The Hidden Costs of Offshoring: The Impact of Complexity, Design Orientation, and Experience

Academy of Management Best Paper Proceedings, Forthcoming

10 Pages Posted: 27 Apr 2011  

Marcus M. Larsen

Copenhagen Business School - Department of Strategic Management and Globalization

Stephan Manning

University of Massachusetts at Boston - College of Management

Torben Pedersen

Copenhagen Business School - Department of Strategic Management and Globalization

Date Written: April 26, 2011

Abstract

This paper investigates hidden costs of offshoring, i.e. unexpected and often hard to measure costs resulting from the relocation of business tasks and activities outside the home country. Particularly, the paper shows that hidden costs can be explained by the degree of offshoring complexity. Firms’ organizational design orientation and offshoring experience negatively moderate the relationship between complexity and hidden costs.

Keywords: Offshoring, hidden costs, complexity theory, organizational design, global sourcing, organizational learning

JEL Classification: J23, J24, J44, J31, M51, M53, M54, L14, L21, L22, L24, L84, O14, R11, P45, P48, F59, F21, F22, F23

Suggested Citation

Larsen, Marcus M. and Manning, Stephan and Pedersen, Torben, The Hidden Costs of Offshoring: The Impact of Complexity, Design Orientation, and Experience (April 26, 2011). Academy of Management Best Paper Proceedings, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1823705

Marcus M. Larsen (Contact Author)

Copenhagen Business School - Department of Strategic Management and Globalization ( email )

Porcelænshaven 24
Frederiksberg, 2000
Denmark

Stephan Manning

University of Massachusetts at Boston - College of Management ( email )

100 Morrissey Blvd
Boston, MA 02125
United States

Torben Pedersen

Copenhagen Business School - Department of Strategic Management and Globalization ( email )

Porcelænshaven 24
Frederiksberg, 2000
Denmark
+45 3815 3030 (Phone)
+45 3815 3035 (Fax)

HOME PAGE: http://www.cbs.dk/staff/tp

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