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Managing offshoring of complex products: Strategy and capabilities
Mälardalen University, School of Innovation, Design and Engineering. Mälardalen University, School of Innovation, Design and Engineering, Innovation and Product Realisation. (Innovationsledning)ORCID iD: 0000-0003-4077-6949
2014 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Offshoring is a hot topic in the industrial and academic community over the last few years, evolving from a focus on manufacturing to product development and R&D. Offshoring refers to the process of sourcing and coordinating tasks across national borders and can include both in-house and outsourced activities performed by a supplier. There is a lot of research guiding the decision of what, where and how to offshore, but research on how to implement offshoring strategies is rare. The purpose of this dissertation is to contribute to the knowledge on how companies deal with offshoring in practice, relating to strategy, planning and routines. It discusses what type of capabilities that is needed to gain the benefits of offshoring implementations.

The research builds on case studies from two multinational companies offshoring product development from Sweden to captive and offshore development centres in India and China through a series of interviews, review of business documentation and other types of active engagements over time.

This research highlights how the development and implementation of offshoring can be better understood by focusing on the middle management in the organization and how they relate to the top management directives when implementing an offshoring strategy.  The thesis contributes to existing theory by explaining offshoring as a process, situated in a certain context and time. It defines key routines and capabilities needed to facilitate offshoring of complex product systems. Including context, timing and sequence when analysing offshoring help explain why some organizations fail to implement offshoring initiatives.

The companies had an iterative learning process to deal with offshoring, and inclusion of all levels in an organization was highlighted as a key success factor for the implementation of offshoring. The results extend current understanding of offshoring of complex products to Asia and provide useful guidelines for managers on the key issues they need to consider. 

Place, publisher, year, edition, pages
Västerås: Mälardalen University , 2014.
Series
Mälardalen University Press Dissertations, ISSN 1651-4238 ; 152
Keyword [en]
Strategy, organizational capabilities, offshoring, product development, India, China
National Category
Engineering and Technology
Research subject
Innovation and Design
Identifiers
URN: urn:nbn:se:mdh:diva-24504ISBN: 978-91-7485-136-6 (print)OAI: oai:DiVA.org:mdh-24504DiVA: diva2:697553
Public defence
2014-04-04, Raspen, Smedjegatan 37, Eskilstuna, 13:00 (English)
Opponent
Supervisors
Projects
Effective outsourcing/offshoring of research, development and engineering
Funder
Knowledge Foundation
Available from: 2014-02-18 Created: 2014-02-18 Last updated: 2014-03-21Bibliographically approved
List of papers
1. Managing offshore development: a cultural perspective
Open this publication in new window or tab >>Managing offshore development: a cultural perspective
2012 (English)In: Series on technology management - Vol. 18: Perspectives on supplier innovation: theories, concepts and empirical insights on open innovation and the integration of suppliers / [ed] Alexander Brem & Joe Tidd, United States: Imperial College Press , 2012, 549-580 p.Chapter in book (Other academic)
Place, publisher, year, edition, pages
United States: Imperial College Press, 2012
National Category
Engineering and Technology
Identifiers
urn:nbn:se:mdh:diva-22893 (URN)13978-1-84816-899-2 (ISBN)
Available from: 2013-11-20 Created: 2013-11-19 Last updated: 2014-02-18Bibliographically approved
2. Understanding Organizational Capabilities for Effective Offshoring
Open this publication in new window or tab >>Understanding Organizational Capabilities for Effective Offshoring
2011 (English)In: Proceedings of the 1st International Technology Management Conference, ITMC 2011, 2011Conference paper, Published paper (Refereed)
Abstract [en]

In the current competitive environment, the question is no longer whether or not to go offshore, but in determining what should be offshored and how it should be offshored, while keeping the value proposition for the organization as a whole coherent. The decision to offshore work to locations such as India and China may often be initially driven by the need to leverage the cost differentials when compared to western sites, but evolve to focus on other key value levers such as access to talent and time to market. Given that globalization of product development projects is an organizational reality today, in order to remain competitive, organizations have to develop capabilities to successfully transition to this new way of working. Despite the prevalence of offshoring in large multi-nationals, there is limited understanding of the dynamics of standing up new sites. In this paper, we focus on identifying some of the key capabilities that organizations need to effectively offshore work, through a case study of the transfer of a product from the European site of large-multinational called Eurosoft to one of their Chinese sites. Starting with their strategic decision to offshore the development of the product, we study the critical actions undertaken as part of the transfer process and illustrate four types of organizational capabilities- technology (ability to understand and execute the project); process & tools (ways of working both within the organization and with clients); relationship management (ability to govern at both the project-level and at the relationship level); and knowledge management (ability to grow human capital, institutionalize best practices, and codify learning).

