The Firm as a Coordination System: Evidence from Software Services Offshoring

45 Pages Posted: 11 Jan 2010 Last revised: 19 Aug 2014

See all articles by Kannan Srikanth

Kannan Srikanth

Singapore Management University - Management Department; University of Southern Denmark - Strategic Organization Design unit (SOD)

Phanish Puranam

INSEAD

Date Written: October 2, 2013

Abstract

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

Srikanth, Kannan and Puranam, Phanish, The Firm as a Coordination System: Evidence from Software Services Offshoring (October 2, 2013). INSEAD Working Paper No. 2013/106/STR. Available at SSRN: https://ssrn.com/abstract=1534632 or http://dx.doi.org/10.2139/ssrn.1534632

Kannan Srikanth (Contact Author)

Singapore Management University - Management Department ( email )

50 Stamford Rd
Singapore, 178899
Singapore

University of Southern Denmark - Strategic Organization Design unit (SOD) ( email )

Campusvej 55
Odense, DK-5230 M
Denmark

Phanish Puranam

INSEAD ( email )

1 Ayer Rajah Avenue
Singapore, 138676
Singapore

HOME PAGE: http://www.insead.edu/facultyresearch/faculty/profiles/ppuranam/

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