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Making the business process outsourcing decision: why distance matters

Gerbl, Martina, McIvor, Ronan and Humphreys, Paul (2016) Making the business process outsourcing decision: why distance matters. International Journal of Operations & Production Management, 36 (9). pp. 1037-1064. [Journal article]

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URL: http://dx.doi.org/10.1108/IJOPM-04-2014-0192

DOI: 10.1108/IJOPM-04-2014-0192


Purpose – The aim of this paper is to develop a framework that incorporates both firm- and process-level factors for understanding location distance choice in the business process outsourcing (BPO) decision.Design/methodology/approach – The research involved undertaking in-depth case study analysis of a number of BPO decisions in six German companies, and employing transaction cost economics (TCE) and the resource-based view (RBV) as a theoretical basis.Findings – The findings have shown that existing literature in the operations management (OM) literature does not provide a complete understanding of the complexities of location distance choice in the BPO decision. This decision requires an understanding of a range of factors at both the firm- and process-level. The findings here enhance our understanding of how these factors interact to influence the potential distance options.Practical implications - The findings have shown how organisations can influence the factors that affect the location distance choice including modularising business processes, developing outsourcing capabilities, and supplementing internal skills in areas such as cultural management and performance monitoring.Originality/value – This is one of the first studies in the OM field to analyse how organisations make the decision in relation to local, nearshore, and offshore location distance options. The paper has highlighted the importance of OM concepts such as performance management and continuous improvement to this phenomenon, and the paper has offered a number of important areas for further research.

Item Type:Journal article
Keywords:Outsourcing, Case study, Transaction cost economics, Resource-based view
Faculties and Schools:Ulster Business School > Department of Management and Leadership
Ulster Business School > Department of International Business
Ulster Business School
Research Institutes and Groups:Business and Management Research Institute
ID Code:35775
Deposited By: Professor Ronan McIvor
Deposited On:06 Sep 2016 09:01
Last Modified:17 Oct 2017 16:25

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