IMRC 2006 Final

Gl bal Competitiveness
through Outsourcing:
Implications for Services &
Manufacturing
July 13 – 15, 2006 l
IIM Bangalore
Sponsors
PLATINUM GOLD
SILVER

ABOUT THE CONFERENCE
Outsourcinginboththemanufacturingandtheservicesectorshashadalonghistory.What
ismorerecent,however,istheglobalisationofoutsourcing.Awiderangeofactivitiesin
manufacturingandservicesisbecomingincreasinglytradableduetotechnology,theopening
upofforeigndirectinvestments(FDI)andnewkindsoforganisationalarrangements.Further
catalysingthisprocessaretherecentadvancesintheICTsector.Thesedevelopmentshave
collectivelyresultedintheuseofoutsourcingasanimportantelementofcorporatestrategy
inredefiningglobalcompetitiveness.Theyofferimmensepotentialforfirmstocreatenew
value.TheemergenceofnewermarketsinrapidlydevelopingcountriessuchasIndiaand
China have enabled policy makers and firms to deploy these new mechanisms.
Clearly,thisissuemeritsthegreaterattentionofbothresearchersandpractitioners.The
IMRConferenceseekstofulfilthisneedbybringingtogether‘best-inclass’practitioners,
educators and researchers in the field of management to share their knowledge on this
importanttheme.
Objectives
l To provide a forum for management professionals and academics to meet and share
theirknowledge
l To identify and promote excellent research and writing talent among management
academicsandpractitioners
l To enable a large pool of management practitioners and educators to be informed by
andbenefitfromkeyresearchfindingsinthefieldofmanagement
UniqueFeaturesoftheConference
Theuniquenessoftheproposedconferenceliesinthemannerinwhichpapersareselected
forpresentation.TheunderlyingphilosophyoftheIMRConferenceistocarefullyselecta
limitednumberofgoodqualityresearchpapersandprovidesufficienttimeforthespeakers’
presentationsandforaudienceinteraction.Therefore,paperpresentationintheconference
ismainlybyinvitation.Whileauthorsmakepresentationsoftheirworkattheconference,
delegates take part in the entire proceedings and have the opportunity to discuss the
researchfindingswiththeauthorsandotherparticipants.
StructureofSessionsintheConference
Theconferenceseekstobalancetheperspectivesofbothpractitionersandresearcherson
thethemeofOutsourcing.
l There are 9 academic sessions in the conference that facilitate sharing of research
issuesinOutsourcing.Duringthesesessions,37papersthatbringmulti-dimensional
researchperspectivesontheconferencethemewillbepresented.
IMR Conference 2006 1

l Tocomplementtheacademicsessions,therearespecialsessionsorganisedtobringin
practitionerperspectivestotheconferencethemes.Theseinclude:
w Inauguration by Shri N. S. Raghavan, Co-founder, Infosys Technologies and
Nadathur Investments and Holdings.
w CEO Symposium on ‘Beyond Cost Arbitrage: Emerging Paradigms for Sustaining
Competitive Advantage in Outsourcing’, the participants being, Mr. Arindam
Banerrji, MD & COO, Deutsche Bank Operations International, Mr. Amitabh
Chaudhry, Managing Director & CEO, Progeon, Mr. T. K. Kurien, CEO, Wipro BPO,
Mr.C.S.Murali,VPCorporateInitiatives,CognizantTechnologySolutions,and
Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup.
w Plenary Sessions by Mr. Vikram D Rao, President, Madura Garments and Mr. Joe
Sigelman,Co-President,OfficeTiger
w PanelDiscussionon‘GlobalCompetitivenessthroughOutsourcing’,thepanellists
being, Mr. Ravan Boddu, CEO iSoft India, Mr. Anil Kumar Chowdhary, COO, First
Indian Corporation, Mr. Gopal Krishnan, CEO, Ninestars and Mr. Sanjoy Roy
Choudhury,AssistantVicePresident,Evalueserve.
ABOUT THE CONFERENCE
2 IMR Conference 2006

