تاثیر توانایی مدیریت بر ارتباط منابع کارآمد: بررسی ارائه دهندگان برون سپاری هند
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|13162||2012||11 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of World Business, Volume 47, Issue 1, January 2012, Pages 145–155
The increase in offshore outsourcing of information technology-enabled business processes has renewed scholarly attention to better understand the dynamics of service provider firms. In this study, we examine how offshore outsourcing service providers’ internal and relational resources and capabilities jointly predict their economic performance. Analysis of data collected from a sample of 105 Indian service providers suggest that rent generation from firm-specific, idiosyncratic resources is positively moderated by the level of management capability possessed by such firms. Theoretical and managerial implications of the findings are discussed and avenues of future research are offered.
Offshore outsourcing occurs when firms hand over their value chain activities to foreign, independent service providers (Bunyaratavej et al., 2008 and Doh, 2005). Research delving into the intricacies of this phenomenon stress that offshore service providers are important ally in the value creation mechanism (Kedia and Mukherjee, 2009 and Zaheer et al., 2009) and that success of offshore outsourcing is largely contingent on their performance. Very little attention, however, has been accorded to understand the context of offshore service providers (Lahiri and Kedia, 2009 and Zaheer et al., 2009). In particular, research focusing on their internal assets and overall performance has remained inadequate so far. In this paper, we attempt to examine the empirical linkages among provider firm-specific resources, capabilities, and performance, and shed light on the competitive dynamics of Indian offshoring service providers. Resource-based view (RBV) of the firm suggests that ability to attain higher performance is determined by the nature of strategic resources possessed and utilized by firms (Barney, 1991 and Wernerfelt, 1984). Extending this view to the current context suggests that performance of offshore outsourcing provider firms should be a function of various strategic resources that are possessed and deployed by these firms. Indeed, several firm-specific resources, such as human capital, organizational capital, client-provider partnership quality etc., have been highlighted in the literature as crucial determinants of provider firm performance (Feeny et al., 2005 and Lahiri and Kedia, 2009). These resources, in addition to being possessed, need to be strategically deployed and leveraged (Sirmon et al., 2008 and Sirmon and Hitt, 2003) by firms in order to generate superior performance and competitive advantage. More specifically, while a provider firm's idiosyncratic resources and innovative knowledge assets may contribute to its performance (He & Wang, 2009), such resources must be managed and deployed effectively to realize competitive advantage. International business (IB) and strategic management scholars have called for studies that identify firm-level capabilities needed to effectively manage various organizational resources (Manning et al., 2008 and Sirmon et al., 2007). In responding to such calls, this study intends to fill an important research void by exploring the moderating influences of management capability on the degree to which firm-specific resources are able to contribute to firm performance. We propose that improving provider performance through rent generating resources requires an emphasis on management capability, defined as the ability to assemble, integrate, and deploy various firm-specific resources, in particular human, organizational and relational, to fulfill diverse client-related business requirements ( Lahiri & Kedia, 2009). We studied 105 Indian business process offshoring (BPO) service provider firms to examine our central research question. Empirically, we showed that performance effects of two firm-level resources (human capital and organizational capital), and one relational resource (partnership quality) improve in the presence of a firm level capability (management capability). The Indian BPO industry presented a perfect setting for our investigation for several compelling reasons. First, India remains the top choice among various offshoring destinations for western client firms (Luo et al., 2010 and Zaheer et al., 2009). Findings from this setting are thus likely to have crucial impact on the offshore outsourcing clients and providers from other emerging countries. Second, Indian BPO industry has evolved from low-value added services (e.g., call centers) to high-value added knowledge-based services. This helps to examine the research question across a broad range of high-value business processes. Finally, as one of the world's largest and most dynamic economies, India-based studies add value to our overall understanding of the global business environment (Lahiri, in press and Malik and Kotabe, 2009). This analysis contributes to the growing body of offshore outsourcing literature and focus attention on the relatively under-explored Indian BPO industry that caters to more than 35% of the global BPO market and has been growing at the rate of more than 35% per annum for the last several years (Nasscom-Everest Study, 2008). Our empirical analysis of the providers’ context and the resultant findings generate important theoretical and practical insights that add to the scholarship that focuses on the performance implications of valuable firm assets. We also contribute by enhancing the applicability of RBV in a new industry and its participating firms. Furthermore, we respond to calls in the resource-based literature to illuminate how organizational capabilities may moderate the resource attributes to generate improved performance (Priem and Butler, 2001 and Sirmon et al., 2008) for offshore outsourcing providers. Finally, by focusing on offshore service providers we enrich the IB literature since performance dynamics of these emerging market firms may determine the viability of offshore outsourcing of IT-enabled business processes as a strategic tool. Indirectly, our analysis also sheds light on the central question in IB—what determines the international success and failure of (offshore outsourcing client) firms? (Peng, 2004).
