Open Innovation: The New Imperative for Creating and Profiting from Technology

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

This paper empirically studies determinants of decision by companies to offshore innovation activities. It uses survey data from the international Offshoring Research Network project to estimate the impact of managerial intentionality, past experience, and environmental factors on the probability of offshoring innovation projects. The results show that the emerging shortage of highly skilled science and engineering talent in the US and, more generally, the need to access qualified personnel are important explanatory factors for offshoring innovation decisions. Moreover, contrary to drivers of many other functions, labor arbitrage is less important than other forms of cost savings. The paper concludes with a discussion of the changing dynamics underlying offshoring of innovation activities, suggesting that companies are entering a global race for talent.

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Why are companies offshoring innovation ?: the emerging global race for talent

In the largest sense, global strategy amounts to (1) the optimal disaggregation or slicing of the firm's value chain into as many constituent pieces as organizationally and economically feasible, followed by (2) decisions as how each slice should be allocated geographically ('offshoring') and organizationally ('outsourcing'). Offshoring and outsourcing are treated as strategies that need to be simultaneously analysed, where just 'core' segments of the value chain are retained in-house, while others are optimally dispersed geographically, as well as dispersed over allies and contractors. This amounts to a reconsideration of the nature of the firm that captures the dynamic changes in global configuration and a reconsideration of what constitutes 'core' activities that need to be retained internally. The article proposes a new research agenda that searches for each firm's optimal degree of disaggregation and global dispersion given that further scattering of value chain activities entail benefits as well as increased complexity and costs.

Reconceptualizing the Firm in a World of Outsourcing and Offshoring: The Organizational and Geographical Relocation of High‐Value Company Functions

This 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.

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Uncovering the hidden costs of offshoring: The interplay of complexity, organizational design, and experience

Executive Overview The seemingly unlimited availability of science and engineering (S&E) talent in emerging economies and the increasing difficulties of finding such talent in advanced economies have given rise to a new trend: the global sourcing of S&E talent. This paper examines the antecedents and dynamics of this trend. In particular, it examines the coevolution of macroeconomic forces, domestic and offshore national policies, industry dynamics, and firm-level offshoring capabilities driving today's offshoring decisions. The analysis exploits findings from the Offshoring Research Network (ORN) project. By taking a dynamic and multilevel perspective on next-generation offshoring, this paper may inform both firm-level strategies and national policy-making.

https://www.jstor.org/stable/info/27747462

Massini Silvia

Papers

A Dynamic Perspective on Next-Generation Offshoring: The Global Sourcing of Science and Engineering Talent