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The purpose of this paper is to examine behavioral changes by consumers (i.e. changing time of day they contact a firm, requesting a domestic service provider, and ceasing doing business with the firm) when faced with being provided a service from abroad.

Data were collected from a pre‐recruited internet panel of 394 American consumers. Hierarchical regression analysis, including demographic and psychographic variables, was employed to determine which variables were instrumental in predicting behavioral changes among consumers when being provided a service from abroad.

The results suggest that American consumers are wary of services offshoring and that psychographic variables (boycott issue importance and negative word of mouth) are more instrumental than demographic variables in predicting behavioral changes by consumers.

Future research should examine consumer attitudes about services offshoring from populations in countries other than the US, and in relation to different types of services and the importance of those services to consumers.

Implications for firms include assessing their customer's perceptions of offshoring, proactively communicating with customers about offshoring practices, and providing customers with some control over their service interactions.

Previous researchers have highlighted the benefits of services offshoring to firms but also hypothesized that consumers may react negatively when provided services from abroad. In this research, it is found that consumers will change the way they interact with a firm when faced with being provided a service from abroad.

This research extends existing services offshoring literature by investigating how the type of information exchanged, technical support or personal billing, in conjunction with country-of-service-origin (COSO) influences consumer likelihood to react negatively (boycott issue importance, NWOM, perceived service quality) to an offshore service exchange.

Structural equations modelling is employed to assess relationships among constructs when country of service origin (New Zealand and the Philippines) and type of service provided (technical support and personal billing services) are varied. Using a scenario-based experimental design we collected 337 responses from a consumer panel across Australia.

Results indicate that both COSO and type of information exchanged affect service sentiment. Overall, consumers feel more negative and more likely to punish a company for offshoring to culturally dissimilar countries such as the Philippines than to culturally similar ones such as New Zealand. However, consumers were more concerned with personal billing services provided from offshore providers than technical support, regardless of COSO.

Practitioners need to understand customer sentiment about services offshoring in general as well as the relationship between service type and country of service origin when designing the global service supply chain.

This study extends theory by applying a multi-dimensional portfolio perspective in examining customer sentiment of offshore services. Understanding the underlying bases of customer concerns and how companies can mitigate negative perceptions allows firms to better manage service offshore strategy.

Despite increasing interest in offshoring of knowledge-intensive services, it is still undetermined as to whether the sourcing of services truly creates the anticipated value for clients. Moreover, even less is known about whether value is created for service providers in the process beyond the general service trade. This lack of knowledge is due to the challenges of capturing value creation, the unique production process of the services, and the impact of offshoring on both value creation and the production process. The purpose of this paper is to study offshored service production processes of knowledge-intensive services in order to identify direct and indirect value creation for clients as well as service providers in the process.

The paper applies a multiple case study method and studies one conglomerate with three offshored service production processes. The chosen method allows for the investigation of the service production process and indirect/direct value creation within the process.

The study finds that there is direct value creation for the client and the service provider towards the end of the production processes as expected. However, more importantly, it finds additional indirect value creation in various production stages. The indirect value is reflected in enhanced understanding of problems and own operations for the client and increased knowledge about clients and problem-solving approaches for the service provider.

This study contributes to offshoring literature by providing a comprehensive understanding of value creation in service offshoring for clients as well as service providers. It also contributes to the service management literature as a study of direct and indirect value creation in services, particularly within the production process of the services.

The study allows practitioners to gain insights on the value creation logic of offshored services and the value created beyond that logic. More specifically, it allows client firms to gain details of various values and benefits of service offshoring and service provider firms to gain a focused perspective on value creation in their own service production that can lead to competitive advantages.

The paper is novel and original through its approach to study offshoring from a value creation logic perspective, including not only the client but also the service provider perspective. It also applies a service production process perspective that is novel in offshoring literature.

A service production system has a structure composed of task execution, agents performing tasks and a resulting service output. The purpose of this paper is to understand how such a service production system changes as a consequence of offshoring.

Drawing on practice theory, the paper investigates how offshoring leads to reconfiguration of the service production system. Through a multiple case methodology, the authors demonstrate how agents and structures interact during reconfiguration.

The paper analyses the reconfiguration of components of a service production system in response to change ignited by offshoring. The authors find recurring effects between structures that enable and constrain agents and agents who shape the structure of the production system.

The paper offers a novel contribution to the service operations management literature by applying practice theory. Moreover, the authors propose a detailed, activity-driven view of service production systems and service offshoring. The authors contribute to practice theory by extending its domain to operations management.

Service production systems have the ability to self-correct any changes inflicted through offshoring of the systems, which helps firms that offshore.

The paper is aimed at service professionals and offshoring managers and proposes a novel presentation of the service production system with a description of how it responds to offshoring. The authors contribute to theory by applying practice theory to the fields of service operations management and offshoring.