نتیجه گیری انگلیسی
In this study we have enhanced understanding of offshore outsourcing as a growing organizational strategy by focusing on provider firms that execute business processes for their global clients. Drawing on the theoretical underpinnings of RBV, we addressed how management capability of providers impact resource–performance relationships. Results indicated that three intangible resources – human capital, organizational capital, and partnership quality – influence firm performance positively and significantly. But more importantly, our findings suggested that management capability positively moderates the relationships between these intangible resources and firm performance. That is, while high management capability resulted in strong resource–performance relationships, low management capability was found to result in relatively weaker associations. These findings are in line with previous research on the moderating effects of organizational capabilities on resources-performance linkage (e.g., Eddleston et al., 2008 and Kotabe et al., 2002). The findings also resonate with prior research relating to the contribution of human, organizational, and relational capital on organizational performance (Lee and Kim, 1999, Reed et al., 2006 and Subramanium and Youndt, 2005). 6.1. Research implications The primary theoretical contribution of this study lies in investigating the joint effect of management capability and valuable, intangible firm resources in determining firm performance. Given that (a) resources and capabilities are distinct constructs, and (b) there exists only a handful published articles that have empirically tested their separate and combined effects in the same model (Lu, Zhou, Bruton & Li, 2010), our results emphasize the importance of management capability as an important organizational capability in jointly predicting firm performance. The positive moderating impact of management capability suggests that providers possessing higher management capability will be able to better utilize their human, organizational, and relational capital towards economic performance vis-à-vis those that do not possess or are unable to utilize such capability. The overall strongest interaction effect of management capability with organizational capital suggests that institutionalized organizational knowledge, norms, culture, and infrastructure can be best utilized in the presence of higher management capability. In other words, tacitness and idiosyncrasy of organizational capital can create more value if firms are able to manage such path-dependent resources efficiently and effectively. Further, the complementary effect of human capital and management capability on firm performance suggests that not only is quality of employees important, but how they are managed and deployed equally matter, if not more, in achieving desired performance levels. This observation of ours has been a recurrent theme in most organizational research involving human talent (Hatch & Dyer, 2004) and adds to the growing body of literature concerning management of global talent (Scullion et al., 2008 and Tymon et al., 2009). Particularly, it suggests that in a dynamic and uncertain industry characterized by employee retention challenges (Bhatnagar, 2007), firms need to invest in developing in-house resource management capability to reap the benefits of innovative knowledge assets such as human capital. In addition, the significant impact of human capital on provider performance also reaffirms the basic, underlying logic in offshore outsourcing—ability to harness human talent embodied in knowledge, experience and expertise in provider firms operating in low-cost destinations like India (Kedia and Mukherjee, 2009 and Lahiri and Kedia, in press). The second theoretical contribution of this study lies in extending knowledge on offshore outsourcing of high-value activities and processes—a research stream that is increasingly meriting deep scholarly attention from significant number of strategic management and international business researchers (Demirbag and Glaister, 2010 and Mudambi and Tallman, 2010). Our RBV-based literature review followed by analysis of firm-level primary data has yielded interesting results enabling greater understanding of the offshore outsourcing phenomenon. The positive joint influence of internal assets in predicting firm performance in the context of BPO represent interesting and timely findings, and significantly adds to the offshore outsourcing literature. Relatedly, our focus on the providers contributes to the growing research stream by investigating the context of suppliers as opposed to the buyers (clients). Most of the published outsourcing research has focused on the clients and have overlooked the providers (Lahiri & Kedia, 2009). Third, this study, by investigating the context of Indian providers, contributes to the research on emerging economies. In recent years scholars have increasingly sought to understand and predict the behavior of emerging economy firms and their performance attributes (Luo & Tung, 2007). Our study sheds new light in this area by examining a relatively under-examined and growing industry in one of the fastest growing emerging economies. 