Session 378

Global Outsourcing & Offshoring: Implications for Multinational Decisions

Track G

Date: Tuesday, September 23, 2014


Time: 17:15 – 18:30


Room: Bruselas

Session Chair:

  • Lucia Piscitello, Polytechnic University of Milan

Title: A Simultaneous Study of Outsourcing and Location Choices: Implications for the Theory of the Firm


  • Michael Leiblein, Ohio State University
  • Marcus Møller Larsen, Copenhagen Business School
  • Torben Pedersen, Bocconi University

Abstract: This paper simultaneously evaluates factors affecting decisions regarding the organization and location of economic activity. The paper uses data from a comprehensive sample of exchanges involving public and private global semiconductor firms over the 1990 to 2005 time period. The paper accounts for the possibility that a similar set of factors may simultaneously affect organizational- and location-decisions. The findings indicate that these decisions are highly inter-dependent, that exchange- and locational-factors are associated with both organizational- and location-decisions, and suggest that organizational- and location-decisions are at least partially substitutable.

Title: Location Flexibility in Global Sourcing of Services: Resource Mobility, Resource Availability, and Task Standardization


  • Peter D. Ørberg Jensen, Copenhagen Business School
  • Stephan Manning, University of Massachusetts, Boston
  • Bent Petersen, Copenhagen Business School

Abstract: As a response to external changes and challenges, firms increasingly rely on location flexibility in their global sourcing of services. Location flexibility in sourcing is the ability to operate services from alternative locations to secure stable services supply for domestic or global operations at low cost and high quality under uncertain external environmental conditions. In this theoretical paper, we seek to elaborate the location dimension of flexibility in the context of global services sourcing, and thereby enrich our theoretical understanding of flexibility and the flexible firm. We discuss in particular three determinants of location flexibility in sourcing: resource mobility, resource availability and task standardization. We investigate these determinants from the perspectives of two archetypes of firms, respectively industry leaders and followers, and present nine propositions.

Title: Offshoring Strategy: How the Functional and Geographical Breadth of Offshoring Affect Firm Innovation


  • Oli Mihalache, Wilfrid Laurier University

Abstract: Despite the increasing prominence of offshoring, the understanding of how offshoring influences organizational innovativeness remains unclear. Our study advances this line of inquiry by proposing that the functional and geographical breadth offshoring influences organizational innovativeness. Additionally, this study investigates the contingent effects of organizational and managerial factors by considering the moderating roles of governance mode and strategic intent of offshoring. The empirical findings suggest that while the functional breadth of offshoring has a positive impact on innovativeness, the geographical breadth has a negative effect. Furthermore, our findings indicate that the strategic intent of offshoring moderates the effects of functional and geographical breadth of offshoring on firm innovativeness. Interestingly, the empirical results do not find a significant moderating role of the governance mode.

Title: Why do MNE Subsidiaries Outsource R&D in Countries with Weaker National IPR Regimes? The Role of Local Institutions


  • Grazia Santangelo, University of Catania
  • Klaus Meyer, China Europe International Business School
  • Björn Jindra, Copenhagen Business School

Abstract: MNE subsidiaries increasingly outsource R&D to local contractors in weaker IPR countries although R&D outsourcing exposes them to greater appropriability hazards, and internal protection mechanisms involving the entire MNE network may not be an option. Drawing on institutional and transaction costs economics, we argue that in weaker IPR countries the quality of subnational institutions plays a contractual hazard-mitigating role that positively influence the subsidiary decisions to rely more or less extensively on local external (versus internal) R&D partners (i.e. breadth of R&D outsourcing versus insourcing). However, subsidiaries that strategically prioritize external knowledge sourcing in their innovative activity commonly adopt a set of subsidiary-specific appropriability mechanisms that help protecting their knowledge and substitute for high quality subnational institutions.

All Sessions in Track G...

Sun: 08:00 – 09:15
Session 389: Managing the Multinational Organization in an Increasingly Complex World
Sun: 09:30 – 10:45
Session 221: Global Stakeholder Networks
Session 390: Local Determinants of Competitive Advantage and Disadvantage
Sun: 11:15 – 12:30
Session 2: Offshore Outsourcing, Dynamic Capabilities, and the Changing Nature of Firm Boundaries
Sun: 15:45 – 17:00
Session 270: Innovation in MNCs and Global Networks
Session 371: Inter and Intra Organizational Learning Across Borders: A Knowledge Management Perspective
Session 380: Small, Young and Entrepreneurial Firms: A Unique Perspective in Globalization
Sun: 17:15 – 18:30
Session 603: Global Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 335: Internationalization and Strategic Decisions
Session 379: Emerging Markets: Understanding the Importance of Context
Mon: 11:00 – 12:15
Session 372: The Challenges of Global Operations: Managing R&D and Complexity
Session 373: Global Diversification: Governance and Performance Implications
Mon: 14:45 – 16:00
Session 375: Changing External Environments: How do Multinationals Respond?
Session 381: Firm boundaries in Multinational Organizations: Antecedents and Consequences
Session 414: Global Networks and Business Groups
Mon: 16:30 – 17:45
Session 226: Culture, Norms and Institutions: The contextual influences on Entrepreneurship
Session 374: Antecedents and Consequences of Multinational Location Decisions
Session 382: Drivers of Multinational Performance:What, Where and When?
Tue: 08:00 – 09:15
Session 383: Globalization of R&D: Implications for Learning and Innovation
Tue: 11:00 – 12:15
Session 376: Headquarters Subsidiary Relationship: New Approaches to an Old Question
Session 384: Multinational Location Decisions: New Approaches Across Different Perspective
Tue: 15:30 – 16:45
Session 263: Innovation Models in Emerging Economies
Session 377: Organizing Assets Across Borders: Drivers and Consequences
Session 385: Multinational firms and the External Environment: The Role of Institutions
Tue: 17:15 – 18:30
Session 378: Global Outsourcing & Offshoring: Implications for Multinational Decisions

Strategic Management Society