Learning Paths to Offshore Outsourcing - From Cost Reduction to Knowledge Seeking

Topics:
Contracts and SLAs,
Strategic Management Tools
Tags:
Business Operations,
Sourcing,
Purchasing & Procurement,
Outsourcing & Subcontracting,
Outsourcing,
Offshore Outsourcing,
Management,
Knowledge,
It Operations,
DRUID,
...
Source:
DRUID

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Overview: A corporation's offshore outsourcing may be seen as the result of a discrete, strategic decision taken in response to an increasing pressure from worldwide competition. However, empirical evidence of a representative cross-sector sample of international Danish firms indicates that offshore sourcing in low-cost countries is best described as a learning-by-doing process in which the offshore outsourcing of a corporation goes through a sequence of stages towards sourcing for innovation. Initially, a corporation's outsourcing is driven by a desire for cost minimization. Over a period of time the outsourcing experience lessens the cognitive limitations of decision-makers as to the advantages that can be achieved through outsourcing in low-cost countries: the insourcer/vendor may not only offer cost advantages, but also quality improvement and innovation.

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Format: PDF | Size: 112KB | Date: Nov 2005 | Pages: 24

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