6.2. Managerial relevance In addition to offering crucial research implications, this study generates several managerial implications. The direct and moderating effects valuable firm assets on performance suggests that executives of provider firms need to consistently (a) focus on and replenish their repository of human capital, organizational capital and partnership quality, and (b) develop and sustain strong capability to exploit various rent-generating assets. While management capability, as compared to other resources, may not contribute towards significant performance gains, it can certainly impact the manner how intangible resources are utilized as provider firms continue to serve their clients and strive to attain preset performance parameters. Earlier studies have highlighted that Indian BPO providers manage high manpower attrition rates and their human resource management practices are very structured, formal and bureaucratic (Budhwar et al., 2006 and Zaheer et al., 2009). In addition, increasing competition have been emanating from other markets (e.g., Philippines, Eastern Europe, Latin America, and China) that are gearing to provide similar services as their Indian counterparts. Therefore, two key concerns that executives need to address are (a) how to best utilize and manage existing asset base, and (b) what resource-capability configuration would provide sustained above-average returns as the industry matures and interfirm rivalry increases. In this regard the dynamic capability approach referred to in our earlier discussion holds significance for the managers. In the face of fast changing external business environment they need to constantly invest in the generation, development, retention and reconfiguration of valuable resources and capabilities by learning from past and current partnerships with their clients. Indian providers need to constantly acquire, generate, nurture, upgrade, deploy and retain their valuable intangible resources, both internal and relational, in order to attain superior rent generation. They need to cater greater attention to the development and utilization of organizational capital as its interaction effect with management capability emerged as the strongest. Detailed documentation of project reports and distribution of such information across levels of management and departments would help in this regard. Focusing on the correct recruitment techniques, hiring industry-ready manpower and providing suitable industry- and client-specific training can improve the human capital pool. In addition, industry leaders need to collectively address the issue of employee turnover and train entry level project personnel to gradually develop into motivated middle-level managers (Raman, Budhwar, & Balasubramanian, 2007). Further, development of routines that facilitate utilization of intangible resources for diverse client demands can enhance management capability within the firm. Finally, managers need to continuously emphasize to all categories of employees, in particular organizational boundary spanners, the significance of remaining focused on strong partnerships with the clients and fulfilling their expectations in the best possible manner. Few implications for the offshore outsourcing clients can be thought of as well. Prior to engaging in business relationship with providers as well as during currency of contracts, clients need to thoroughly assess the quality of resources (both internal and relational) available with the providers. In particular, they should adequately acquaint themselves with the available quality of human talent pool (with regard to domain- and industry knowledge, relevant experience and skills), and organizational culture, norms and value systems available with the providers. In addition, reputation of providers in being (a) willing to foster strong partnerships based on trust, compatibility and joint problem solving and (b) flexible to absorb and sustain contractual modifications and/or deviations should also be verified. Clients, in the interest of mutual value creation, should provide all forms of assistance to their providers so that the latter may continue to perform well and remain enduring and trusted business partners (Dyer & Singh, 1998). In particular, clients need to ensure efficient transition of their business processes, continuous provision of relevant feedback, efficient transfer of partnership knowledge and consistent development of trust and comfort feeling such that their providers remain motivated to go the extra mile in fulfilling various offshoring needs and co-evolve as valuable alliance partners ( Lahiri and Kedia, 2009 and Lahiri and Kedia, in press).