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The article discusses offshoring as an irreversible trend that is redefining the paradigm of global competition of service firms, and provides insight and practical advice regarding the offshore behavior of service firms for management professionals.

The offshoring process is applied to service firms including lessons learned. It is largely based on the results of a research study among 247 service firms determining their offshore behavior and illustrated with examples of their offshoring activities.

Offshoring is redefining global competition and service firms should use it as a tool to create a competitive advantage vis‐à‐vis their competitors. In doing so they should careful prepare offshoring in different phases of the process as suggested in the 4M approach. Moreover, they should decide in an early stage on monitoring, reporting and measuring the offshoring process and secure continuous commitment from management.

The offshoring process referred to in this article as the 4M approach should be further tested among service firms.

Providing insight and practical advice regarding the offshore behavior of service firms for management professionals.

Research in the past has been largely focused on manufacturing firms. This article focuses on service firms and is based on findings of primary research executed by the authors.

Offshoring, the process of relocating discrete business functions or processes to foreign locations, is rapidly expanding. Offshoring integrally links real estate decisions to business strategy, offering corporate real estate (CRE) professionals an opportunity to advise and perform at the highest levels of their organisations. Fulfilling this degree of strategic leadership requires knowledge of the issues, opportunities, challenges and tactics involved in the offshoring process. This paper analyses the views and experience of CRE executives involved in offshoring, and prepares the reader to think strategically, act proactively and employ best practices to achieve future success with offshoring.

This study aims to examine the effect of exploratory innovation offshoring on the level of hierarchical control and how this effect is moderated by transnational and dynamic environments.

This study draws on a sample of 148 Taiwanese multinational enterprises to examine their governance decisions on foreign investments.

Findings show that the more innovation offshoring is exploratory, the higher the level of hierarchical control will be used by multinational enterprises (MNEs) and that transnational and dynamic environments have different moderation effects on the positive exploratory innovation offshoring-hierarchical control relationship.

This study has two theoretical implications. First, this study extends the concept of complexity from a transaction attribute level (problem) to an environmental level (transnational environment) and finds that exploratory innovation offshoring and transnational environments interactively impact governance choices. Second, this study distinguishes between two sources of technological uncertainty – uncertainty due to transaction-level attributes (exploratory innovation offshoring) and external environments (dynamic environments) and finds that exploratory innovation offshoring and dynamic environments interactively impact governance choices.

The practical implication of this study lies in the simultaneous consideration of exploratory innovation offshoring and transnational/dynamic environments, which will allow international decision-makers to adjust/select the governance forms most appropriate for speedy responding to and handling environmental changes.

This study employs the theoretical perspectives of transaction cost economics (TCE) and resource-based view (RBV) to analyze and discuss the impact of operational environments – transnational and dynamic environments – on MNEs’ decisions on the governance structure for a given innovation offshoring.

Manufacturing offshoring has received substantial attention within international business studies that have explored where activities are located and how they are governed. However, recent examples of manufacturing relocation to the home country/region have put the advantages of offshoring under scrutiny, since the location of production activities in high-cost countries may have positive impacts in terms of innovation and marketing opportunities. Despite the growing interest in offshoring and “relocations of second degree,” there is a lack of knowledge on the alternative strategies firms may implement after offshoring. This chapter aims to propose a comprehensive framework to summarize and classify the multiple alternatives firms may implement after the initial relocation abroad of manufacturing activities. Based on an extensive literature review and a comparative analysis of Italian case studies, the chapter suggests theoretical advancement in the theory of location of business activities, offering multiple post-offshoring strategic options that may be implemented individually or in combination. In so doing, the analysis also stresses the variety of strategic paths and the complexity of choices concerning manufacturing location, emphasizing reshoring as a nuanced phenomenon and exploring how domestic and foreign locations can complement each other and be mutually reinforcing.

Purpose – The purpose of the chapter is to analyze the factors that lead firms to offshore advanced tasks.

Methodology/approach – The study uses a 1,500-firm survey from Denmark to investigate the offshoring of 12 tradable manufacturing, technical, and service activities across different industries.

Findings – Findings indicate that offshoring of advanced tasks is driven by a different set of strategic motives than previous waves of offshoring, which predominantly included simple and standardized routine tasks. While the lower cost of unskilled, labor-intensive processes is the incentive for firms that offshore less advanced tasks, a desire to broaden and deepen global networks of new knowledge spurs highly knowledge-intensive companies to offshore more advanced tasks.

Originality/value of chapter – We propose that offshoring should be analyzed on a more disaggregated level of analysis than is the norm in mainstream offshoring literature. To reflect the trend whereby firms are “slicing” their value chain in finer and finer parts and locate these in various locations around the world, offshoring should be analyzed at the task level, since this paves the way for a richer understanding of offshoring strategies and processes.

