Corporations today are operating in increasingly competing markets, facing strong pressures from stakeholders to operate more effectively and efficiently (Baloh et al., 2008). The competitive dynamics in large number of industries are changing too, making it difficult for firms to develop or sustain a competitive advantage. Competitive advantage refers to implementation of a value creating strategy not simultaneously implemented by any current or potential competitors while a Sustained Competitive advantage is when the other firms are unable to duplicate the benefits of the firm's value creating strategy (Barney, 1991).
Technological innovations are now enabling firms to organize business processes in an innovative way, enabling work across boundaries and around the clock, opening new avenues for firms to develop sustainable competitive advantages. Firms in variety of industries can now have their call centers, R&D centers, manufacturing facilities, etc in far off locations to exploit possible benefits of Offshoring such processes (Narula, 2004).
The term Outsourcing refers to subcontracting with independent firms, domestic or international; and Offshoring is generally used to refer to subcontracting of particular activities to foreign locations or suppliers, though not necessarily to independent firms (Howells, 2008). Outsourcing offshoring is hiring external organisation to do work in a country other than the one where product will be sold or consumed (Narula, 2004).
[...] Some of risks attached to outsourcing such as legislative new taxation imposition on US enterprises offshoring can't be optimized but majority of core bottlenecks such as lapse in 15 third party quality, negative customer perception, stability in emerging markets and interruption in service portfolio via movement and higher commitment towards outsourced location by companies such as Intuit Inc (i.e. shift from supplier to hybrid captive model on long-term model). Finally, cost savings risks could be minimized via enhanced outsourced volume and improving economies of scale and scope. The cultural difference will persist but with enhanced global exposure and mobility of population from agriculture centric country i.e. [...]
[...] Englewood Cliffs, NJ: Prentice-Hall. Teece, D. G. Pisano and A. Shuen. (1997) “Dynamic capabilities and strategic Management”, Strategic Management Journal 509-533. Wernerfelt, B. (1984), Resource-Based view of the Strategic Management Journal April June, pp. 171-180. Zatolyuk, S. [...]
[...] The 14-month old outsourcing arrangement 12 with Cognizant is the first time Intuit has outsourced product development. The number of staff at Cognizant working for Intuit will grow depending on the number of projects that come up (Datamonitor, 2010). At present Intuit just offshore customer support activities which are low end business processes. The company has started sourcing high end product development to Cognizant Technology Solutions and have even enhanced its work force in the new development facility. Although the enterprise has moved from non-core to core business processes outsourcing such as product development to India to achieve unique resource value propositions its majority of risks persist with respect to location i.e. [...]
[...] Communication and trust are more easily built when the partner is geographically close (Loch et al., 2006). Competence is a common prerequisite for all innovation outsourcing, but the nature of the key competence differs by source (Narula, 2004). For universities and start-ups, the key competences are new technology, breakthrough ideas, and general theory frameworks (Loch et al., 2006). However, the competence must be related to the project at hand. University partners are highly innovative and generally possess strong expertise (Doz, 1996). [...]
[...] T. (2006), “Managing the Unknown—A new approach to managing novel projects”, Wiley. Mata, F. J., Fuerst, W. L. & Barney, J. B. (1995), “Information technology and sustained competitive advantage: A resource-based analysis”, MIS Quarterly; Vol Issue p487, 19p 18 Melville, N., Kraemer, K. & Gurbaxani, V. Review: Information technology and organizational performance: an integrative model of it business value”, MIS Quarterly; Vol Issue p283 - 322, 40p Penrose, E.T. [...]
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