Configurations of Business Process Outsourcing Firms and Organizational Performance

Kirti Sharda and Chatterjee Leena

No WP2009-12-02, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: There is an increasing recognition of outsourcing firms as new organizational forms with unique systems and practices. This paper uses a configurational approach to integrate learnings from outsourcing literature, organization and management theory, strategic management and strategic human resource management in order to understand similarities and differences between outsourcing firms and their performance. It formulates a conceptual framework that proposes that certain combinations of work designs, strategic orientations, client relationships and contexts could lead to better organizational performance within a sample of outsourcing firms. The paper uses principal components factor analysis, Ward.s minimum variance method, K-means cluster analysis, and chi-square to analyze data collected from 60 outsourcing firms across India. Five dominant configurations of outsourcing firms emerge, namely, clear-eyed strategists, adapting professionals, focalizing artisans, conservative controllers and overambitious associates. Further examination with Kruskal Wallis One-Way ANOVA and Tamhane.s T2 test indicates that specific configurations of outsourcing firms are indeed associated with better performance across a variety of organizational performance parameters.

Date: 2009-12-11
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