Global Sourcing of Advanced Services: A Strategic Management Analysis on Activity Level

    Research output: Contribution to conferenceConference abstract for conferenceResearchpeer-review

    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 pages33
    Publication statusPublished - 2011
    EventStrategic Management Society 31st Annual International Conference. SMS 2011 - Miami, United States
    Duration: 6 Nov 20119 Nov 2011
    Conference number: 31

    Conference

    ConferenceStrategic Management Society 31st Annual International Conference. SMS 2011
    Number31
    CountryUnited States
    CityMiami
    Period06/11/201109/11/2011

    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 on Activity Level. Abstract from Strategic Management Society 31st Annual International Conference. SMS 2011, Miami, United States.
    Ørberg Jensen, Peter D. ; Petersen, Bent. / Global Sourcing of Advanced Services : A Strategic Management Analysis on Activity Level. Abstract from Strategic Management Society 31st Annual International Conference. SMS 2011, Miami, United States.33 p.
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    Global Sourcing of Advanced Services : A Strategic Management Analysis on Activity Level. / Ørberg Jensen, Peter D.; Petersen, Bent.

    2011. Abstract from Strategic Management Society 31st Annual International Conference. SMS 2011, Miami, United States.

    Research output: Contribution to conferenceConference abstract for conferenceResearchpeer-review

    TY - ABST

    T1 - Global Sourcing of Advanced Services

    T2 - A Strategic Management Analysis on Activity Level

    AU - Ørberg Jensen, Peter D.

    AU - Petersen, Bent

    PY - 2011

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    N2 - 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.

    AB - 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.

    KW - Global sourcing

    KW - Services

    KW - Strategic management

    KW - Comfort zone

    KW - Internalization

    KW - Global sourcing

    KW - Services

    KW - Strategic management

    KW - Comfort zone

    KW - Internalization

    M3 - Conference abstract for conference

    ER -

    Ørberg Jensen PD, Petersen B. Global Sourcing of Advanced Services: A Strategic Management Analysis on Activity Level. 2011. Abstract from Strategic Management Society 31st Annual International Conference. SMS 2011, Miami, United States.