Purpose – The purpose of this chapter is to analyse the influence of offshoring on entrepreneurial activity (i.e. the introduction of new products and services).

Methodology/approach – Conceptual

Practical implication – The framework proposed in this study provides some indication to managers about designing an offshoring strategy. Particularly, we aim to inform managers that offshoring various functions may differentially influence firm innovation and that the effect also depends on the governance mode used for the offshore operations and managerial oversight of the offshoring process.

Originality/value of chapter – We provide a theoretical framework that proposes that the offshoring of knowledge intensive services (KIS) and that of labour-intensive services (LIS) will differentially influence the ability of firms to introduce new products and services. While the offshoring of KIS has an inverted U-shaped influence on entrepreneurial activity, the offshoring of LIS has a positive impact. In addition, we propose that these relationships are conditioned by organisational (i.e. governance mode) and managerial (i.e. TMT reflexivity) factors. Specifically, we argue that the degree of integration with the offshore affiliate and TMT reflexivity each moderate the non-linear relationship between offshoring KIS and innovation in such a way that the positive effects of low levels of offshoring KIS will be stronger and the negative effects of high levels of offshoring KIS will be lower. In addition, we argue that the degree of integration constrains and TMT reflexivity enhances the relationship between offshoring LIS and innovation.

Offshoring is the process of using unaffiliated foreign companies or affiliated offshore entities (AOEs) to manufacture goods or perform services. The Big 4 public accounting firms offshore tax services (Houlder, 2007) and, more recently, have started to offshore audit tasks of their U.S.-based clients to AOEs located in India (Daugherty & Dickins, 2009). While the benefits of offshoring might be substantial, there are also costs associated with moving domestic work to foreign locations. One of these costs may be greater damage awards in lawsuits involving an audit failure where audit tasks were performed overseas as opposed to the United States. This study investigates that possibility by experimentally examining the effect of offshoring audit tasks requiring different levels of judgment on the amount of damages awarded by potential jurors as a result of an audit failure. The results show potential jurors awarded greater damages against the auditor when audit tasks were performed offshore than when they were performed in the United States. There was no effect of the level of judgment of the audit task on damages awarded. Since this study examines offshoring to only one location, India, results may not be generalizable to other offshore locations.

The purpose of this paper is to investigate the effect of the organizational reconfiguration of offshoring on firms’ strategies. A consequence of offshoring is the need to reintegrate the geographically relocated organizational activities into a coherent organizational architecture. In order to do this, firms need a high degree of architectural knowledge, which is typically gained through learning by doing. We therefore argue that firms with more offshoring experience are more likely to include organizational objectives in their offshoring strategies. We develop and find support for this hypothesis using a mixed-method approach based on a qualitative case study and comprehensive data from the Offshoring Research Network. These findings contribute to research on the organizational design and architecture of offshoring and the dynamics of organizational architectures.

The advantages of offshoring are increasingly under scrutiny, and coronavirus disease 2019 (COVID-19) has advanced the debate, calling for a redefinition of firms' production location strategies. While attention has primarily focused on the relocation of second-degree strategies, such as back-shoring, near-shoring and further offshoring, there are also other alternatives, including home country-based domestic product and process innovations, and the development of new business activities. The objective of the authors' paper is to identify which factors influence decision-makers when they select and implement such post-offshoring strategic alternatives.

The authors consider 11 Italian manufacturing companies that implemented these strategies and analyze triggers, drivers, enabling factors and barriers of the decision phase, as well as content, governance mode and timing of the implementation phase.

Based on the collected findings, the authors suggest a set of propositions for further research. First of all, firms can simultaneously manage multiple strategies by adopting an ambidextrous approach through which to mitigate supply chain risks. They may integrate their domestic and international production activities, but the home country remains central for innovations and production of high-end products and Industry 4.0 technologies increases the probability of investing in their home country. At the same time, lack of competence induces selective near- and back-shoring, while full back-shoring is mainly a consequence of managerial mistakes. Competence availability acts as a barrier to relocation in the home country, inducing the implementation of either an insourcing strategy or a combination of insourcing and outsourcing.

The authors' work identifies post-offshoring as a dynamic process and provides insights into the post-pandemic scenario. The conceptual framework may represent a useful tool for company managers in re-evaluating their initial offshoring strategies.

The purpose of this paper is to analyze the offshoring-employment relationship under globalization in Korean manufacturing for the period from 1998 to 2010 using industry-level panel data and Generalized Method of Moments.

For the first time in the literature the type of trade specialization is taken into account, distinguishing manufacturing between export-specialized and import-specialized industries.

There is evidence that materials and services offshoring have a significantly negative effect on employment in export-specialized industries. In contrast, there is a non-significant association in import-specialized industries.

These results may cast new light on the offshoring-employment relationship.

Major contribution of this paper is that it sheds new light on the effect of offshoring on employment by distinguishing export-specialized industries from import-specialized industries.