The Influence of Partner Knowledge Complementarities on the Effectiveness of IT Outsourcing

Despite the importance of knowledge complementarities to inter-firm cooperation, few researchers in information systems (IS) have examined, to date, the construct of knowledge complementarities (KC), and none have examined its role in the success of IT outsourcing alliances. In this paper, we distinguish between potential knowledge complementarities (PKC) and synergistic value, which comprise KC. PKC is conceptualized as a multidimensional construct encompassing knowledge types (similar and specialized) and knowledge domains (business and IT). Further, we examine the extent to which PKC between the client and the vendor promotes success in IT outsourcing alliances. This research also includes relative absorptive capacity because it is relevant when complementary knowledge flows between organizations. We used data from a field study of 81 firms in Korea to test the proposed model. Our findings indicate that each dimension of PKC contributes uniquely to knowledge complementarities. The results also show that PKC is significantly associated with IT outsourcing effectiveness. Relative absorptive capacity is found to be a moderator between PKC and IT outsourcing effectiveness. The theoretical and practical implications of these findings are discussed in the paper.     

Asset specificity's impact on outsourcing relationship performance: A disaggregated analysis by buyer-supplier asset specificity dimensions

Using hierarchical regression analysis on a sample of UK service firms, this study tests the impact of asset specificity on outsourcing relationship performance within a disaggregated methodological framework that allows to discern the specific effects of various buyers and suppliers' individual dimensions of asset specific investments. The results indicate that the impact of asset specific investments on outsourcing relationship performance varies according to the particular specificity dimension examined. While all statistically significant dimensions of buyers' asset specificity have a negative impact on relationship satisfaction, suppliers' human and dedicated asset specific investments exert a positive and significant influence. The results also show that, in three interaction instances, reciprocal specific investments are positively associated with outsourcing relationship performance. These findings have profound theoretical and methodological implications.     

The Impact of Outsourcing Strategies on Information Systems Capabilities in the Hotel Industry

This work analyses the strategy of outsourcing information systems and information technology (IS/IT), considering the different activities comprising the IS/IT area. The literature on IS contains numerous works that analyse outsourcing, very few of which examine the relationship with the different types of capabilities in the IS/IT area and their strategic value. Most works centre on the motives for, and advantages of, the strategy of outsourcing the IS/IT area, while scant attention has been paid to the study of the long-term consequences of outsourcing. This work develops a theoretical model which is applied to the hotel sector and which shows that hotels following a more intensive outsourcing strategy develop fewer managerial capabilities related to knowledge in the management of IS/IT resources. This negative relationship extends to other types of capabilities typical of the area and to certain organisational capabilities. A negative relationship is also observed between the level of outsourcing and the strategic value given to the IS/IT area, which may lead to a lower potential for the development of competitive advantage.     

The moderating effects of service solution characteristics on competitive advantage

The objective of this study is to improve the understanding of the moderating effects of service solution characteristics on competitive advantage of knowledge-intensive business services (KIBS). This study is among the first to systematically operationalize the contingents in the absorptive capacity construct as service solution characteristics, that is, intangibility, heterogeneity, inseparability, and perishability, and tested them in the KIBS sector. Using a sample of 327 new technology-based KIBS firms in Finland, a hierarchical multiple regression analysis is applied to test the hypothesized moderator effects. The results suggest that service solution characteristics moderate the effects of the antecedents on absorptive capacity and the effect of absorptive capacity on competitive advantage. Guidelines are provided to practitioners to deal with projects with different service solution characteristics.     

Environmental management systems: an alternative marketing strategy for sustainability

The purpose of the paper is to shed light on the extent to which environmental management systems such as ISO 14000 standards influence marketing efforts. By examining firms who prefer ISO 14000 standards against those who do not, this research provides a platform for understanding their significance when applied to marketing and seeks to improve environmental marketing strategies. The study empirically tests whether statistically significant differences exist between the two groups on a set of marketing variables. The study uses hierarchical clustering Ward’s method and measurement using squared Euclidean distances to determine the two groups. Discriminant analysis (DA) was used to classify each of the observations into selected groups; and test differences between these groups. Stepwise DA identified customer satisfaction as the best marketing predictor. This research indicates that green market-driven solutions for responsible consumption work best when it is consumer-driven, and consumers derive satisfaction from those results. The results adopts the view that investing in IS0 14000 standards is also highly beneficial for the wider applicability of developing strategies that would help firms make better decisions in marketing.     