The paper seeks to explore the extent of involvement of management accounting in strategic inter‐organizational decisions and control in the context of offshoring of services.

For the present study, a multiple case study field research design was selected. A data‐bank media search identified companies actually offshoring their services. In total, 17 semi‐structured interviews with management accountants/managers were conducted in 14 of the identified companies. The interviews were analyzed using content analysis techniques.

Management accounting is involved in offshoring activities to a much lower extent than expected. The reasons range from contractual agreements between the different parties, which substitute in part for management accounting interventions, to competence problems in accounting departments. Therefore, management accounting often fails to provide support for strategic planning and coordination.

The data obtained through the qualitative research approach have a low‐scaling level, which limits subsequent analysis to descriptive statistics only.

The paper identifies risks and actual problems associated with offshoring, which indicate an increased need for coordinated planning and information processing. Furthermore, it raises the question of how management accounting can overcome existing competence problems with respect to the support of strategic decision making, in order to fulfil its function within the company more efficiently.

Literature does not provide convincing evidence of the practical significance of management accounting in the context of strategic decisions and inter‐organizational relations. This paper shows that management accounting currently remains far removed from its function as a developer of strategic decisions and as a support function for corporate planning and coordination 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.

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.

The purpose of this paper is to examine the impact of economic development on culture and the significance of cultural change on the evolution of offshoring of services and knowledge‐based activities.

The paper offers a conceptual model that links economic development, national cultural predispositions, and the future of offshoring service and knowledge functions. It builds on a range of academic literatures within these core areas to derive a set of propositions that offer insights into the manner in which the relative success and evolution of offshoring service and knowledge work would be impacted by a country's economic development posture and its cultural roots and value systems. The model presented here is also well complemented by examples from real offshoring projects to offer the reader a comprehensive picture of the central propositions put forth.

Several propositions, formulated at the multidisciplinary intersection of service operations management, strategy, and international studies, provide ample opportunities for further discipline‐specific and cross‐disciplinary examination of complex interactions of economic development, culture, and offshoring approaches.

This form of conceptual research provides the basis for more rigorous theory development and testing. The aim of the conceptual analysis was to begin linking nascent research in the area of service and knowledge offshoring to an area of research that examines the links between economic development and culture.

Global operations managers dealing with extended service value chains that include offshore service providers must not only focus on dealing with cultural differences but they must also identify requisite cultural attributes for evolving service center roles.

By integrating perspectives from service operations management, strategy, and international studies, the paper provides new perspectives on offshoring of service and knowledge operations.

The issue of offshore outsourcing of healthcare services is a critical but little‐examined problem in healthcare research. The purpose of this study is to contribute to filling this void.

A library‐based study was carried out of the development of the Indian medical transcription offshoring industry.

Cost‐saving potential and the degree of outsourceability are higher for medical transcription compared with most services. Offshoring experience, typically in a low‐value BPO, helps to enhance productivity and international linkages required for the success of medical transcription.

An important area of future research concerns comparing India's factor endowments in medical transcription outsourcing with other services. Further research is also needed to examine how India differs from its regional competitors in terms of factors endowments associated with these services. Another extension would be to investigate the drivers of offshoring of higher value services such as radiological readings.

ICT infrastructures needed for outsourcing require much less investment compared with leading capital‐intensive industries. The development patterns of the Indian medical and offshoring industries indicate that India may attract higher skilled medical functions in the future. The Indian offshoring industry is shifting its focus from BPO to knowledge process outsourcing (KPO). Developing countries need to shift to greater automation and greater levels of skill training to retain and reinforce their comparative advantages.

This paper's greatest value stems from the fact that it examines the drivers of a new but rapidly growing healthcare industry.

Since the mid‐1990s, offshore production has become increasingly important in white‐collar, service sector activities in the US economy. This development coincided with a stagnant gender wage gap in the service sector and a slowdown in the narrowing of the overall US gender wage gap over this period. This paper aims to categorize white‐collar service sector occupations into two groups based on whether an occupation is at risk of being offshored and to assess the relative contribution of these two groupings, through their employment and wages, to the trends in the gender wage gap within the service sector and the US economy between 1995 and 2005.

Standard occupational decomposition methods are applied to Current Population Survey and Displaced Workers Survey data.

The findings show that in occupations at risk of being offshored, low‐wage women's employment declined, leading to an artificial increase in the average wage of the remaining women thereby narrowing the gender wage gap. This improvement in the gender wage gap was offset by the relative growth of high‐wage male employment in at‐risk occupations and the widening of the gender wage gap within not‐at‐risk occupations.

These findings contribute to the growing literature on the causes of the stagnation of the US gender wage gap in the 1990s.