The Strategic Nexus of Offshoring and Outsourcing Decisions

24 Pages Posted: 27 Oct 2010

See all articles by Ram Mudambi

Ram Mudambi

Temple University - Department of Strategic Management

Markus Venzin

Bocconi University - Department of Management and Technology

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Abstract

One important effect of the increasing integration of the world economy is the rising importance of possibilities to offshore and outsource value-creating activities. In many industries, firms are able to disaggregate their value chains into smaller parts. This process allows for a less path-dependent approach to the firm's ideal location profile (through offshoring and relocation) and control strategies (through outsourcing). This article argues that optimal decisions regarding individual processes recognize the linkages of these processes with the firm's entire value chain. The article explores the magnitude, sequence, and dynamics of interdependent decisions regarding the location and control of various parts of the value chain. By using case illustrations from the mobile handset and financial services industries, this article provides a novel perspective on the disintegration, mobility, and reintegration of value chain activities in a global context.

Suggested Citation

Mudambi, Ram and Venzin, Markus, The Strategic Nexus of Offshoring and Outsourcing Decisions. Journal of Management Studies, Vol. 47, No. 8, pp. 1510-1533, December 2010, Available at SSRN: https://ssrn.com/abstract=1698373 or http://dx.doi.org/10.1111/j.1467-6486.2010.00947.x

Ram Mudambi (Contact Author)

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States
215-204-2099 (Phone)
215-204-8029 (Fax)

HOME PAGE: http://sbm.temple.edu/~rmudambi/index.html

Markus Venzin

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

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