The evolution of risk in information systems offshoring: The impact of home country risk, firm learning, and competitive dynamics

MIS Quarterly: Management Information Systems

Volumn 33, Issue 3, 2009, Pages 597-616

  Hahn, Eugene D ^a   Doh, Jonathan P ^b   Bunyaratavej, Kraiwinee ^c  

^a SALISBURY UNIVERSITY   (United States)

^b VILLANOVA UNIVERSITY   (United States)

^c Wesley College   (United States)

Author keywords

Empirical; FDI; Firm experience; IS offshoring; Longitudinal; Offshore outsourcing; Risk

Indexed keywords

COMPETITION; DIGITAL STORAGE; INFORMATION MANAGEMENT; INFORMATION SYSTEMS; INFORMATION USE; LOCATION; OFFSHORE OIL WELL PRODUCTION; PUBLIC POLICY; RISK ASSESSMENT; RISKS; SOFTWARE TESTING; STATISTICAL TESTS;

EMPIRICAL; FIRM EXPERIENCE; IS OFFSHORING; LONGITUDINAL; OFFSHORE OUTSOURCING;

OUTSOURCING;

EID: 69549098245     PISSN: 02767783     EISSN: None     Source Type: Journal    
DOI: 10.2307/20650312     Document Type: Article

References (92)

