Learning Paths to Offshore Outsourcing: From Cost Reduction to Knowledge Seeking

Research output: Working paperResearch

Abstract

A corporation’s offshore outsourcing may be seen as the result of a discrete, strategic decision taken in response to an increasing pressure from worldwide competition. However, empirical evidence of a representative cross-sector sample of international Danish firms indicates that offshore sourcing in low-cost countries is best described as a learning-by-doing process in which the offshore outsourcing of a corporation goes through a sequence of stages towards sourcing for innovation. Initially, a corporation’s outsourcing is driven by a desire for cost minimization. Over a period of time the outsourcing experience lessens the cognitive limitations of decision-makers as to the advantages that can be achieved through outsourcing in low-cost countries: the insourcer/vendor may not only offer cost advantages, but also quality improvement and innovation. The quality improvements that offshore outsourcing may bring about evoke a realization in the corporation that even innovative processes can be outsourced.
A corporation’s offshore outsourcing may be seen as the result of a discrete, strategic decision taken in response to an increasing pressure from worldwide competition. However, empirical evidence of a representative cross-sector sample of international Danish firms indicates that offshore sourcing in low-cost countries is best described as a learning-by-doing process in which the offshore outsourcing of a corporation goes through a sequence of stages towards sourcing for innovation. Initially, a corporation’s outsourcing is driven by a desire for cost minimization. Over a period of time the outsourcing experience lessens the cognitive limitations of decision-makers as to the advantages that can be achieved through outsourcing in low-cost countries: the insourcer/vendor may not only offer cost advantages, but also quality improvement and innovation. The quality improvements that offshore outsourcing may bring about evoke a realization in the corporation that even innovative processes can be outsourced.
LanguageEnglish
Place of PublicationFrederiksberg
PublisherDRUID - Danish Research Unit for Industrial Dynamics. CBS
Number of pages22
ISBN (Print)8778731836
StatePublished - 2005

Keywords

  • Offshore outsourcing
  • Cost reduction
  • Innovation
  • Experiential learning
  • Low-cost countries

Cite this

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title = "Learning Paths to Offshore Outsourcing: From Cost Reduction to Knowledge Seeking",
abstract = "A corporation’s offshore outsourcing may be seen as the result of a discrete, strategic decision taken in response to an increasing pressure from worldwide competition. However, empirical evidence of a representative cross-sector sample of international Danish firms indicates that offshore sourcing in low-cost countries is best described as a learning-by-doing process in which the offshore outsourcing of a corporation goes through a sequence of stages towards sourcing for innovation. Initially, a corporation’s outsourcing is driven by a desire for cost minimization. Over a period of time the outsourcing experience lessens the cognitive limitations of decision-makers as to the advantages that can be achieved through outsourcing in low-cost countries: the insourcer/vendor may not only offer cost advantages, but also quality improvement and innovation. The quality improvements that offshore outsourcing may bring about evoke a realization in the corporation that even innovative processes can be outsourced.",
keywords = "Omkostninger, Globalisering, Innovation, Internationaliseringsstrategi, Internationalisering, Outsourcing, Offshore outsourcing, Cost reduction, Innovation, Experiential learning, Low-cost countries",
author = "Peter Maskell and Torben Pedersen and Bent Petersen and Jens Dick-Nielsen",
year = "2005",
language = "English",
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publisher = "DRUID - Danish Research Unit for Industrial Dynamics. CBS",
type = "WorkingPaper",
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Learning Paths to Offshore Outsourcing : From Cost Reduction to Knowledge Seeking. / Maskell, Peter; Pedersen, Torben; Petersen, Bent; Dick-Nielsen, Jens.

Frederiksberg : DRUID - Danish Research Unit for Industrial Dynamics. CBS, 2005.

Research output: Working paperResearch

TY - UNPB

T1 - Learning Paths to Offshore Outsourcing

T2 - From Cost Reduction to Knowledge Seeking

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AU - Pedersen,Torben

AU - Petersen,Bent

AU - Dick-Nielsen,Jens

PY - 2005

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AB - A corporation’s offshore outsourcing may be seen as the result of a discrete, strategic decision taken in response to an increasing pressure from worldwide competition. However, empirical evidence of a representative cross-sector sample of international Danish firms indicates that offshore sourcing in low-cost countries is best described as a learning-by-doing process in which the offshore outsourcing of a corporation goes through a sequence of stages towards sourcing for innovation. Initially, a corporation’s outsourcing is driven by a desire for cost minimization. Over a period of time the outsourcing experience lessens the cognitive limitations of decision-makers as to the advantages that can be achieved through outsourcing in low-cost countries: the insourcer/vendor may not only offer cost advantages, but also quality improvement and innovation. The quality improvements that offshore outsourcing may bring about evoke a realization in the corporation that even innovative processes can be outsourced.

KW - Omkostninger

KW - Globalisering

KW - Innovation

KW - Internationaliseringsstrategi

KW - Internationalisering

KW - Outsourcing

KW - Offshore outsourcing

KW - Cost reduction

KW - Innovation

KW - Experiential learning

KW - Low-cost countries

M3 - Working paper

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BT - Learning Paths to Offshore Outsourcing

PB - DRUID - Danish Research Unit for Industrial Dynamics. CBS

CY - Frederiksberg

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