The Hidden Costs of Offshoring: The Impact of Complexity, Design Orientation and Experience

    Research output: Chapter in Book/Report/Conference proceedingConference abstract in proceedingsResearchpeer-review

    Abstract

    This study seeks to explain hidden costs of offshoring, i.e. unexpected costs resulting from the relocation of business tasks and activities outside the home country. We develop a model that highlights the role of complexity, design orientation and experience in explaining hidden costs of offshoring. Specifically, we propose that hidden costs can be explained by the combination of increasing structural, operational and social complexity of offshoring activities. In addition, we suggest that firm orientation towards organizational design as part of an offshoring strategy and offshoring experience moderate the relationship between complexity and hidden costs negatively i.e. reduces the cost generating impact of complexity. We develop three hypotheses
    and test them on comprehensive data from the Offshoring Research Network (ORN). In general, we find support for our hypotheses. A key result of our study is to suggest how hidden costs of offshoring can be mitigated through an explicit orientation towards improving organizational processes and structures as well as experience with offshoring.
    This study seeks to explain hidden costs of offshoring, i.e. unexpected costs resulting from the relocation of business tasks and activities outside the home country. We develop a model that highlights the role of complexity, design orientation and experience in explaining hidden costs of offshoring. Specifically, we propose that hidden costs can be explained by the combination of increasing structural, operational and social complexity of offshoring activities. In addition, we suggest that firm orientation towards organizational design as part of an offshoring strategy and offshoring experience moderate the relationship between complexity and hidden costs negatively i.e. reduces the cost generating impact of complexity. We develop three hypotheses
    and test them on comprehensive data from the Offshoring Research Network (ORN). In general, we find support for our hypotheses. A key result of our study is to suggest how hidden costs of offshoring can be mitigated through an explicit orientation towards improving organizational processes and structures as well as experience with offshoring.
    LanguageEnglish
    Title of host publicationProceedings of the 53rd Annual Meeting of the Academy of International Business
    EditorsShige Makingo , Tunga Kiyak
    Place of PublicationEast Lansing, MI
    PublisherAcademy of International Business
    Date2011
    Pages155-156
    StatePublished - 2011
    EventAIB 2011 Annual Meeting: International Business for Sustainable World Development - Nagoya, Japan
    Duration: 24 Jun 201128 Jun 2011
    Conference number: 53
    http://aib.msu.edu/events/2011/

    Conference

    ConferenceAIB 2011 Annual Meeting
    Number53
    CountryJapan
    CityNagoya
    Period24/06/201128/06/2011
    Internet address
    SeriesAcademy of International Business. Annual Meeting. Proceedings
    Volume53
    ISSN2078-4430

    Cite this

    Møller Larsen, M., Manning, S., & Pedersen, T. (2011). The Hidden Costs of Offshoring: The Impact of Complexity, Design Orientation and Experience. In S. Makingo , & T. Kiyak (Eds.), Proceedings of the 53rd Annual Meeting of the Academy of International Business (pp. 155-156). East Lansing, MI: Academy of International Business. Academy of International Business. Annual Meeting. Proceedings, Vol.. 53
    Møller Larsen, Marcus ; Manning, Stephan ; Pedersen, Torben. / The Hidden Costs of Offshoring : The Impact of Complexity, Design Orientation and Experience. Proceedings of the 53rd Annual Meeting of the Academy of International Business. editor / Shige Makingo ; Tunga Kiyak. East Lansing, MI : Academy of International Business, 2011. pp. 155-156 (Academy of International Business. Annual Meeting. Proceedings, ???volume??? 53).
    @inbook{adb8d4e9b1d040ff9b27cbfb4331cd0b,
    title = "The Hidden Costs of Offshoring: The Impact of Complexity, Design Orientation and Experience",
    abstract = "This study seeks to explain hidden costs of offshoring, i.e. unexpected costs resulting from the relocation of business tasks and activities outside the home country. We develop a model that highlights the role of complexity, design orientation and experience in explaining hidden costs of offshoring. Specifically, we propose that hidden costs can be explained by the combination of increasing structural, operational and social complexity of offshoring activities. In addition, we suggest that firm orientation towards organizational design as part of an offshoring strategy and offshoring experience moderate the relationship between complexity and hidden costs negatively i.e. reduces the cost generating impact of complexity. We develop three hypothesesand test them on comprehensive data from the Offshoring Research Network (ORN). In general, we find support for our hypotheses. A key result of our study is to suggest how hidden costs of offshoring can be mitigated through an explicit orientation towards improving organizational processes and structures as well as experience with offshoring.",
    author = "{M{\o}ller Larsen}, Marcus and Stephan Manning and Torben Pedersen",
    year = "2011",
    language = "English",
    pages = "155--156",
    editor = "{Makingo }, {Shige } and Kiyak, {Tunga }",
    booktitle = "Proceedings of the 53rd Annual Meeting of the Academy of International Business",
    publisher = "Academy of International Business",

