Many firms have moved call centers and service operations to lower cost locations in other countries in an attempt to achieve their strategic goals of improving their cost structure or increasing their profitability (Bunyaratavej et al., 2007, Kedia and Lahiri, 2007, Miozzo and Grimshaw, 2008 and Tate et al., 2009). If the same service can be provided at lower labor costs, ceteris paribus, the firm should employ the less costly resource. Service outsourcing driven by cost-reduction motives does not necessarily involve the internationalization of business activities, but very often it does coincide with the internationalization of the firm (e.g., Massini & Miozzo, in press). Despite a continued trend towards internationalization of service firms, recent management research focusing on offshore call centers (OSCs) suggests that service firms may benefit in the long term if they resist earning short-term profits from offshoring, because those profits come at the expense of customer satisfaction and loyalty ( Stringfellow et al., 2008 and Whitaker et al., 2008). Both popular and academic press imply that consumers disapprove of OSCs on the grounds of fairness (i.e., they substantially undercut domestic call centers’ wages), ethics (e.g., lax labor laws), and service quality ( Musico, 2008, Stringfellow et al., 2008 and Thelen et al., 2009). The latter point is particularly common as an explanation of consumer resentment toward and dwindling acceptance of OSCs ( Hayward, 2004 and Raiborn et al., 2009), and reports of increased customer dissatisfaction levels with OSCs have led many firms to relocate centers closer to home. For example, in 2011, the computer backup firm Carbonite moved its customer service call center from India back to the United States, citing a desire to increase customer service levels ( Isidore, 2011).
Previous studies also show that customers evaluate OSCs less favorably than domestic call centers, regardless of whether they are aware (Roggeveen, Bharadwaj, & Hoyer, 2007) or unaware (Bharadwaj & Roggeveen, 2008) of which type of call center (domestic or offshore) they encountered. These findings appear to corroborate the notion that services delivered by OSCs are inferior to those delivered by domestic call centers. However, findings in relation to the reasons for customers’ varying perceptions of the services delivered by OSCs are equivocal. Some studies refer to customer attributions of poorer competence and skills (Bharadwaj and Roggeveen, 2008, Pontes and O’Brien Kelly, 2000 and Rafaeli et al., 2008), but others suggest that customers’ evaluations of OSCs are shaped less by actual service levels than by customers’ resentment toward offshore services in general (Kwak et al., 2006, Thelen et al., 2009 and Thelen et al., 2011). It appears that customer-related performance outcomes may relate as much to a call center agent's (CCA's) ability to help the customer achieve his or her goals as they do to the OSC's location. In a call center context, the ability to help the customer depends on the CCA's ability to communicate effectively and a willingness to respond to customer needs. However, no study has simultaneously examined the relationship of the CCA's accent and the call center location, together with the CCA's customer orientation (as perceived by the customer), to key performance outcomes.
In investigating these relationships, we draw on and extend previous research. For example, Bharadwaj and Roggeveen (2008) find that customers associate poorer communication skills with the CCA when the call center is located abroad versus domestically; we predict that customers are more likely to perceive an accent when interacting with a CCA based abroad than one based domestically. An accent likely coincides with generally poorer communication skills and therefore may relate negatively to customer-related performance outcomes for OSCs (Munro and Derwing, 1995 and Weil, 2003). In addition, customers calling customer service centers expect their issues to be addressed effectively (i.e., resolution on the first call) and courteously (Feinberg, Kim, Hokama, de Ruyter, & Keen, 2000). The agent behavior and action that is best suited to meet customer expectations (i.e., customer orientation) should therefore have more predictive power than the actual location of the call center or the agent's perceived accent. Although customer orientation, defined here as the extent to which employee behavior meets customer needs, drives customer outcomes (e.g., Hennig-Thurau, 2004 and Homburg et al., 2011) and has been studied in relation to CCAs (Dean, 2007), it remains largely absent from the literature on customer-related performance outcomes for OSCs. Dean (2007) investigates the effect of CCAs’ customer orientation on three downstream variables (perceived service quality, customer loyalty, and commitment) but does not distinguish between domestic and offshore CCAs. In investigating the relationships among CCA-related variables (i.e., accent and customer orientation), call center location, and the three performance outcomes, we thus attempt to close several research gaps.
Moreover, we apply insights from homophily and attribution theory when designing our study of customers exposed to OSCs. We demonstrate that customers are more likely to perceive foreign accents when interacting with OSCs compared with domestic call centers. However, unlike perceived customer orientation, call center location and an agent's accent are not related to the three performance outcomes. In addition to being theoretically interesting, this research thus is relevant for international managerial practice, because we investigate performance outcomes that can be linked easily to profitability (Guo, Kumar, & Jiraporn, 2004), and our findings offer guidance to firms considering where to locate front-office operations (i.e., sales and customer service).