The Role of Buyer Trust in Outsourced CRM: Its Influence on Organizational Learning and Performance

Purpose: Company outsourcing of customer relationship management (CRM) functions is increasing (Kalaignanam and Varadarajan 2012). Although outsourcing CRM may provide financial benefits, the tasks of developing and utilizing the complex, cross-functional processes needed to gain enhanced customer knowledge from CRM may be more difficult when some or all CRM activities are outsourced. Trust in the information provided by the outsourced CRM supplier is vital. In this study, the authors examine the influence of buyer trust in its outsourced CRM supplier on cross-functional learning processes and firm performance within the buyer firm.

Methodology: Data were collected from a survey of marketing managers in 221 firms. LISREL 9.2 was used to assess convergent, discriminant, and nomologic validity using the two-step approach (Anderson and Gerbing 1988). Convergent and discriminant validity were evaluated in the measurement model phase, whereas the structural model provided an appraisal of nomologic validity.

Findings: The results provide evidence of buyer firm trust in the outsourced CRM supplier playing a critical role in the buyer firm’s success with information sharing, and both trust and information sharing strongly influencing information interpretation and information access in the buyer firm. All three organizational learning processes positively influence buyer firm customer satisfaction/retention and market performance.

Research implications: An important area for future research is the possibility of varying levels of trust needed for success with outsourced CRM depending on the buyer firm’s goals for its CRM system. It is possible that the simpler CRM functions could be outsourced effectively through efficiency strategies that do not require significant levels of trust, whereas the more complex CRM activities that affect organizational learning require more stringent coordination and inter-organizational development. Varadarajan’s (2009) cost versus quality classifications of outsourcing could be a useful starting point for this type of analysis. Considering the finding in this study that information sharing is critical for information interpretation and information access in the buyer firm, another area for future research is possible differences in the extent of information sharing required by firms that are outsourcing CRM versus those that conduct the CRM function in-house. One starting point could be possible differences in relevance among Maltz and Kohli’s (1996) factors affecting information dissemination.

Practical implications: For effective use of CRM data, it is important for buyer firms to develop trust in their outsourced CRM supplier. Managers can assist in this by communicating qualifications of the outsourced CRM supplier, such as any trade-specific certifications, awards, information about the supplier’s number of years in business, and examples of other companies the supplier has assisted. Managers can also help employees develop confidence in the supplier’s integrity by sharing the supplier’s code of ethics and serving as a champion for the supplier. In addition, firms engaged in outsourced CRM are encouraged to develop reward systems that motivate employees to build relationships with their counterparts in the supplier firm, and it would be useful for the buyer firm to help its employees understand the importance of the CRM outsourcing relationship to the buyer firm’s success. Finally, it is important for management to provide opportunities for interaction between the outsourcing partner and key buyer firm employees who will use the CRM data, to encourage effective processes in information sharing, information interpretation, and information access.

Contribution of the article: This article addresses the significance of outsourcing the CRM function and provides evidence that buyer trust in its CRM supplier is a critical factor in its utilization of CRM data for organizational learning and firm performance. It also demonstrates that effective sharing of information, cross-functional integration of customer data, and CRM information accessibility are critical for firm success.     

A Meta-Analysis of Research on Information Technology Implementation in Small Business

The small business sector is one of the fastest growing sectors of the economy. The firms in this sector are becoming increasingly dependent on information systems (IS) for their operations. Traditional research in IS has primarily focused on large corporations. The problems, opportunities, and management issues encountered by small business in the IS area are unique, and research is too limited to provide useful guidelines. This study compares the research literature on IS implementation and research on IS in small business, examines the commonality and differences, and identifies research gaps. An overall research framework is developed to review the research in the two areas and determine areas of opportunity. As a follow-up of this analysis, a research model is developed to explore the factors influencing the adoption of computer-mediated communication technologies in small business. The model incorporates some of the innovation factors that are identified as potential gaps in the earlier analysis. The research model evaluates the impact of 6 factors-perceived usefulness, cost, compatibility, top management support, competitive advantage, and size-on the adoption of computer-mediated communications technologies. A telephone interview was used to collect data from 207 firms. The results of data analysis reveal that competitive advantage, top management support, and size are important determinants of adoption of computer-mediated communication technologies.     