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    Møller Larsen, M, Manning, S & Pedersen, T 2011, The Hidden Costs of Offshoring: The Impact of Complexity, Design Orientation and Experience. in S Makingo & T Kiyak (eds), Proceedings of the 53rd Annual Meeting of the Academy of International Business. Academy of International Business, East Lansing, MI, Academy of International Business. Annual Meeting. Proceedings, vol. 53, pp. 155-156, Nagoya, Japan, 24/06/2011.

    The Hidden Costs of Offshoring : The Impact of Complexity, Design Orientation and Experience. / Møller Larsen, Marcus; Manning, Stephan ; Pedersen, Torben.

    Proceedings of the 53rd Annual Meeting of the Academy of International Business. ed. / Shige Makingo ; Tunga Kiyak. East Lansing, MI : Academy of International Business, 2011. p. 155-156.

    Research output: Chapter in Book/Report/Conference proceedingConference abstract in proceedingsResearchpeer-review

    TY - ABST

    T1 - The Hidden Costs of Offshoring

    T2 - The Impact of Complexity, Design Orientation and Experience

    AU - Møller Larsen,Marcus

    AU - Manning,Stephan

    AU - Pedersen,Torben

    PY - 2011

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    N2 - This study seeks to explain hidden costs of offshoring, i.e. unexpected costs resulting from the relocation of business tasks and activities outside the home country. We develop a model that highlights the role of complexity, design orientation and experience in explaining hidden costs of offshoring. Specifically, we propose that hidden costs can be explained by the combination of increasing structural, operational and social complexity of offshoring activities. In addition, we suggest that firm orientation towards organizational design as part of an offshoring strategy and offshoring experience moderate the relationship between complexity and hidden costs negatively i.e. reduces the cost generating impact of complexity. We develop three hypothesesand test them on comprehensive data from the Offshoring Research Network (ORN). In general, we find support for our hypotheses. A key result of our study is to suggest how hidden costs of offshoring can be mitigated through an explicit orientation towards improving organizational processes and structures as well as experience with offshoring.

    AB - This study seeks to explain hidden costs of offshoring, i.e. unexpected costs resulting from the relocation of business tasks and activities outside the home country. We develop a model that highlights the role of complexity, design orientation and experience in explaining hidden costs of offshoring. Specifically, we propose that hidden costs can be explained by the combination of increasing structural, operational and social complexity of offshoring activities. In addition, we suggest that firm orientation towards organizational design as part of an offshoring strategy and offshoring experience moderate the relationship between complexity and hidden costs negatively i.e. reduces the cost generating impact of complexity. We develop three hypothesesand test them on comprehensive data from the Offshoring Research Network (ORN). In general, we find support for our hypotheses. A key result of our study is to suggest how hidden costs of offshoring can be mitigated through an explicit orientation towards improving organizational processes and structures as well as experience with offshoring.

    M3 - Conference abstract in proceedings

    SP - 155

    EP - 156

    BT - Proceedings of the 53rd Annual Meeting of the Academy of International Business

    PB - Academy of International Business

    CY - East Lansing, MI

    ER -

    Møller Larsen M, Manning S, Pedersen T. The Hidden Costs of Offshoring: The Impact of Complexity, Design Orientation and Experience. In Makingo S, Kiyak T, editors, Proceedings of the 53rd Annual Meeting of the Academy of International Business. East Lansing, MI: Academy of International Business. 2011. p. 155-156. (Academy of International Business. Annual Meeting. Proceedings, Vol. 53).