Theoretical Foundations – Developing Building Blocks of Service Offshoring Typology
This chapter introduces the theoretical background on service offshoring. Since service offshoring is a new topic, we first describe it and differentiate it from related subjects such as manufacturing offshoring. Approaches from the realm of international business research can be successfully applied to the service offshoring phenomenon in general. In particular, we show how research on subsidiary typologies can be used to differentiate service offshoring units. However, existing typologies are found to be inappropriate for our purpose and we conclude that we need to develop a new typology. In addition, we discuss coordination mechanisms and present a classification of these mechanisms – structural, technocratic, output-based, and personal – that will be used for the new typology.
KeywordsForeign Direct Investment Theoretical Foundation Coordination Mechanism Foreign Subsidiary Lower Labor Cost
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