AIB 2012 Conference Proceedings - Academy of International ...

TUESDAY
How Offshore Outsourcing Affects Costs and Value Creation: A Process Perspective on Knowledge-Intensive
Business Services
Kristin Martina Brandl, Copenhagen Business School
Michael J Mol, Warwick Business School
Although academic and public interest in service offshoring has increased in recent years, research remains
focused mainly on antecedents and benefits of activities, overlooking process aspects. For that reason, we take
a process perspective when conceptualizing around offshore outsourcing of knowledge-intensive business
services (KIBS) in this research. We characterize and dissect the production process of KIBS into five stages
(problem-finding & acquisition, problem-solving, choice, execution, monitoring & evaluation) and consequently
are able to analyze how offshore outsourcing differentially affects costs and value creation in the respective
stages. The reconceptualization enables us to provide a clearer and more fine-grained picture of the effects of
offshoring and outsourcing decisions, thus helping to further develop our understanding of the reasoning to
relocate services geographical and organizational. (For more information, please contact: Kristin Martina Brandl,
Copenhagen Business School, Denmark: kbr.int@cbs.dk)
Face to Face Communication, Business Travel and the Outsourcing of Services
Barry Scholnick, University of Alberta
Runjuan Liu, University of Alberta
Adam Finn, University of Alberta
This paper develops and tests new hypotheses concerning the impact of face-to-face communication on the
offshore outsourcing of services. We use the existing literature on face-to-face interactions to develop new
hypotheses for when face-to-face interactions will be most important for international service outsourcing. We
argue that face-to-face interactions will be greater for: (a) services with greater complexly, (b) interactions
involving individual's at higher levels within the organization, (c) interactions with individuals not from
diasporas, (d) interactions not involving trade shows, (e) interactions where the costs of travel relative to
electronic communication are relatively lower. We measure face-to-face interactions using data on international
business travel. We test our hypotheses by matching data from the Survey of International Air Travelers (SIAT)
conducted by the Office of Travel and Tourism Industries (OTTI) with data on the nominal dollar value of 11
types of services outsourced by US firms to 29 countries, provided by the US Bureau of Economic Analysis. Our
service-level measure of complexity uses job task and occupation level data from the US Occupation
Information Network (O*NET). In general our empirical results support our hypotheses. (For more information,
please contact: Barry Scholnick, University of Alberta, Canada: barry.scholnick@ualberta.ca)
Creating Value through Offshore Outsourcing: A Resource Management Perspective
Debmalya Mukherjee, University of Akron
In this paper we present an analytical framework explaining value creation through offshore outsourcing.
Specifically, we attempt to address the question: how do firms create value by outsourcing their business
functions to foreign external providers Given the growing prevalence of offshore outsourcing as a dominant
business practice in the world of global business, this question merits further research attention. We propose
that firms embarking on offshore outsourcing create value by effectively managing their internal and external
resources in the face of changing environment. The value creation framework discussed in this paper draws
from the ‘strategic resource management' and disintegration-location-specific resourcing- externalization (DLE)
perspectives. We discuss implications for theory and practice and offer recommendations for future research.
(For more information, please contact: Debmalya Mukherjee, University of Akron, USA: dmukher@uakron.edu)
AIB 2012 Conference Proceedings
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