ProgeonLtd.
26/3,26/4and26/6,ElectronicsCity
Hosur Road, Bangalore - 560 100, India
Tel : +91 80 2852 2405
Fax : +91 80 2852 2411
Url : www.progeon.com
Wipro BPO
Corporateoffice
WiproTechnologies,DoddakannelliSarjapurRoad
Bangalore - 560 035
Tel : +91 80 28440011
Fax : +91 80 28440256
Url : www.wipro.com
Value Leadership Group
Headquarters
107GrandStreet,6thFloor
New York, NY 10013, USA
Tel : +1 (917) 825 4007
Fax : +1 (212) 941 0442
Url :www.value-leadership.com
IndianOffice
PaharpurBusinessCentre
NehruPlaceGreens
New Delhi - 110 019, India
Tel : +91 11 2620 7433
Fax : +91 11 2620 7606,
2620 7575
Cognizant Technology Solutions
World Headquarters
500 Glenpointe Centre West
Teaneck, NJ 07666
Tel : 201-801-0233
Fax : 201-801-0243
TollFree:1-888-937-3277
Url : www.cognizant.com
Chennai
226 Cathedral Road
Chennai-600086,India
Tel : +91 44 28113063,
28116033
Fax : +91 44 28112622,
28112507
OfficeTiger
An RR Donnelley Company
6thFl,SpencerPlaza,PhaseII
769 Anna Salai, Chennai - 600 002
Tel : +91 44 2849 8050
Fax : +91 44 2849 8053
Url :www.officetiger.com
Ninestars Information Technologies Ltd.
Corporate Office: Bangalore
#37,KasturbaRoadCross,OffLavelleRoad,
Bangalore-560001,Karnataka,India
Tel : +91 80 22123881 / 2; 41121123 / 46
Fax : +91 80 22123881 / 2
E-mail:corporate@ninestar.co.in
Url :www.ninestar.co.in
Indian Institute of Management Bangalore
Bannerghatta Road, Bangalore - 560 076, India
Tel : +91 80 2658 2450
Fax : +91 80 2658 4050
Url :www.iimb.ernet.in
SPONSORS

CONFERENCE ADMINISTRATION
1. ProfessorPGApte,Director,IIMB(Chair)
2. ProfessorMukulAsher,NationalUniversityofSingapore
3. ProfessorJagadishBhagwati,ColumbiaUniversity
4. Mr. Pramod Bhasin, Genpact
5. Mr.KiranKarnik,Nasscom
6. Mr.PeterSchumacher,ValueLeadershipGroup
7. ProfessorRajanVaradarajan,TexasA&MUniversity
8. ProfessorGuyFitzgerald,BrunelUniversity
9. ProfessorLeslieWillcocks,UniversityofMelbourne
10.ProfessorRobertKennedy,UniversityofMichigan
Advisory Committee
1. ProfessorRupaChanda,IIMB(Chair)
2. ProfessorAbhoyOjha,IIMB(Co-chair)
3. ProfessorB.Mahadevan,IIMB
4. ProfessorVVenugopal,NyenrodeBusinessSchool,TheNetherlands
5. Mr.SrikantKolhar,ResearchScholar,IIMB
6. Mr.AshutoshKumarSinha,ResearchScholar,IIMB
7. Ms.HariniSrinivasan,IIMB
8. Ms. K R Usha, IIMB
Organising Committee
1. ProfessorB.Mahadevan,IIMB(Chair)
2. ProfessorRupaChanda,IIMB(Co-chair)
3. ProfessorSouravMukherjee,IIMB
4. ProfessorAbhoyOjha,IIMB
5. Dr.VPKochikar,Infosys
6. ProfessorYLRMoorthy,IIMB
7. ProfessorMuraliPatibandla,IIMB
9. Mr.SrinivasGunta,ResearchScholar,IIMB
10.Mr.SunilKumarSingh,ResearchScholar,IIMB
11.Ms. K R Usha, IIMB
Academic Affairs Committee

CONFERENCE ADMINISTRATION
1. Ms.KRUsha,IIMB(Chair)
2. Ms.HariniSrinivasan,IIMB(Co-chair)
4. Mr.MVMahesh,ResearchScholar,IIMB
5. Mr.AshutoshKumarSinha,ResearchScholar,IIMB
6. ProfessorB.Mahadevan,IIMB
7. ProfessorRupaChanda,IIMB
8. ProfessorGopalNaik,IIMB
9. Ms.GShashikala,IIMB
10.Ms.PriyaVivek,IIMB
Conference Logistics Committee

