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.
|Place of Publication||Frederiksberg|
|Publisher||DRUID - Danish Research Unit for Industrial Dynamics|
|Number of pages||22|
|Publication status||Published - 2005|
- Offshore outsourcing
- Cost reduction
- Experiential learning
- Low-cost countries
Maskell, P., Pedersen, T., Petersen, B., & Dick-Nielsen, J. (2005). Learning Paths to Offshore Outsourcing: From Cost Reduction to Knowledge Seeking. Frederiksberg: DRUID - Danish Research Unit for Industrial Dynamics.