Living with Offshoring: The Impact of Offshoring on the Evolution of Organizational Configurations

Journal of World Business. Vol. 46, No. 3, pp. 346-358, July 2011

Posted: 10 Jun 2011

See all articles by Joseph Lampel

Joseph Lampel

Alliance Manchester Business School

A. Bhalla

Cass Business School, City, University of London; affiliation not provided to SSRN

Date Written: 2011

Abstract

This paper argues that while in principle offshoring allows firms to pursue greater flexibility at lower costs, in practice it presents firms with major structural and managerial challenges. Adopting the activity configuration perspective, we argue that offshoring often disrupts the development of an internally consistent and cohesive activity configuration. Using a longitudinal case study of Tiscali, a European telecommunications firm, we argue that offshoring creates a tension between the advantages managers derive from using this as a strategy to improve the competitive position of the firm, and the negative impact this may have on the cohesion and consistency of internal organizational activity configuration. This tension tends to rise as organizations move from low to high value-creating activities, and struggle to resolve the conflict between trying to offshore interlocking value-creating activities while at the same time maintaining the cohesion and consistency of their internal configuration.

Keywords: IT Outsourcing, Offshoring, Organization Configurations, Activity Interdependence, Strategic Decision Making

Suggested Citation

Lampel, Joseph and Bhalla, Ajay and Bhalla, Ajay, Living with Offshoring: The Impact of Offshoring on the Evolution of Organizational Configurations (2011). Journal of World Business. Vol. 46, No. 3, pp. 346-358, July 2011, Available at SSRN: https://ssrn.com/abstract=1862119

Joseph Lampel (Contact Author)

Alliance Manchester Business School ( email )

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room 9.21
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HOME PAGE: http://www.manchester.ac.uk/research/joseph.lampel/furtherinformation

Ajay Bhalla

Cass Business School, City, University of London ( email )

106 Bunhill Row
London, London EC1Y 8TZ
United Kingdom

affiliation not provided to SSRN

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