1. Abrahamson, E., and Rosenkopf, L. 1993. "Institutional and Competitive Bandwagons: Using Mathematical Modeling as a Tool to Explore Innovation Diffusion," Academy of Management Review (18:3), pp. 487-515.
2. Ang, S., and Cummings, L. L. 1997. "Strategic Response to Institutional Influences on Information Systems Outsourcing," Organization Science (8:3), pp. 235-256. (Pubitemid 127073311)
3. Ang, S., and Straub, D. W. 1998. "Production and Transaction Economies and IS Outsourcing: A Study of the U.S. Banking Industry," MIS Quarterly (22:4), pp. 535-552. (Pubitemid 128684566)
4. Aspray, W., Mayadas, F., and Vardi, M. Y. (eds.). 2006. Globalization and Offshoring of Software: A Report of the A CM Job Migration Task Force, New York: Association for Computing Machinery.
5. Buch, C. M, Kleinert, J., and Toubal, F. 2006. "Where Enterprises Lead, People Follow? Links between Migration and FDI in Germany," European Economic Review (50:8), pp. 2017-2036. (Pubitemid 44509747)
6. Bunyaratavej, K, Hahn, E. D., and Doh, J. P. 2007. "International Offshoring of Services: A Parity Study," Journal of International Management (13:1), pp. 7-21.
7. Bahli, B., and Rivard, S. 2003. "The Information Technology Outsourcing Risk: A Transaction Cost and Agency TheoryBased Perspective," Journal of Information Technology (18:3), pp. 211-221. (Pubitemid 37406519)
8. Barkema, H. G., Bell, J. H. J., and Pennings, J. M. 1996. "Foreign Entry, Cultural Barriers, and Learning," Strategic Management Journal (17:2), pp. 151-166.
9. Barthélemy, J. 2001. "The Hidden Costs of IT Outsourcing," Sloan Management Review (42:3), pp. 60-69.
10. Carmel, E., and Agarwal, R. 2002. "The Maturation of Offshore Sourcing of Information Technology Work," MIS Quarterly Executive (1:2), pp. 65-77.
11. Carmel, E., and Nicholson, B. 2005. "Small Firms and Offshore Software Outsourcing: High Transaction Costs and Their Mitigation," Journal of Global Information Management (13:3), pp. 33-54. (Pubitemid 40851335)
12. Caves, R. E., and Mehra, S. K. 1986. "Entry of Foreign Multinationals into U.S. Manufacturing Industries," in Competition In Global Industries, M. E. Porter (ed.), Boston: Harvard Business School Press, pp. 449-481.
13. Chang, S. J. 1995. "International Expansion Strategy of Japanese Firms: Capability Building through Sequential Entry," Academy of Management Journal (38:2), pp. 383-407.
14. Chang, S. J., and Park, S. 2005. "Types of Firms Generating Network Externalities and MNCs ' Co-Location Decisions," Strategic Management Journal (26:7), pp. 595-615. (Pubitemid 40819961)
15. Chang, S. J., and Rosenzweig, P. M. 2001. "The Choice of Entry Mode in Sequential Foreign Direct Investment," Strategic Management Journal (22), pp. 747-776.
16. Choudhury, V., and Sabherwal, R. 2003. "Portfolios of Control in Outsourced Software Development Projects," Information Systems Research (14:3), pp. 291-314. (Pubitemid 37179667)
17. Chung, W., and Song J. 2004. "Sequential Investment, Firm Motivation and Agglomeration of Japanese Electronics Firms in the United States," Journal of Economics and Management Strategy (13), pp. 539-560. (Pubitemid 39137790)
18. Dhar, S., and Balakrishnan, B. 2005. "Risks, Benefits, and Challenges in Global IT Outsourcing: Perspectives and Practices," Journal of Global Information Management (14:3), pp. 39-69.
19. Davidson, W. H. 1980. "The Location of Foreign Direct Investment Activity: Country Characteristics and Experience Effects," Journal of International Business Studies ( 11:2), pp. 9-22.
20. Delios A., and Henisz, W. J. 2003. "Political Hazards, Experience, and Sequential Entry Strategies: The International Expansion of Japanese Firms, 1980-1998," Strategic Management Journal (24:11), pp. 1153-1164.
21. Doh, J. P. 2005. "Offshore Outsourcing: Implications for International Business and Strategic Management Theory and Practice," Journal of Management Studies (42:3), pp. 695-704.
22. Duke/Archstone. 2005. Second Bi-Annual Offshore Survey Results, Durham, NC: Duke University CIBER (Center for International Business Education and Research)/Archstone Consulting (https:// offshoring.fuqua.duke.edu/pdfs/ 2ndBiannualOffshoring Highlights.pdf).
23. Erber, G., and Sayed-Ahmed, A. 2005. "Offshore Outsourcing: A Global Shift in the Present IT Industry," Intereconomics (40:2), pp. 100-112. (Pubitemid 41327091)
24. Farrell, D. 2004. "Beyond Offshoring: Assess Your Company's Global Potential," Harvard Business Review (82:12), pp. 82-90. (Pubitemid 39636839)
25. Fish, K. E., and Seydel, J. 2006. "Where IT Outsourcing Is and Where it Is Going: A Study Across Functions and Department Sizes," Journal of Computer Information Systems (46:3), pp. 96-103. (Pubitemid 43813077)
26. Gatignon, H., and Anderson, E. 1988. "The Multinational Corporation's Degree of Control over Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics, and Organization (4:2), pp. 305-336.
27. Gimeno, J., Hoskisson, R. E., Bea, B. D., and Wan, W. P. 2005. "Explaining the Clustering of International Expansion Moves: A Critical Test in the U.S. Telecommunications Industry "Academy of Management Journal (48:2), pp. 297-319. (Pubitemid 40747071)
