Offshore BPO decisions and institutional influence on senior managers

Abstract

This paper sets out to explore the drivers and determinants of offshore BPO decisions related to the persistence and particularly the evolution of the captive model. This paper aims to make a contribution by applying institutional theory to individual firm decisions with respect to offshore BPO engagement model. This research utilises a longitudinal case study research method to analyse the institutional influences on senior managers in client companies and their offshore service providers. An institutional theory framework applicable to offshore BPO is extracted from the case studies in the financial services, telecommunications and airlines industries. Institutional theory is shown to have explanatory power for observed macro trends in offshore captive centre models. The implications for management are that successful offshore BPO requires effective action to win legitimacy for offshoring decisions from key stakeholder groups that can exert coercive or normative influences.