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Governance Choice in Global Sourcing of Services: The Impact on Service Quality and Cost Saving Performance
Author(s) -
Elia Stefano,
Caniato Federico,
Luzzini Davide,
Piscitello Lucia
Publication year - 2014
Publication title -
global strategy journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.814
H-Index - 24
eISSN - 2042-5805
pISSN - 2042-5791
DOI - 10.1002/gsj.1078
Subject(s) - offshoring , transaction cost , outsourcing , endogeneity , corporate governance , business , industrial organization , service (business) , sample (material) , quality (philosophy) , offshore outsourcing , marketing , economics , finance , philosophy , chemistry , chromatography , epistemology , econometrics
This article deals with the performance implications of the governance mode (captive offshoring versus outsourcing) selected when companies offshore service activities, which is still quite controversial in the literature. After accounting for endogeneity issues, we investigate the relationship between governance and performances (both in terms of cost saving and service quality) on a sample of 132 initiatives from the 2009 O ffshoring R esearch N etwork survey. Our results show that the alignment of the governance choice with an extended transaction cost economics approach leads to better performances. However, the impact of a possible misalignment: (1) is asymmetric, as only the failure to undertake a captive mode negatively affects performance; and (2) negatively affects service quality more than cost saving.