Mr. Arindam Banerrji
Mr.ArindamBanerrjiisChiefOperatingOfficer,DeutscheBankOperationsInternationalin
BangaloreandMumbai.Priortothis,hewasDB’sRegionalCIOforIndia,responsibleforthe
IndiaSmartsourcingInitiativeandtheGTOfunctions.ACharteredAccountant,hebeganhis
careerintheShippingDivisionofLarsen&Toubro.HespentseveralyearswithJPMorgan
invariouscapacitiesinFinance,TechnologyandOperations,andwasresponsibleforsetting
uptheGlobalServiceCentreofJPMC.
Mr. Ravan Boddu
Mr. Ravan Boddu is CEO, iSOFT India, iSOFT being the largest healthcare IT company in
Europe. He has a BE from REC, Allahabad, and an MTech in Computer Science from Osmania
University,Hyderabad.Startinghiscareerin1987withUshaComputersinDelhi,heworked
with KPMG in the UK, and WorldCom, Dell and HomeGrocer.com in the US before returning
toIndiatosetupiSOFT’soperations.
Mr. Amitabh Chaudhry
Mr.AmitabhChaudhryisManagingDirector&CEOofProgeon,theBPOsubsidiaryofInfosys
Technologies.Priortothis,hewasheadoftheinvestmentbankingfranchiseforSouthEast
AsiaandstructuredthefinancepracticeforAsiaatCreditLyonnaisSecuritiesinSingapore.He
holdsabachelor’sdegreeinengineeringfromtheBirlaInstituteofTechnology&Science,
Pilani,andanMBAfromtheIndianInstituteofManagement,Ahmedabad.
Mr. Anoop Hegde
Mr.AnoopHegdeisCountryManager,FirstIndianCorporation,whichsupportstheoperational
efficiencyandoffshoreinitiativeoftheFirstAmericanCorporationandoffersspecialised
servicesinsoftwaredevelopment,testingandmaintenanceaswellastheITESspace.Prior
to joining FIC in 2002, he was General Manager, VeriFone India. He has also worked in
variouscapacitiesatWipro. HehasaBComfromSt.AloysiusCollege,Mangalore,andisa
FellowoftheInstituteofCharteredAccountantsofIndia.
Mr. Gopal Krishnan
Mr.GopalKrishnan,isFounder,ChairmanandManagingDirectorofNinestarsInformation
TechnologiesLimited,adigitisationcompanyprovidingstate-of-the-artarchivalsolutions
todeliverdigitisedcontenttointernationallyrecognisedTier1newspapers.HeholdsaBSc
fromLoyolaCollege,ChennaiandanMAinHumanResourcesfromtheUniversityofChennai.
Hewasaparticipantinthe‘DrivingStrategicInnovation’programmeintheIMD/MITSloan
SchoolofExecutiveEducation.
Mr. T K Kurien
Mr. T K Kurien is CEO of Wipro BPO which provides a broad range of services from CRM to
industry-specificsolutions.HewaspartoftheWiproBPObusinessdrivingthetransaction
processingbusinessinitiative.HewasearliertheCFOofWiproGEMedicalSystemsandCEO
ofGEXRay.
BIOGRAPHICAL SKETCH OF CHIEF GUESTS,
PLENARY SPEAKERS AND PANELLISTS

