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In knowledge outsourcing, external knowledge providers, rather than in‐house experts, are contracted to provide services which result in the production of knowledge‐intensive assets for the organisation. The purpose of this paper is to present the notion of knowledge outsourcing as an alternative strategy for knowledge management.

A case study research method is adopted to examine the knowledge outsourcing processes and activities at a for‐profit higher education enterprise that has been successful in using a knowledge outsourcing approach in the development of its online courseware.

A general process model of knowledge outsourcing is developed from the case data. The paper also draws attention to three conditions under which knowledge outsourcing may be a suitable strategy for knowledge management. Additionally, two main areas of knowledge outsourcing risk, which are related to the quality of knowledge services and the effort required to manage the outsourcing relationship, have been identified.

Given that the study involves only a single case, the findings may likely be influenced by the peculiarities of the case, including the nature of the industry, availability of external experts and top management support. Going forward, a more refined theory for knowledge outsourcing can be developed through further empirical validation with more cases.

The notion of knowledge outsourcing is introduced to managers who wish to exploit external sources rather than relying on internal capability for knowledge creation.

This paper represents one of the earliest efforts to introduce the notion of knowledge outsourcing to the knowledge management community.

This paper aims to review research on outsourcing of knowledge processes to establish the current body of knowledge and, on this basis, to identify gaps in our understanding. This action will justify further research activities and clarify where no future research is currently needed.

The study consists of a systematic review of 24 refereed empirical articles on outsourcing of knowledge processes.

Five themes were identified: outsourcing of knowledge processes, outsourcing and collaborative agreements between knowledge-based firms, factors affecting successful knowledge outsourcing, knowledge management and knowledge outsourcing and other outsourcing issues. There seems to be a lack of understanding concerning knowledge process outsourcing.

This study may not have enabled a complete coverage of all empirical articles in the field of knowledge process outsourcing. Yet, it seems reasonable to assume that the review process covered a large share of studies available.

To the best of the authors’ knowledge, no systematic literature review on this topic has previously been published in academic journals.

This paper aims to present findings on outsourcing practices in small service firms in Iceland, where the prime focus is on knowledge-intensive service firms.

To gain information on the scope and reason for outsourcing, telephone and online surveys were used. In total, 802 firms participated in the surveys, which were conducted in the period 2009-2018.

The results show that knowledge-intensive firms outsource far more than other service firms and are also more likely to have an outsourcing strategy. The grounds for increased outsourcing are cost reduction and strategic reasons, such as a focus on core competency and the search for external knowledge. In comparison with other firms, knowledge-intensive firms are increasingly outsourcing cleaning, security services, canteen and transportation, IT processes, human resource management, training and consulting. Additionally, managers of these firms select suppliers more on the basis of cost and quality. They also realize more cost savings as a consequence of outsourcing. Outsourcing had a very limited effect on employment in the firms, while cost reduction was achieved in 48.3 per cent of the firms involved.

The findings are in line with the resource-based theory and, interestingly, this is not limited to knowledge-based firms, but to a large portion of service firms as well.

This is the first in-depth study on outsourcing patterns in knowledge-intensive firms, which uses theoretical classification in empirical analysis.

The purpose of this paper is to explore the extent to which outsourcing can be regarded as a mode of increasing organization learning through the internalization of new routines.

The paper features six case studies of firms that have outsourced parts, or all of their information technology (IT) activities.

When a firm outsources an IT activity (that has been performed in‐house), it needs to develop an ability to specify to its supplier(s), and articulate its IT requirements in explicit terms. Firm's effort to externalize knowledge that was internal to an external supplier implies that a great deal of relatively tacit knowledge has to be converted into explicit knowledge, so that suppliers are able to understand the firm's business specificity. In this very process of externalizing knowledge and interacting with suppliers and other market players, the firm develops new rules, routines and procedures relating to how to manage the outsourced IT activity, which over time will be internalized.

The paper is of value in linking outsourcing and organizational learning.

Trust, as one of the core components of a relationship, has attracted research attention from many disciplines. From the perspective of IT outsourcing, this paper aims to divide trust into two levels, interpersonal trust and interorganizational trust, and explore the effects of these two levels of trust on knowledge sharing and IT outsourcing success.

Based on social exchange theory and the theory of organization boundary systems, a theoretical model was developed and tested empirically with the responses to a cross‐sectional survey. Data were collected from key informants of 143 firms that had outsourced at least part of their IT functions.

The data analysis results showed that interpersonal trust plays a more dominant role than does interorganizational trust in making IT outsourcing successful and the extent of knowledge sharing has a significant mediating effect between interpersonal trust and IT outsourcing success.

From the managerial perspective, findings from this study once again emphasize the importance of relationship management (trust and knowledge sharing) on overall IT outsourcing success. Paying attention to interpersonal trust is an effective way for an organization to build and maintain a successful IT outsourcing relationship with its service provider.

