Governing business process offshoring: Properties, processes, and preferred modes

Yadong Luo, Stephanie Lu Wang, Vaidyanathan Jayaraman, Qinqin Zheng

Research output: Contribution to journalArticle

26 Scopus citations

Abstract

This article examines an important yet understudied issue-the governance mode for business process offshoring (BPO). By applying transaction cost economics and organizational control perspective in the global BPO context, we suggest that BPO's governance mode (foreign captive, joint venture, and independent vendor) is determined by task features, such as knowledge specialization, information security, and process codifiability, and by needed process integration, horizontally between departments and units within the provider and vertically between the provider and its global client and its local subcontractor. Findings from our analysis of 308 global BPO units in India and China confirm our hypotheses.

Original languageEnglish (US)
Pages (from-to)407-419
Number of pages13
JournalJournal of World Business
Volume48
Issue number3
DOIs
StatePublished - Jul 1 2013

Keywords

  • Business process offshoring (BPO)
  • Emerging markets
  • Governance mode
  • Organizational control
  • Transaction cost economics

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Marketing

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