Mr.CSMurali
Mr.CSMuraliisVicePresident,CorporateInitiatives,atCognizantTechnologySolutions,
wherehedrivescorporateinitiativesinmarketingandorganisationaldevelopment.Priorto
joiningCognizant,hewasapartneratConnectCapital,aventurecapitalfirmfocusedon
softwareandBPOsectors.Asanindependentconsultant,hehasadvisedlargeUScorporations
onITandBPOoutsourcingstrategies.HestartedhiscareeratTCSwherehespent15years
invarioustechnical,salesandmanagementpositions.
Mr. Nadathur S Raghavan
Mr.NadathurSRaghavan,entrepreneurandphilanthropist,waspartofthefoundingteam
ofInfosysTechnologiesandhasworkedinvariouscapacitiesinhis19yearsatInfosys.He
retiredasJointMDin2000topursuehisvisionofpromotingentrepreneurshipandIndia-
based global companies. To this end he co-founded Nadathur Holdings & Investments and
helpedsetuptheNSRaghavanCentreforEntrepreneurialLearning(NSRCEL)atIIMBangalore.
Inaddition,heactivelycontributestoactivitiesthataresociallyinclinedandholdsnon-
executivepositionsinvariousorganisations.
Mr. Vikram D Rao
Mr.VikramDRaobeganhiscareerasaManagementTraineeinMaduraCoats.Hejoinedthe
AVBirlaGroupin1999inhiscurrentpositionasGroupExecutivePresidentofFabricsand
ApparelBusiness,GrasimIndustriesLimited,reportingtotheChairmanofAVBGroup.He
wasawardedtheSuperAchieverAwardbytheIndiraGroupofInstitutes,PuneinOctober
2003.
Mr. Sanjoy Roy Choudhury
Mr.SanjoyRoyChoudhuryisanAssistantVicePresidentatEvalueserve,aglobalresearch
servicesorganisationthatprovidesbusiness,marketandinvestmentresearch,dataanalytics
andintellectualpropertyservicestoclientsaroundtheworld.Heiscurrentlymanagingthe
operationsofthecompanyintheareaofinvestmentresearch.Heisactivelyinvolvedin
campusrecruitmentaswellasnewinitiativesintheknowledgeprocessoutsourcingindustry.
Mr. Peter Schumacher
Mr. Peter Schumacher is Founder, President & CEO of the Value Leadership Group, an
independentmanagementconsultingfirm.WithofficesintheUSA,Europe,andIndia,the
ValueLeadershipGroupdevelopsglobalisationstrategiesforlargecompanies.Heholdsan
MBAfromtheLeonardN.SternSchoolofBusinessatNewYorkUniversity.
Mr. Joe Sigelman
Mr.JoeSigelmanisCo-President,OfficeTiger.Priortoco-foundingOfficeTiger,heworked
withGoldmanSachsInternationalinLondonintheInvestmentBankingDivisionfocusing
onrealestate,serviceandhealthcareinvestmentsthroughoutEurope.AgraduateofPrinceton
University’sWoodrowWilsonSchoolofPublicandInternationalAffairsandtheHarvard
Business School, he began his career with Lazard Frères, New York. He is a recipient of
BusinessWeek’sannualStarofAsiaAwards,2006.
BIOGRAPHICAL SKETCH OF CHIEF GUESTS,
PLENARY SPEAKERS AND PANELISTS

09:00-12:00 ArrivalofParticipants
12:00-14:00 ConferenceRegistration
14:00-16:30 CURTAIN RAISER TO THE CONFERENCE – CEO SYMPOSIUM
Beyond Cost Arbitrage: Emerging Paradigms for Sustaining
Competitive Advantage in Outsourcing
Mr.ArindamBanerrji,MD&COO,DeutscheBankOperationsInternational
Mr.AmitabhChaudhry,ManagingDirector&CEO,ProgeonLtd.
Mr.T.K.Kurien,CEO,WiproBPO
Mr.C.S.Murali,VP,CorporateInitiatives,CognizantTechnologySolutions
Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup
17:00-19:00 ConferenceInauguration
Shri Nadathur S Raghavan, Co-founder, Infosys Technologies
and Nadathur Investments and Holdings
19:30-21:00 InauguralDinner
09:00-10:30 ParallelSessionA1
IS OUTSOURCING HERE TO STAY? SOME PERSPECTIVES
09:00-10:30 Parallel SessionA2
OPPORTUNITIES IN KNOWLEDGE-INTENSIVE DOMAINS
10:30-11:00 CoffeeBreak
11:00-13:00 ParallelSessionB1
SMEs AND OUTSOURCING
CHALLENGES IN OUTSOURCING
13:00-14:00 LunchBreak
14:00-16:00 ParallelSessionC1
TRADE AND INVESTMENT ISSUES
NICHE AVENUES FOR OUTSOURCING
Thursday, July 13, 2006
DAY1
Friday,July14,2006
DAY2
SCHEDULE