The aim of this paper is to investigate the importance of managing outsourcing without allowing learning skills to become atrophied, but instead ensuring that the transfer of functions to external agents (by outsourcing) can actually be a source of new learning. From an organizational learning perspective, the issues addressed fall within the sphere of corporate strategy and play a critical role in value creation. Hypotheses are presented concerning the role of management, its leadership styles and its ability to trigger mechanisms of new knowledge creation with a consequent impact on value creation, even when production processes are performed by third parties.

The paper's investigation is based on a positivist[1] philosophy, and follows a socio‐economic and knowledge‐based approach. The method used to verify the hypotheses involved a process of hands‐on research, with bank executives being asked to complete a structured questionnaire.

From the survey it emerged that in order to create value and allow the outsourcing output to be incorporated in a process of continual improvement of resources, a correct management of the relationship with the outsourcing service provider is most efficacious if the output is treated as shared, disseminated and incorporated knowledge. It was found that, in the presence of democratic styles, knowledge becomes learning and generates the maximum benefit in terms of distinctive resources.

This paper argues that it is possible to outline a procedure in which particular importance is given to control and leadership, which are the basis for dissemination and learning outcome.

We use experiential learning theory to develop new conceptual insights into offshore outsourcing of innovation. In particular, we show how offshore vendor firms are able to overcome liability of outsidership and eventually learn how to innovate on behalf of their onshore clients as a result of their embedment with clients across multiple teams. We theorize that the cross-border relocation of innovative activities from a client firm to an offshore vendor is only possible when teams within the vendor team have assumed a double-loop learning capability from the client allowing them to determine governing variables relating to the client’s organizational environment. Through direct on-the-job experience working with each other, international teams comprised in part from the vendor and in part from the client can undergo different learning transitions, which we classify as either relationship-oriented or task-oriented. These transitions determine the extent to which double-loop learning can be developed in offshore locations and are influenced by intra-team dynamics and the way the joint teams organize and manage themselves. Our perspective has implications for our understanding of organizational designs associated with both client and vendor multinational enterprises seeking to benefit from innovation in offshore outsourcing.

This study aims to examine how the role of peripheral knowledge changes along with the perspectives of vendor and client in inter-organizational IT outsourcing. To this end, this study tests the effects of the peripheral knowledge of vendors and clients on IT outsourcing performance under three different combinations of performance-assessing views from both parties.

To contrast the effects of the peripheral knowledge of vendors and clients based on their views, this study collects matching data on 107 projects from both parties. The survey method is adopted to measure the peripheral knowledge levels of vendors and clients and IT outsourcing success. The associations between peripheral knowledge and IT outsourcing performance are then assessed when the views match, cross and agree to a certain level.

The peripheral knowledge of vendors plays a more significant role than that of clients in most IT outsourcing cases. Moreover, the agreement between the peripheral knowledge of vendors and clients shows a moderating effect only when the performance is assessed by clients than by vendors.

This study contrasts the peripheral knowledge of vendors and clients by altering performance-assessing views in IT outsourcing. This study also rationalizes why the peripheral knowledge of vendors is more important than that of clients, as well as explains whose perspective is more significant when the performance is assessed.

With an increase in global outsourcing, there is a need for risk mitigation strategies for outsourcing partner selection. Most outsourced services are getting commoditized, making it difficult to clearly differentiate capabilities of service providers. Also, the move towards knowledge process outsourcing (KPO) services is an area where the risks of failure are perceived to be higher. Since the knowledge dimension is a critical one for any outsourced activity, an objective assessment of knowledge gaps is important in the overall process of evaluation of the external provider. This paper aims to address the issues involved.

The paper builds the linkage between the measurability of the knowledge dimension and outsourcing project success through a set of propositions. It proposes a formal process of “knowledge gap assessment” as an input to assessing partner viability. It also identifies two important dimensions that are specific to an outsourcing relationship. Finally, the paper outlines a conceptual framework that takes these dimensions into account through a process of benchmarking using role simulations that could be used as a generic tool for performing such an assessment.

Such an assessment can help to classify prospective service providers as exhibiting low‐, moderate‐ or high‐knowledge gaps in different knowledge categories. Depending on the cost of bridging these gaps the associated risks can be classified as low, medium or high, facilitating appropriate managerial decisions.

This paper proposes a conceptual model and a set of propositions which will need to be tested and refined through further empirical research.

The framework can be a useful tool for partner selection by firms who are looking to outsource activities. A simulation‐based benchmarking approach is likely to provide a more objective assessment of a firm's knowledge‐based capability, both when compared to the parent (outsourcing) organization as well as other short‐listed service providers.

This paper fulfils an identified need for minimizing risk in both business process outsourcing as well as KPO projects by focusing on the knowledge dimension and offers a practical framework to enable the same.