Keyword
Organizational capabilities, offshoring, product development
National Category
Engineering and Technology
Research subject
Innovation and Design
Identifiers
urn:nbn:se:mdh:diva-12259 (URN)10.1109/ITMC.2011.5995974 (DOI)2-s2.0-80053046749 (Scopus ID)9781612849522 (ISBN)
Conference
1st International Technology Management Conference, ITMC 2011; San Jose, CA; 27 June 2011 through 30 June 2011
Projects
Effective Outsourcing/Offshoring of Research, Development, and Engineering
Available from: 2011-05-16 Created: 2011-05-16 Last updated: 2014-02-18Bibliographically approved
3. Bad Smells in Offshoring: Six Pitfalls Leaders Should Avoid
Open this publication in new window or tab >>Bad Smells in Offshoring: Six Pitfalls Leaders Should Avoid
(English)Manuscript (preprint) (Other academic)
Keyword
Globally distributed work, Offshoring, Global identity, Governance
National Category
Social Sciences
Research subject
Innovation and Design
Identifiers
urn:nbn:se:mdh:diva-24503 (URN)
Note

Submitted to Strategic Management Review August 2013

Available from: 2014-02-18 Created: 2014-02-18 Last updated: 2014-02-18Bibliographically approved
4. Uncovering paradoxes in managing globally distributed product development: A multiple case study
Open this publication in new window or tab >>Uncovering paradoxes in managing globally distributed product development: A multiple case study
2013 (English)In: International Journal of Case study method, Research and Application, ISSN 1554-7752, Vol. XXV, no 3, 195-206 p.Article in journal (Refereed) Published
Abstract [en]

Offshoring of knowledge-intensive work is a relatively new phenomenon wherein organizations choose to distribute segments of their value chain ranging from testing, to product development and innovation across geographical and organizational boundaries. Moving work from one location to another creates new challenges for the organization as the complexity of the processes and number of organizational interfaces increases. This paper uses three case studies to explore the paradoxes and underlying tensions found in the practice of globally distributed development. The study demonstrates how multiple levels of analysis can be applied to resolve the tensions and trade-offs in globally distributed work.

Keyword
Case study, paradoxes, offshoring, product development
National Category
Engineering and Technology
Identifiers
urn:nbn:se:mdh:diva-22891 (URN)
Available from: 2013-11-20 Created: 2013-11-19 Last updated: 2014-02-18Bibliographically approved
5. Strategy implementation as a contingent process: The interplay of Managerial Interpretation, Task organization, and Implementation experience
Open this publication in new window or tab >>Strategy implementation as a contingent process: The interplay of Managerial Interpretation, Task organization, and Implementation experience
2013 (English)Conference paper, Published paper (Refereed)
Keyword
Strategy implementation, Managerial Interpretation, Task organization, Implementation experience
National Category
Social Sciences
Research subject
Innovation and Design
Identifiers
urn:nbn:se:mdh:diva-24502 (URN)
Conference
29th EGOS Colloquium: Bridging Continents, Cultures & Worldviews, July 4–6, 2013 Montréal, Canada
Available from: 2014-02-18 Created: 2014-02-18 Last updated: 2014-02-18Bibliographically approved
6. The Middle Management of Offshoring: Understanding Offshoring Strategy Implementation at a Meso Level
Open this publication in new window or tab >>The Middle Management of Offshoring: Understanding Offshoring Strategy Implementation at a Meso Level
2013 (English)In: Lecture notes in Business Information Processing: Advances in global sourcing: Models, Governance, and Relationships / [ed] Ilan Oshri, Julia Kotlarsky and Leslie Willcocks, Springer , 2013, 71-92 p.Chapter in book (Other academic)
Abstract [en]

A majority of the research on offshoring is positioned on a macro level, explaining firm level strategies for offshoring and the antecedents of offshoring decisions, but research on implementation of offshoring strategies is rare. The author suggest that the actual development and implementation of offshoring can be better understood by applying a meso level approach; the middle management in the organization and its relation to top management directives, when implementing an offshoring strategy. A multiple case study of two multinational company’s offshoring product development to captive centers in India and China show how middle management facilitates the transfer process. By placing the study at a meso level and taking a strategy-as-practice perspective, the findings included: a) the iterative nature of the offshoring process, b) the lack of (communicated) strategies for offshoring and its consequences, and c) a set of routines connected to offshoring emerging at different levels in the company.

Place, publisher, year, edition, pages
Springer, 2013
Keyword
Offshoring, middle management, sweden, india, strategy implementation, strategy as practice
National Category
Engineering and Technology
Identifiers
urn:nbn:se:mdh:diva-22892 (URN)10.1007/978-3-642-40951-6 (DOI)000345037000005 ()978-3-642-40950-9 (ISBN)
Note

7th Global Sourcing Workshop 2013; Val d'Isere; France; 11 March 2013 through 14 March 2013

Available from: 2013-11-20 Created: 2013-11-19 Last updated: 2014-12-19Bibliographically approved

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