COMPARATIVE ASPECTS OF OUTSOURCING
16:30-18:00 PlenarySession-1
Mr. Vikram Rao, Pesident, Madura Garments
19:00-22:00 CulturalProgrammebyPuthaliKalarangafollowedby
ConferenceDinner
Mr.JoeSigelman,Co-President,OfficeTiger
11:00-13:00 ParallelSessionD1
IMPLICATIONS OF OUTSOURCING
ISSUES FROM SERVICE-PROVIDER INDUSTRIES
14:00-15:30 PanelDiscussion:
GLOBAL COMPETITIVENESS THROUGH OUTSOURCING
Mr.RavanBoddu,CEO,iSoftIndia
Mr.AnoopHegde,CountryManager,FirstIndianCorporation
Mr. Gopal Krishnan, Founder, Chairman and Managing
Director,NinestarsInformationTechnologiesLimited
Mr.SanjoyRoyChoudhary,AssistantVicePresident,
Evalueserve
Note:Thefour parallelsessionsforpaperpresentationaredenotedasA,
B,C&D inthetable
SCHEDULE
Saturday, July 15, 2006
DAY3

09:00-12:00 ArrivalofParticipants
12:00-14:00 ConferenceRegistration
14:00-16:30 CURTAIN RAISER TO THE CONFERENCE–CEO SYMPOSIUM
Beyond Cost Arbitrage: Emerging Paradigms for Sustaining
Competitive Advantage in Outsourcing
Mr.ArindamBanerrji,MD&COO,DeutscheBankOperationsInternational
Mr.AmitabhChaudhry,ManagingDirector&CEO,ProgeonLtd.
Mr.T.K.Kurien,CEO,WiproBPO
Mr.C.S.Murali,VP,CorporateInitiatives,CognizantTechnologySolutions
Mr.PeterSchumacher,Founder,President&CEO,ValueLeadershipGroup
17:00-19:00 ConferenceInauguration
ShriNadathurSRaghavan,Co-founder,InfosysTechnologies
and Nadathur Investments and Holdings
19:30-21:00 InauguralDinner
IS OUTSOURCING HERE TO STAY? SOME PERSPECTIVES
Thursday, December 16, 2004
DETAILED SCHEDULE
Thursday, July 13, 2006
Friday,July14,2006
1.RajanVaradarajan,Texas
A & M University, USA
2. Rupa Chanda, Indian
InstituteofManagement
Bangalore
3. Ananda Mukherji and
Jyotsna Mukherji, Texas A & M
InternationalUniversity,USA
ComparativeAdvantage,Competitive
Advantage,CompetitiveImperative
andGlobalOutsourcing
GlobalOutsourcingofServicesand
DevelopmentinDeliveryCountries
OutsourcingasaSelf-Correcting
Phenomenon: A Gaia Hypothesis
Perspective

DETAILED SCHEDULE
OPPORTUNITIES IN KNOWLEDGE-INTENSIVE DOMAINS
1. Jason M Pattit1
, S.P. Raj2
and
David Wilemon1
, Snyder Centre
for Innovation Management1
;
CornellUniversity2
2. K.Momaya,IndianInstituteof
Technology,Delhi
3. K. Manasa and Kailash B L
Srivastava,WiproTechnologies,
Bangalore;IndianInstituteof
Technology,Kharagpur
OutsourcingR&D:TheNextFrontier
R&D / Knowledge Process
Outsourcing from Japan: An
UnexploredCompetitiveness
Opportunity?
BusinessProcessOutsourcing:
Knowledge Management as a
CompetitiveStrategy
SMES AND OUTSOURCING
1. Pradeep Mukherjee1
, Abhijit
Chaudhary2
and Nishant Verma1
Tholons,Bangalore1
;Bryant
University,RhodeIsland2
2. Shameen Prashantham and
Naveen Marimuthu, University
ofStrathclyde,UnitedKingdom;
MindtreeConsulting,Bangalore
3. U. Srinivas Rangan and Peter
Schumacher, Babson College,
USA;ValueLeadershipGroup
4. Jogendra Nayak, Gautham
Sinha and Kalyan K Guin,
IndianInstituteofTechnology,
Kharagpur
BPO Adoption by Small and Medium
Enterprises:AnInnovation-based
Approach
ShiftsinKnowledge-Intensityand
SMEInternationalisation:Diversifying
fromSoftwareServicestoProducts
EntrepreneurialGlobalisation:Lessons
fromtheExperiencesofEuropean
SmallandMediumEnterprises
ThePerceivedImpactofOutsourcing
on Small and Medium Industries