28. Globerman, S., and Shapiro, D. 2002. "Global Foreign Direct Investment Flows: The Role of Global Governance," World Development (30:11), pp. 1899-1919. (Pubitemid 35294994)
29. Gomes-Casseres, B. 1989. "Ownership Structures of Foreign Subsidiaries: Theory and Evidence," Journal of Economic Behaviour and Organization (11), pp. 1-25.
30. Gomes-Casseres, B. 1990. "Firm Ownership Preferences and Host Government Restrictions: An Integrated Approach," Journal of International Business Studies (21:1), pp. 1-22.
31. Graf, M., and Mudambi, S. M. 2005. "The Outsourcing of ITEnabled Business Processes: A Conceptual Model of the Location Decision," Journal of International Management ( 11:2), pp. 253-268. (Pubitemid 40984487)
32. rd ed.), Upper Saddle River, NJ: Prentice-Hall.
33. Grover, V., Cheon, M. J., and Teng, J. T. C. 1996. "The Effect of Service Quality and Partnership on the Outsourcing of Information Systems Functions," Journal of Management Information Systems (12:4), pp. 89-116. (Pubitemid 126704856)
34. Grover, V., and Teng, J. T. C. 1993. "The Decision to Outsource Information Systems Functions," Journal of Systems Management (44:11), pp. 34-38.
35. th ed.), Upper Saddle River, NJ: Prentice Hall.
36. Head, K., Mayer, T., and Ries, J. 2002. "Revisiting Oligopolistic Reaction: Are Decisions on Foreign Direct Investment Strategic Complements?," Journal of Economics & Management Strategy (11:3), pp. 453-472.
37. Henisz, W. J., and Delios A. 2001. "Uncertainty, Imitation, and Plant Location: Japanese Multinational Corporations, 19901996," Administrative Science Quarterly (46:3), pp. 443-475. (Pubitemid 33385892)
38. Henisz, W. J., and Macher, J. T. 2004. "Firm- and Country-Level Tradeoffs and Contingencies in the Evaluation of Foreign Investment: The Semiconductor Industry, 1994-2002," Organization Science (15:5), pp. 537-554.
39. Hennart, J-F. 1991. "The Transaction Cost Theory of Joint Ventures: An Empirical Study of Japanese Subsidiaries in the USA," Management Science (37:4), pp. 483-497.
40. Johanson, J., and Vahlne, J. E. 1977. "The Internationalization Process of the Firm: A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies (8:1), pp. 23-32.
41. Johanson, J., and Vahlne, J. E. 1992. "Management of Foreign Market Entry," Scandinavian International Business Review (1:3), pp. 9-27.
42. Johnson, J., and McGregor, R. 2006. "Up to the Job? How India and China Risk Being Stifled by a Skills Squeeze," Financial Times, July 20, p. 9.
43. Kaufmann, D., Kraay, A., and Mastruzzi, M. 2006. "Governance Matters V: Governance Indicators for 1996-2005," World Bank Policy Research Working Paper No. 4012, Washington, DC: The World Bank, September.
44. King, W. R. 2005. "Innovation in Responding to the 'Threat' of IT Offshoring," Information Systems Management (22:4), pp. 80-81.
45. Kliem, R. 2004. "Managing the Risks of Offshore IT Development Projects," Information Systems Management (21:3), pp. 22-27.
46. Knickerbocker, F. T. 1973. Oligopolistic Reaction and Multinational Enterprise, Boston: Harvard University Press.
47. Kobrin, S. J. 1978. "When Does Political Instability Result in Increased Investment Risk?," Columbia Journal of World Business (13), pp. 113-122.
48. Kobrin, S. J. 1979. "Political Risk: A Review and Reconsideration," Journal of International Business Studies (10:1), pp. 67-80.
49. Kogut, B. 1988. "Joint Ventures: Theoretical and Empirical Perspectives," Strategic Management Journal (9:4), pp. 319-332.
50. Kogut, B., and Singh, H. 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies (19:3), pp. 411-432.
51. Koh, C., Ang, S., and Straub, D. W. 2004. "IT Outsourcing Success: A Psychological Contract Perspective," Information Systems Research (15:4), pp. 356-373. (Pubitemid 40192457)
52. Krishna, S., Sahay, S., and Walsham, G. 2004. "Managing CrossCultural Issues in Global Software Outsourcing," Communications of the ACM (41:4), pp. 62-66.
53. Lacity, M. C., and Hkschheim,R. 1993. "The Information Systems Outsourcing Bandwagon," Sloan Management Review (35:1), pp. 73-86.
54. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., and Vishny, R. W. 1997. "Legal Determinants of External Finance," Journal of Finance (52:3), pp. 1131-1150.
55. Laird, N. M., and Ware, J. H. 1982. "Random-Effects Models for Longitudinal Data," Biometrics (38:4), pp. 963-974.3
56. Lee, J.-N., and Kim,Y.-G. 1999. "Effect of Partnership Quality on IS Outsourcing Success: Conceptual Framework and Empirical Validation," Journal of Management Information Systems (15:4), pp. 29-61.
57. Levina, N., and Ross, J. W. 2003. "From the Vendor's Perspective: Exploring the Value Proposition in Information Technology Outsourcing," MIS Quarterly (27:3), pp. 331-364.
58. Lieberman, M., and Montgomery, D. 1988. "First Mover Advantages," Strategic Management Journal (9), pp. 41-58.
59. Lin, L., Geng, X., and Whinston, A. B. 2005. "A Sender-Receiver Framework for Knowledge Transfer," MIS Quarterly (29:2), pp. 197-219.
