Not Yet Modern? Longitudinal Organizing Capabilities of Offshoring Enterprises [chapter]

Christian Koch, Claus Jørgensen
2018 Positive and Negative Aspects of Outsourcing  
While offshoring is well covered in literature, its organizational aspect and long-term development are not known. This chapter seeks to remedy this. Reviewing longitudinal offshoring studies discloses diverging findings. A range of activities has been offshored. The framework for organizing capabilities includes functions, tools, management/ leadership and boundary spanners. A four-phase linear model of long-term offshoring is proposed, encompassing transfer, resource searches, transformation
more » ... es, transformation and development. Four case studies of offshoring organization were made: one longitudinal process is described. Their development paths differ, they do not go beyond transformation; two revert to backshoring; three do captive arrangements. Two employ project organization. They do not follow a modern pattern of linear progression. Against this background, the aim of this chapter is threefold: • to develop a concept for organizing capabilities in emerging long-term offshoring setups. • to assess existing literature, including empirical findings of long-term offshoring and their organization. • to describe and analyze organizing capabilities in four cases of mature offshoring outsourcing setups, focusing on more recent developments. Offshoring organization is therefore viewed as a process. Pettigrew [3] makes the case for processual longitudinal studies, claiming and demonstrating that they better account for organizational journeys of advance, success, retreat, barriers and missed opportunities. They avoid the ex-post rationalization of snapshot studies, where enterprise players (perhaps unwittingly) arrange their narratives according to success and failure, heroes and scapegoats [3]. Our case enterprises have limited resources; they are family-owned, with a family member as CEO. They cannot be understood simply as SMEs, but in two cases, central elements are legally SMEs (less than 250 employees) combined with contracts, strategic partnering and other arrangements. The other two cases are among the 500-1000 largest companies in Denmark. The companies have long been engaged in offshoring, enabling study of longer term organizing capabilities. Our focus, however, is on a more recent period (2007)(2008)(2009)(2010)(2011)(2012). The theoretical frame is multidisciplinary, combining enterprise internal and external theories [1, 4, 5] but with a basis in the resource-based and knowledge-based views of the firm (RBV and KBV [6, 7]). Capability is here viewed as the ability to perform actions. Teece et al. [8] try to understand how enterprises develop and sustain competitive advantage and suggest that this ability can be thought of as dynamic capabilities. This idea has been criticized [9], but we argue that in the context of conceptualizing organizational capabilities in long-term emergent (often rapidly changing) offshoring companies, it makes sense to think of these capabilities as dynamic (see also [10] ). Organizational capabilities consist of two main components: relational capabilities [5] and knowledge-handling capabilities. Knowledge is important here, but the ability to execute is equally important. Therefore, ability to integrate knowledge and govern knowledge processes and interactions are of particular importance. This chapter contributes by assessing the existing literature's longitudinal studies of offshoring presenting a concept of organizing capabilities that merges relational and knowledgehandling capabilities. It presents one case description among four cases of offshoring manufacturing companies analyzed in a long-term perspective, including organizing capabilities. The literature review is also a contribution in itself, as other recent reviews [5, 11] do not cover long-term development (Hätönen and Ericsson [2] is an important exception). The chapter is structured as follows: first, a section describing the literature review method, the cases and the empirical method employed; then, the literature review and the conceptualization of organizing capabilities is developed. The empirical section describes one longitudinal case, followed by an analytical discussion and comparison of the four cases. The chapter ends with a conclusion. Positive and Negative Aspects of Outsourcing 18 Not Yet Modern? Longitudinal Organizing Capabilities of Offshoring Enterprises
doi:10.5772/intechopen.72884 fatcat:r6pwalvb25ggdny64qcxqfpjwm