DETAILED SCHEDULE
Friday,July14,2006
1. Sandhya Shekhar and L.S.
Ganesh,IndianInstituteof
Technology,Madras
2. SrinivasAinavolu,Indian
InstituteofManagement,
Calcutta
3.SuveeraGill,University
BusinessSchool,Panjab
University
4. B.R. Bhardwaj1
, Sushil2
and
K. Momaya2
, Bharati Vidyapeeth
Institute of Management and
Research1
;IndianInstituteof
Technology,Delhi2
Benchmarking Knowledge Gaps for
AssessingOutsourcingViability
LeveragingOutsourcing–Performance
ofandImplicationsforIndianIT
ServicesIndustry
OutsourcingandTransferPricing
Challenges
CorporateEntrepreneurshipModel:A
SourceofGlobalCompetitiveness
CHALLENGES IN OUTSOURCING
TRADE AND INVESTMENT ISSUES
1. Arpita Mukherjee and
Paramita Deb Gupta, Indian
CouncilforResearchon
InternationalEconomicRelations
2.T.J.Joseph,ICFAIInstitute
for Management Teachers (IIMT)
3. Peter D Ørberg Jensen,
Copenhagen Business School,
Denmark
IndoUSFTA:ProspectsforIT-Enabled
/BPOServices
SpilloversfromForeignDirect
InvestmentandAbsorptiveCapacity
ofFirms:EvidencefromIndian
ManufacturingIndustryafter
Liberalisation
Offshoring in Europe — Evidence of a
Two-way Street From Denmark

DETAILED SCHEDULE
NICHE AVENUES FOR OUTSOURCING
1. Priyan R Naik, Larson and
ToubroLimited
2. Sanjay Choudhari1
, Venkata
Reddy Muppani2
, Arunabh
Prasad Gupta2
and Ashutosh
Garg2
,NationalInstituteof
Construction Management and
Research, Pune1
; IIT, Bombay2
3. Bala Krishnamoorthy and
Varun Nagalia, Narsee Monjee
InstituteofManagementStudies,
Mumbai
4. D.K. Agrawal and Sangeetha
Chhabra,ForeSchoolof
Management, New Delhi; Lal
BahadurShastriInstituteof
Management
Dealership-ASingularRouteto
Outsourcing
Building Competencies through
Maintenance Outsourcing: ACase
Study of an Indian Glass Company
CompetitiveStrategiesfor
OutsourcinginHealthcareIndustry
Outsourcing3PLServices:A
Measurement of Indian Corporate
Mindset
COMPARATIVE ASPECTS OF OUTSOURCING
1. Naresh K Malhotra1
, James
Agarwal2
, Francis M. Ulgado1
and G Shainesh3
, Collegeof
Management,GeorgiaInstituteof
Technology1
;Universityof
Calgary,Canada2
;IndianInstitute
of Management Bangalore3
DifferencesinServiceQualitybetween
DevelopedandDevelopingCountries:
How Developing Countries Can
ImprovetheirCompetitivenessinthe
OutsourcingofServices
4. Sadhana Srivastava and
RahulSen,National
UniversityofSingapore;
InstituteofSoutheastAsian
Studies,Singapore
Production Fragmentaion and
Outsourcing:ImplicationsforIndia’s
GlobalTradeIntegration

DETAILED SCHEDULE
Friday,July14,2006
Mr. Vikram Rao, President, Madura Garments
19:00-22:00 CulturalProgrammebyPuthaliKalarangafollowedbyConference
Dinner
Mr.JoeSigelman,Co-President,OfficeTiger
IMPLICATIONS OF OUTSOURCING
2. Van V. Miller and Ananda
Mukherji, HumanandEcological
Resources,LosOjos;TexasA&M
InternationalUniversity
3.ManojT.Thomas,Instituteof
Rural Management Anand
4. Prarthan B Desai, Indian
Bangalore
Mexican Maquilas and Indian BPOs: A
CriticalComparison
UnderstandingUrbantoRural
OutsourcinginIndia:Basisand
Potential
IdentificationTowardsClientsin
EmployeesofOutsourcingService
Providers
1. Amarendu Nandy and Mukul
G.Asher,NationalUniversityof
Singapore
2. Gulnar Sharma and Sanjay
Kaptan,JankideviBajajInstitute
of Manangement, Mumbai
Demographic Complementarities and
Outsourcing:ImplicationsforIndia
BPO and Employment Scenario in the
Indian Economy

