Offshore and Domestic Subsidiary R&D Sourcing: Its Antecedents and Innovation Outcomes

Production of services involves three key elements, an output for the client, resources of a provider and task execution. Offshoring of services acts as an exogenous shock to such a production system. Using multiple case methodology we investigate how task output, execution, and resources change as a consequence of offshoring and particularly how these elements are realigned. The cases reveal substantial managerial challenges in the alignment process prompted by a relocation of service task execution to an emerging economy. In particular, we find that instead of some set of capabilities that proactively orchestrates resources to suit the task at hand, the change in resources seems to be driving alterations as to how the tasks are executed, making them less discretionary and more routinized.