Goal Deviation Responses in Offshoring

Carlos Adrian Rodriguez, Luciano Ciravegna, Bent Petersen

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Abstract

This study analyzes how firms respond to goal deviation in their offshoring operations. Using Performance Feedback theory we argue that deviation from goals triggers feedback mechanisms that shape firms' offshoring strategy. We further argue that firms' strategic response varies with the governance mode of the offshoring project, the type of goals set for the project, and the direction of the goal deviation. Hence, it matters to firms' strategic response whether the project is in-house or outsourced, if the goal is financial or operational, and whether the goal deviation goes in a positive or negative direction. Examining a dataset of 348 offshoring projects, we find that in the case of in-house offshoring, negative deviation from financial performance goals is associated with a higher likelihood of geographic expansion – entering new foreign offshoring locations. In the case of outsourced offshoring projects, positive deviation from financial goals is associated with a higher likelihood of geographic expansion. Irrespective of governance mode, positive deviation from operational goals is associated with a higher likelihood of functional expansion – an extension of the range of activities offshored in a given foreign location.
Original languageEnglish
Title of host publicationProceedings of the Eighty-fourth Annual Meeting of the Academy of Management
EditorsSonia Taneja
Number of pages1
Place of PublicationValhalla, NY
PublisherAcademy of Management
Publication date2024
DOIs
Publication statusPublished - 2024
EventThe Academy of Management Annual Meeting 2024: Innovating for the Future: Policy, Purpose, and Organizations - Chicago, United States
Duration: 9 Aug 202413 Aug 2024
Conference number: 84
https://aom2024.eventscribe.net/

Conference

ConferenceThe Academy of Management Annual Meeting 2024
Number84
Country/TerritoryUnited States
CityChicago
Period09/08/202413/08/2024
Internet address
SeriesAcademy of Management Annual Meeting Proceedings
ISSN0065-0668

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