Global Sourcing of Advanced Services: A Strategic Management Analysis

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    Abstract

    In this exploratory study we take a strategic management approach to global sourcing of advanced services. We discuss in which ways conventional sourcing differs from strategic sourcing and what impels firms to aim for the latter (or, prevent them from doing so). Potentially, strategic global sourcing of services has high returns, but is also associated with high risks and needs for organizational changes. Strategic global sourcing may therefore be outside firms’ “comfort zone” – a composite of organizational knowledge transferability, structural inertia, managers’ risk preferences, and – most interesting in a strategic management perspective ‐ their ability to mitigate risks of strategic global sourcing. One important risk reducing measure is internalization of (out)sourced service activities. Many firms instigate global sourcing via conventional offshore outsourcing. However, as the human asset specificity of the outsourcing operation increases, firms are pulled out of their comfort zones and a desire for internalization arises. An illustrative company case gives suggestions as to how, in practice, internalization may be accomplished without losing valuable human assets held by the local service providers.
    Original languageEnglish
    Publication date2011
    Number of pages32
    Publication statusPublished - 2011
    EventThe 27th EGOS Colloquium 2011 - Göteborg , Sweden
    Duration: 6 Jun 20119 Jun 2011
    Conference number: 27
    http://www.egosnet.org/jart/prj3/egosnet/data/uploads/Gothenburg_2011/EGOS-2011_Program-book.pdf

    Conference

    ConferenceThe 27th EGOS Colloquium 2011
    Number27
    CountrySweden
    CityGöteborg
    Period06/06/201109/06/2011
    OtherHosted by the School of Business, Economics and Law,<br/>University of Gothenburg
    Internet address

    Keywords

    • Global sourcing
    • Services
    • Strategic management
    • Comfort zone
    • Internalization

    Cite this

    Ørberg Jensen, P. D., & Petersen, B. (2011). Global Sourcing of Advanced Services: A Strategic Management Analysis. Abstract from The 27th EGOS Colloquium 2011, Göteborg , Sweden.