Through a longitudinal case study of a financial services company offshoring services to Poland, this paper provides insight into the barriers that prevent offshore team members to learn their tasks effectively. Findings also reveal that using expatriates and inpatriates to facilitate the learning process may in fact act as a double edge sword. While helping bridging the distance between onshore and offshore operation, over-parenting by expatriates may create detachment from the part of offshore members who are then less motivated to think independently and learn. And if inpatriation at first helps create social ties between onshore and offshore colleagues - thereby reducing the risk of onshore colleagues hoarding information - and opens careers opportunities that motivate offshore staff to learn; over time it may create frustrations by making offshoring, and in particular associated status and career path differences, visible to all.
This study shows that firms adjust the scope of activities entrusted to foreign services production units to adapt their knowledge and content protection strategy to the availability of strong legal protection or internal control mechanisms. We hypothesize and empirically confirm that, when the above mechanisms are not available, firms use the substitute protection mechanism of “fine-slicing” foreign value chain activities to exploit the complementarities that exist between tasks and reduce misappropriation hazard. We also find a positive moderating effect of firm country-specific experience and content value on the propensity to use the fine-slicing mechanism.
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