DETAILED SCHEDULE
1. Gyan Prakash and Avantika
Singh,TezpurCentralUniversity;
TERISchoolofAdvancedStudies,
New Delhi
2. Vasanthi Srinivasan and
Bineesh Kumar P, Indian
Bangalore
3. Abhishek Amal Sanyal, HSBC
GlobalTechnology,Pune
4. SajalKabiraj1
,D.P.Agrawal2
and Deepali Singh1
, ABV Indian
InstituteofInformation
Technology and Management,
Gwalior1
;Member,UPSC,Govt.of
India2
5. Akash Prasad and Vivek
Rathore,NALSARUniversityof
Law,Hyderabad
OutsourcingofHealthcareServicesin
Rajasthan:AnExploratoryStudy
Software Product Development
Transition:ManagerialImplications
fromaSubsidiaryPerspective
ReverseOutsourcingthroughHybrid
SourcingTM
andItsEffectontheGlobal
DeliveryModel
Managing Strategic Change through
OutsourcinginLogisticsCompanies:A
SwedishPerspective
IndiaInc.’sClaimtotheInternational
DisputeResolutionMarket
ISSUES FROM SERVICE-PROVIDER INDUSTRIES
3. Arti Grover Goswami, Delhi
SchoolofEconomics
4.SrinivasGunta,Indian
Bangalore
5. Sourav Mukherji, Indian
Bangalore
TheWelfareImplicationsof
OutsourcingintheHostCountry
Co-locationofUnrelatedDivisionsin
theITES-BPOIndustry:Dynamicsof
ValueCreationandDestruction
Outsourcing:PracticeinSearchofa
Theory

DETAILED SCHEDULE
14:00-15:30 PanelDiscussion:
GLOBAL COMPETITIVENESS THROUGH OUTSOURCING
Mr.RavanBoddu,CEO,iSoftIndia
Mr.AnoopHegde,CountryManager,FirstIndianCorporation
Mr. Gopal Krishnan, Founder, Chairman and Managing
Director,NinestarsInformationTechnologiesLimited
Mr.SanjoyRoy Choudhary,AssistantVicePresident,
Evalueserve
Note:Thefour parallelsessionsforpaperpresentationaredenotedasA,B,C
&D inthetable

RajanVaradarajan, DistinguishedProfessorofMarketingandFordChairin
Marketing & E-Commerce, Department of Marketing, Mays Business School,
TexasA&MUniversity.
Ph: 979-845-5809, Fax: 979-862-2811, Varadarajan@tamu.edu
Based on the chatter in the business press and the general news media, one might be
inclinedtoviewoutsourcingasverymucha21stcenturyphenomenon,largelylimitedto
businessprocessoutsourcingandtakingplaceforthemostpart,intheurbancentresofthe
DeccanPlateauofIndia—Bangalore,Chennai,HyderabadandMumbai.Further,relativeto
earlierwavesofoutsourcing,suchastheoutsourcingofmanufacturingofgoodsduringthe
1980sand1990s,thecurrentwaveofoutsourcingofperformanceofservicesseemstohave
generated much more backlash, outcry and resentment. Some attribute this to the less
educatedandlessvocalblue-collarworkersinindustrialisedcountrieshavingbeenaffected
byoffshoreoutsourcinginthemanufacturingsectorduringthe1980sand1990sversusthe
bettereducatedandmorevocalwhitecollarworkersandprofessionalsinindustrialised
countriesbeingaffectedbythecurrentwaveofoffshoreoutsourcingintheservicesector.
Whenoutsourcingmanifestsassubstitutionoflabourwithtechnology,itiswidelyviewed
asamarkoftechnologicalprogress.Casesinpointincludemoderndayautomatedtelephone
exchanges performing tasks that were earlier performed by telephone operators, and
automated teller machines performing tasks that were performed by human tellers. When
outsourcingmanifestsasacustomerperformingtasksthatwereearlierperformedbythe
firm,itischaracterisedas‘customerparticipation/involvementintheco-productionof
service’andspawnsanewfieldofacademicinquiry.Forinstance,airlinecustomers,in
additiontomakingreservationson-line,performingrelatedtaskssuchasseatselection
andpre-printingofboardingpassathomeorwork,beforeheadingtotheairport(outsourcing
tocustomers).Understandably,inthefaceofincreasingjetfuelprices,limitstolowering
labourcosts,intensecompetitionthatlimitstheabilityofairlinestoraiseprices,outsourcing
tootherfirmsandtocustomersbecomesacompetitiveimperative.Againstthisbackdrop,
the paper focuses on the comparative advantage, competitive advantage and competitive
imperativeaspectsoftheglobaloutsourcingofmanufacturingofgoodsandperformanceof
services.
COMPARATIVE ADVANTAGE, COMPETITIVE
ADVANTAGE, COMPETITIVE IMPERATIVE AND
GLOBAL OUTSOURCING
COMPARATIVE ADVANTAGE, COMPETITIVE
ADVANTAGE, COMPETITIVE IMPERATIVE AND
GLOBAL OUTSOURCING

