Task allocation strategies and motivational processes in advanced services offshoring

Global service firms are increasingly moving advanced tasks to popular offshoring destinations such as India. Despite the significant influence of micro-level motivational mechanisms on the implementation and success of such offshoring strategies, empirical research in this area is still in its early stages. In this paper, taking a grounded theory approach, we present qualitative data from a German electronics firm working with IT developers in a Bangalore subsidiary, and the UK division of a large global professional services firm which has offshored its tax reporting work to a captive unit in Bangalore. From a cross-case analysis of these two settings, we develop a grounded model of the complex interdependencies between offshoring strategies and offshore-onshore motivational processes. We identify three interlocking and self-reinforcing circles between (a) task allocation strategies, (b) motivational processes onshore, and (c) motivational processes offshore. These circles function to either inhibit or support the offshoring strategies. We highlight several theoretical and practical contributions with regard to micro-macro level interdependencies in offshoring strategies of global firms.