Whether and What to Offshore?

Abstract

In this article, we explore the idea that offshoring of services and technical work should be regarded as a dynamic process that evolves over time. determinants play a role when firms first engage in offshoring, while rather different determinants matter for the subsequent process of offshoring of advanced activities. Although the model portrays a simplified expression of the offshoring process with two stages, the findings underpin our view that a process perspective on offshoring is a useful analytical framework.

R&D (Re)location and Offshore Outsourcing: A Management Perspective

“…This is unfortunate, since present-day small and medium-sized enterprises (SME) often provide R&D outsourcing services to MNC, and are proving more and more able to tap into the same global repositories of knowledge exploited by their bigger competitors (Squicciarini and Loikkanen 2008). This is confirmed by Jensen and Pedersen (2007), who find firm size not to be the main determinant of offshoring, since large firms offshore services and advanced activities, such as R&D, as much as small firms do. Similarly, the role of global R&D (Re)location 397 competitors from developing countries is also often overlooked -possibly because of the recent emergence of this phenomenon (von Zedtwitz 2006).…”

“…Subject to positive early experiences, companies will tend later to increase the number of activities and processes located offshore (Lewin and Peeters 2006). This progressive learning‐by‐doing process may lead firms to offshore and outsource a number of different core and non‐core functions 7 Jensen and Pedersen's (2007…”

“…These phenomena suggest that the strategic and organizational choices that firms make can change over time. Strategic decisions by their very nature are dynamic and are shaped by the changes that are occurring in the operational environment in which the firms are embedded, both local and global (Jensen and Pedersen 2007; Squicciarini and Loikkanen 2008).…”