making processes—in the context of services offshoring. Based on data from the Offshoring Research Network, we find that decision makers are more likely to make cost-estimation errors given increasing configuration and task complexity in captive offshoring and offshore outsourcing, respectively. Moreover, we show that experience
    and a strong orientation toward organizational design in the offshoring strategy reduce the cost-estimation errors that follow from complexity. Our findings contribute to research on the effectiveness of sourcing and global strategies by stressing the importance of organizational design and experience in dealing with increasing complexity.
    SprogEngelsk
    TidsskriftStrategic Management Journal
    Vol/bind34
    Udgave nummer5
    Sider533-552
    Antal sider20
    ISSN0143-2095
    DOI
    StatusUdgivet - 2013

    Emneord

    • Hidden costs
    • Offshoring
    • Complexity
    • Estimation errors
    • Organizational design

    Citer dette

    @article{db04f8abc31f48cb8fe709f87b3b8bfc,
    title = "Uncovering the Hidden Costs of Offshoring: The Interplay of Complexity, Organizational Design, and Experience",
    abstract = "This study investigates estimation errors due to hidden costs—the costs of implementation that are neglected in strategic decision-making processes—in the context of services offshoring. Based on data from the Offshoring Research Network, we find that decision makers are more likely to make cost-estimation errors given increasing configuration and task complexity in captive offshoring and offshore outsourcing, respectively. Moreover, we show that experienceand a strong orientation toward organizational design in the offshoring strategy reduce the cost-estimation errors that follow from complexity. Our findings contribute to research on the effectiveness of sourcing and global strategies by stressing the importance of organizational design and experience in dealing with increasing complexity.",
    keywords = "Hidden costs, Offshoring, Complexity, Estimation errors, Organizational design",
    author = "Larsen, {Marcus M.} and Stephan Manning and Torben Pedersen",
    year = "2013",
    doi = "10.1002/smj.2023",
    language = "English",
    volume = "34",
    pages = "533--552",
    journal = "Strategic Management Journal",
    issn = "0143-2095",
    publisher = "Wiley",
    number = "5",

    }

    Uncovering the Hidden Costs of Offshoring : The Interplay of Complexity, Organizational Design, and Experience. / Larsen, Marcus M.; Manning, Stephan; Pedersen, Torben.

    I: Strategic Management Journal, Bind 34, Nr. 5, 2013, s. 533-552.

    Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

    TY - JOUR

    T1 - Uncovering the Hidden Costs of Offshoring

    T2 - Strategic Management Journal

    AU - Larsen,Marcus M.

    AU - Manning,Stephan

    AU - Pedersen,Torben

    PY - 2013

    Y1 - 2013

    N2 - This study investigates estimation errors due to hidden costs—the costs of implementation that are neglected in strategic decision-making processes—in the context of services offshoring. Based on data from the Offshoring Research Network, we find that decision makers are more likely to make cost-estimation errors given increasing configuration and task complexity in captive offshoring and offshore outsourcing, respectively. Moreover, we show that experienceand a strong orientation toward organizational design in the offshoring strategy reduce the cost-estimation errors that follow from complexity. Our findings contribute to research on the effectiveness of sourcing and global strategies by stressing the importance of organizational design and experience in dealing with increasing complexity.

    AB - This study investigates estimation errors due to hidden costs—the costs of implementation that are neglected in strategic decision-making processes—in the context of services offshoring. Based on data from the Offshoring Research Network, we find that decision makers are more likely to make cost-estimation errors given increasing configuration and task complexity in captive offshoring and offshore outsourcing, respectively. Moreover, we show that experienceand a strong orientation toward organizational design in the offshoring strategy reduce the cost-estimation errors that follow from complexity. Our findings contribute to research on the effectiveness of sourcing and global strategies by stressing the importance of organizational design and experience in dealing with increasing complexity.

    KW - Hidden costs

    KW - Offshoring

    KW - Complexity

    KW - Estimation errors

    KW - Organizational design

    U2 - 10.1002/smj.2023

    DO - 10.1002/smj.2023

    M3 - Journal article

    VL - 34

    SP - 533

    EP - 552

    JO - Strategic Management Journal

    JF - Strategic Management Journal

    SN - 0143-2095

    IS - 5

    ER -