How professional service firms compete in the market: an exploratory study

Abstract

This study investigates how professional service firms (PSFs) compete in the market. Drawing on strategic marketing literature, a managerial rather than customer perspective is adopted. The study investigates the competitive positions sought by professional service providers and the specific marketing activities actually undertaken to achieve these positions. Thirty-seven depth interviews with senior management from a range of PSFs indicate that firms seek to differentiate themselves by developing long-term relationships, providing better service quality and greater value, and developing brands with strong reputations. Organisations typically seek such interrelated competitive positions simultaneously. A list of marketing activities used by the PSFs to achieve these competitive positions offers practical insights into the specific activities needed to achieve the various competitive positions sought.     

Customer-Perceived Value in Long-Term Buyer–Supplier Relationships: The General B2B Insurance Sector

This article explores the role of customer-perceived value in long-term buyer–supplier relationships. This article aims to identify what creates value for organizational customers, particularly in the field of professional business-to-business (B2B) general insurance services. On the integrated grounds of customer relationship theory in marketing and the resource-based view in strategic management, qualitative research, coupled with interviews, was conducted to explore insights from various representatives of different Vietnamese general insurance firms. The findings suggest that reliability, risk coverage, reputation, technology, interpersonal skills, and technical skills are the six most important types of resources that insurance companies should possess to enhance customer-perceived value.     

Outsourcing: Think more expansively

Outsourcing refers to the practice of a firm entrusting to an external entity the performance of an activity that was performed erstwhile in-house. Although off-shoring and offshore outsourcing to suppliers have dominated much of the recent discussion and debate on outsourcing in scholarly journals and the business press, the nature and scope of outsourcing that does not transcend national boundaries, and outsourcing to entities other than to suppliers is quite substantial. Against this backdrop, a five sources outsourcing framework delineating a broad array of outsourcing avenues available to firms is proposed. For the most part, lowering costs as a motive underlying off-shoring and offshore outsourcing have dominated recent discussion. Furthermore, in the aftermath of the rapid growth in offshore outsourcing in the services sector, the technological forces underlying these developments have been extensively written about. Against this backdrop, the relevance of considerations other than cost in the outsourcing decisions of firms, and the role of technology in automating and thereby either making redundant an erstwhile outsourced activity or performing the activity in-house are discussed.     

Human resource outsourcing: Market and operating performance effects of administrative HR functions

Using event study methodology and two-stage regression analysis on a sample of firms announcing human resource outsourcing (HRO) contracts, this study tests the association between administrative HRO and firm-level capital market and long run operating performance, with archival financial data controlling for endogeneity and outsourcing decision optimality. The results demonstrate that the equity capital market responds positively to client firms announcing administrative HRO, particularly service firms and those outsourcing transactional HR tasks. Additional statistical analysis shows that suboptimal outsourcing is negatively associated with long run operating performance measured as return on assets and operating return on assets. This study contributes to outsourcing literature by more precisely quantifying outsourcing performance through archival financial data and employing capital market empirical tests. Further, it controls for outsourcing decision optimality in examining long run operating performance effects. This research focuses on HR, a critical function within the firm and value enhancing to the firm.     

Appropriability as the driver of internationalization of service-oriented firms

An important factor facilitating the internationalization of product-oriented companies is an appropriability regime allowing a firm to become the sole or dominant provider of specific products. The challenge for service firms is that many appropriability mechanisms, such as patents, are traditionally targeted at protecting tangible products and processes from imitation. In this study, we address this issue and examine the role of appropriability conditions as a facilitator of internationalization in the service sector. The results collected from the analysis of 209 firms suggest that a strong appropriability regime (especially in terms of formal mechanisms) positively affects the internationalization of service industry firms.     

Process and intensity of internationalization of IT firms – Evidence from India

This paper provides insights and evidence related to the process and intensity of internationalization of firms in the Information Technology (IT) sector, which is the driving force of high economic growth in the Indian sub-continent during the last two decades. Research objectives were set as (i) to examine the existence of born global firms in the IT sector, (ii) to identify the process of internationalization adopted by firms in the IT industry, (iii) to measure the intensity of internationalization of IT firms. The paper is based on data collected from annual financial reports of firms listed in the CNX IT Index of National Stock Exchange of India. Two clusters were extracted using hierarchical clustering method followed by k-means clustering to analyze the characteristics of the variables. We find that the firms in both clusters are true global firms with 66 and 85% of their income from foreign markets with a very high level of international intensity. Though the findings provide some evidence for the gradual internationalization of Indian IT firms; the empirical results indicate that firm age has no impact on internationalization. The results from our study also show that firms, especially in certain industries such as IT, do have access to information that reduces the risk aversion.     

