The Firm as a Coordination System: Evidence from Software Services Offshoring
45 Pages Posted: 11 Jan 2010 Last revised: 19 Aug 2014
Date Written: October 2, 2013
To examine what, if any, are the differences in how activities are coordinated within-firms vs. between-firms we conducted interviews with 32 project managers regarding 60 projects in the offshore software services industry. Uniquely, our projects were sampled along two dimensions: (1) co-location vs. spatial distribution and (2) were delivered by groups of individuals from a single firm vs. from multiple firms. Our evidence suggests that in co-located projects, the same broad categories of coordination mechanisms are used both within- and between-firms. However, there is a qualitative difference in how geographically (i.e. spatially) distributed projects are coordinated within- vs. between-firms. Distributed projects conducted within-firms rely extensively on tacit coordination mechanisms; such mechanisms are not readily available in between-firm projects that are spatially distributed. The difference may arise because of the lack of shared history and lack of enforcement through common authority in the between-firm context.
Keywords: Coordination, Common ground, Knowledge Based View, Firm Boundaries, Distributed Work
JEL Classification: L2, L22, M1, F23
Suggested Citation: Suggested Citation