RA16WP 2013 SMJ Hidden Costs.pdf (253.96 kB)
Uncovering the hidden costs of offshoring: the interplay of complexity, organizational design and experience
journal contribution
posted on 2023-06-09, 19:04 authored by Marcus M. Larsen, Stephan ManningStephan Manning, Torben PedersenThis study investigates estimation errors due to hidden costs—the costs of implementation that are neglected in strategic decision-making processes—in the context of services offshoring. Based on data from the Offshoring Research Network, we find that decision makers are more likely to make cost-estimation errors given increasing configuration and task complexity in captive offshoring and offshore outsourcing, respectively. Moreover, we show that experience and a strong orientation toward organizational design in the offshoring strategy reduce the cost-estimation errors that follow from complexity. Our findings contribute to research on the effectiveness of sourcing and global strategies by stressing the importance of organizational design and experience in dealing with increasing complexity.
History
Publication status
- Published
File Version
- Accepted version
Journal
Strategic Management JournalISSN
0143-2095Publisher
WileyExternal DOI
Issue
5Volume
34Page range
533-552Department affiliated with
- Business and Management Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2019-09-27First Open Access (FOA) Date
2019-09-27First Compliant Deposit (FCD) Date
2019-09-27Usage metrics
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