Factors of Forecasting:

This study investigates how forecasters view the forecasting process. Forecaster perceptions in industrial firms are found to be remarkably similar to those of forecasters in consumer products firms. Forecasters in service firms are found to be better satisfied overall with the forecasting process than forecasters in manufacturing firms. A factor analysis provides the basic factors of forecasting.     

Assessing the Role of e-Marketing in Contemporary Marketing Practice

Using a sample of 149 firms from the UK and New Zealand, we extend previous research on the nature of contemporary marketing practices by Brodie et al. (1997) to examine the practice of e-Marketing in relation to other aspects of marketing. Analysis reveals four combinations of marketing practice. While one third of firms emphasize either a Traditional Transactional or Traditional Relational approach to their markets, another third practice e-Marketing in combination with Transaction and Database Marketing, and a final third integrate all of Transaction, Database, Interaction, Network and e-Marketing. The findings show that for most firms, the level of e-Marketing practice reflects the extent to which information technology plays either a reinforcing, enhancing or transforming role in the organisation.     

Multichannel marketing: the operational construct and firms’ motivation to adopt

Multichannel marketing has been gaining attention to its importance in both practice and research in the recent years with the rapid diffusion of Information Communication Technology. Due to the relative recency and rapid proliferation of research in the subject, the literature lacks a well-defined construct of multichannel marketing generalizable to different types of firms, and lacks understanding of the actual reasons that firms adopt multichannel marketing. Through comparing and complementing the extant literature with practitioners’ perspectives from interviews with 32 Italian firms, the authors propose a comprehensive and generalizable framework of the multichannel marketing construct, and identify and categorize the firms’ motivations to adopt the multichannel marketing practice. Furthermore, some unforeseen but interesting factors emerged from the interviews. Future research opportunities and managerial implications of the study are discussed.     

The Dynamics of SME Information Systems

The process by which small firms (SMEs) invest in and gain benefit from information systems (IS) is little understood. This paper analyses two alternative models of IS-based strategic change – the Focus-Dominance model (Levy et al., 2001) and stages of growth models as applied to SMEs. An analysis of the outcomes of IS strategy development undertaken for 43 SMEs maps their IS use over time. The analysis supports the Focus-Dominance model, some parts of the stages of growth model and extends the critique of the latter. Further variances are explained by the entrepreneur/owner's values and experience. One structural variable, namely, the industry sector may also explain the variances. The implications for theory and practice are discussed.     

Identifying Client Fairness Criteria in Income Tax Services

Abstract

Organizational justice (i.e., fairness) has been an important construct in the management literature. Employee perceptions of the fairness of outcomes and procedures have been found to have important attitudinal and behavioral consequences. Fairness has more recently been studied in service industries. However, client perceptions of fairness in accounting services have yet to be explored. It is likely that fairness perceptions are particularly salient in income tax return services. In an exploratory study, we sought to identify the types of experiences that trigger these clients' perceptions of fairness. The results suggest some common criteria that can help CPAs and their firms mitigate the potential negative consequences of client perceptions of unfairness. Regression analyses were also used to determine the most significant predictors of client satisfaction with the overall service and global perceptions of fairness.     

Regional Competition in the International Market for Services: A Shift-Share Analysis

ABSTRACT

The volume of services marketed across national borders in recent years has dramatically risen due to increased liberalization and market globalization, on the one hand, and rapid advances in telecommunications and information technology, on the other. The author analyzes the competition among the seven regions of the world for a share in this expanding sector of the international market, doing so over a 15-year period from 1997 to 2012. A shift-share analysis was carried out to identify the winners and the losers in the market during the study period. Results show that six of the seven regions gained some market share. However, the lead winner was the region of Europe and Central Asia that saw its 1997 share grew more than 7-fold by 2012! On the other hand, the North America region, the only loser of all, lost three-fourths of its 1997 market share by 2012. Policy implications of these results for the regions are discussed.     

Liability of informality and firm participation in global value chains

Building on imprinting theory, we formalize the construct ‘liability of informality’, arguing that firms that start operating in the informal sector but later move to the formal sector are less likely to participate directly, and more likely to participate indirectly, in global value chains (GVCs) than those that start out as registered businesses. We further argue that the amount of time spent in the informal sector emphasizes these effects. Using World Bank Enterprise Survey data from 112 developing and emerging economies, we show that informality leaves a strong blueprint on firms, which tends to persist over time.