60. Loh, L., and Venkatraman, N. 1992. "Determinants of Information Technology Outsourcing: A Cross-Sectional Analysis," Journal 7 of Management Information Systems (9:1), pp. 7-24.
61. Mikulich, S. K., Zerbe, G. O., Jones, R. H., and Crowley, J. H. 1999. "Relating the Classical Covariate Adjustment Techniques of Multivariate Growth Curve Models to Modem Univariate Mixed Effects Models," Biometrics (55:3), pp. 957-964.
62. Murray, J., and Kotabe, M. 1999. "Sourcing Strategies of U.S. Service Companies: A Modified Transaction-Cost Analysis," Strategic Management Journal (20:9), pp. 791-809. (Pubitemid 129549286)
63. Nachum, L., and Zaheer, S. 2005. "The Persistence of Distance? The Impact of Technology on MNE Motivations for Foreign Investment," Strategic Management Journal'(28:6), pp. 747-767.
64. Oetzel, J. 2005. "Smaller May Be Beautiful but Is it More Risky? Assessing and Managing Political and Economic Risk in Costa Rica," International Business Review (14:6), pp., 765-790. (Pubitemid 43012825)
65. Oxley, J. E., and Yeung, B. 2001. "E-Commerce Readiness: Institutional Environment and International Competitiveness," Journal of International Business Studies (32:4), pp. 705-723. (Pubitemid 33585647)
66. Padmanabhan, P., and Cho, K. R. 1999. "Decision Specific Experience in Foreign Ownership and Establishment Strategies: Evidence from Japanese Firms," Journal of International Business Studies (30:1), pp. 25-41.
67. Pinheiro, J. C., and Bates, D. M. 2000. Mixed-Effects Models in S and S-PLUS, New York: Springer.
68. Prahalad, C. K., and Doz, Y. 1987. The Multinational Mission: Balancing Local Demands and Global Vision, New York: Free Press.
69. Qu, Z., and Brocklehurst, M. 2003. "What Will it Take for China to Become a Competitive Force in Offshore Outsourcing? An Analysis of the Role of Transaction Cost in Supplier Selection," Journal of Information Technology (18:1), pp. 53-67. (Pubitemid 36564451)
70. nd ed.), Thousand Oaks, CA: Sage Publications.
71. Robock, S. H. 1971. "Political Risk: Identification and Assessment," Columbia Journal of World Business (6:4), pp. 6-20.
72. Rottman, J. W., and Lacity, M. C. 2006. "Proven Practices for Effectively Offshoring IT Work," Sloan Management Review (47:3), pp. 56-63.
73. Schelling,T. 1978. Micromotives and Macrobehavior, New/York: Norton.
74. Senge, P. M. 2990. The Fifth Discipline: The Art and Practice of the Learning Organization, New York: Doubleday.
75. Serapio, M. G. 2005. "International Outsourcing in Information Technology," Research Technology Management(48:4), pp. 6-8.
76. Shamis, G. S., Green, M. C., Sorenson, S. M., and Kyle, D. L. 2005. "Outsourcing, Offshoring, Nearshoring: What to Do?," Journal of Accountancy (199:6), pp. 57-61.
77. Shaver, J. M., and Flyer, F. 2000. "Agglomeration Economies, Firm Heterogeneity, and Foreign Direct Investment in the United States," Strategic Management Journal (21:12), pp. 1175-1193.
78. Stopford, J. M., and Wells, L. T. 1972. Managing the Multinational Enterprise, New York: Basic Books.
79. Susarla, A., Baura, A., and Whinston, A. B. 2003. "Understanding the Service Component of Application Service Provision," MIS Quarterly (27:1), pp. 91-123.
80. Swartz, N. 2004. "Offshoring Privacy," Information Management Journal (38:5), pp. 24-26.
81. Tafti, M.H.A. 2005. "Risks Factors Associated with Offshore IT Outsourcing," Industrial Management & Data Systems (105:5), pp. 549-560.
82. Tallman, S. B. 1992. "A Strategic Management Perspective on Host Country Structure of Multinational Enterprises," Journal of Management (18:3), pp. 455-471.
83. Uhlenbruck, K., Rodriguez, P., Doh, J., and Eden, L. 2006. "The Impact of Corruption on Entry Strategy: Evidence from Telecommunication Projects in Emerging Economies," Organization Science (17:3), pp. 402-414. (Pubitemid 43829578)
84. United Nations Conference on Trade and Development (UNCTAD). 2004. World Investment Report, New York: United Nations.
85. United Nations Conference on Trade and Development (UNCTAD). 2006. World Investment Report, New York: United Nations.
86. Walsham, G. 2002. "Cross-cultural Software Production and Use: A Structurational Analysis," MIS Quarterly (26:4), pp. 359-380.
87. Wang, E. T. G. 2002. "Transaction Attributes and Software Outsourcing Success: An Empirical Investigation of Transaction Cost Theory," Information Systems Journal (12:2), pp. 153-181.
88. Williamson, O. E. 1985. The Economic Institutions of Capitalism, New York: Free Press.
89. Williamson, O. E. 1999. "Strategy Research: Governance and Competence Perspective," Strategic Management Journal (20:12), pp. 1087-1108.
90. Zaheer, S. 1995. "Overcoming the Liability of Foreignness," Academy of Management Journal (38:2), pp. 341-363.
91. Zatolyuk, S., and Allgood, B. 2004. "Evaluating a Country for Offshore Outsourcing: Software Development Providers in the Ukraine," Information Systems Management (21:3), pp. 28-33. (Pubitemid 38853813)
92. Zejan, M. 1990. "New Ventures or Acquisitions: The Choice of Swedish Multinational Enterprises," Journal of Industrial Economics (38:3), pp. 349-355.