GLOBAL OUTSOURCING OF SERVICES AND
DEVELOPMENT IN DELIVERY COUNTRIES
Rupa Chanda, Professor of Economics, Indian Institute of Management,
Bangalore.
rupa@iimb.ernet.in
Thispaperexaminestheimplicationsofglobaloutsourcingofservicesforvariousaspects
ofeconomic,social,andhumandevelopmentinselecteddeliveryeconomiesinAsia,namely,
Philippines,China,andIndia.Thepaperisasynthesisofthefindingsacrossthesethree
countriesandprovidesacomparativeperspectiveontheimpactofservicesoutsourcingon
theseeconomies.Theanalysisisbasedonaprimarysurveyandin-depthinterviewsconducted
ineachofthethreetargetcountriesintheJanuary2005-February2006period,supplemented
byinformationavailablefromvarioussecondarysources.
Therearebroadlythreepartstothepaper.Thefirstpartdrawsupontheevidenceobtained
fromtheprimarysurveyandin-depthinterviewstohighlightthemaincharacteristicsof
theservicesoutsourcingindustryinthethreecountries,i.e.,thetypesofservicesoutsourced
andsectorswhereoutsourcingoccurs,thenatureofthisoutsourcedworkacrossthevalue
chain,thegeographicprofileofoutsourcing,thecharacteristicsofdeliveryfirmsinterms
oftheirsize,diversificationofactivities,employment,features,ownershipstatus,and
modeofexecution,amongothers.Thissectionalsohighlightsthemainfacilitatorsand
constraintstoservicesoutsourcinginthethreecountries.Corroboratingdatatablesand
simplecorrelationanalysisacrosskeyvariablesareprovidedtovalidatethediscussionand
toshedfurtherinsightontheprofileofthisindustryineachcountryandtodrawcomparisons
acrossthethreecountries.
Thesecondpart,whichconstitutesthecoreoftheanalysisinthispaper,assessesthe
impactofservicesoutsourcingonawiderangeofparameters.Someofthemaindimensions
ofdevelopmentthatareaddressedinclude:directandindirectemployment;incomes;skill,
knowledge,andtechnologytransfer;domesticandforeigninvestment;infrastructure;social
andculturalnorms;occupationalhealth,andinter-sectoralresourceallocation.Corroborating
datatablesaswellascorrelationanalysisareprovidedtohighlightthenatureoftheimpact
ineachcountryandtohighlightsimilaritiesanddifferencesacrossthethreecountries.
Thefinalsectiondrawsupontheanalysisintheprecedingsectionsaswellasthesurvey
andinterviewresultstosuggestpoliciesrequiredatvariouslevelstonotonlyfacilitatethe
growthoftheservicesoutsourcingindustryinthesethreecountries,buttoalsomakethis
growthconducivetorealisinglongtermsocial,economic,andhumandevelopmentobjectives
inasustainableandequitablemanner.

OUTSOURCING AS A SELF-CORRECTING
PHENOMENON: A GAIA HYPOTHESIS PERSPECTIVE
AnandaMukherji, AssociateProfessorofManagement,Dept.ofManagement,
MarketingandInternationalBusiness,CollegeofBusinessAdministration,
TexasA&MInternationalUniversity,USA.
Ph: 956-326-2526, Fax: 956-326-2494, max@tamiu.edu
Jyotsna Mukherji, Assistant Professor of Marketing, Department of
Management, Marketing and International Business, College of Business
Administration,TexasA&MInternationalUniversity,USA.
Ph: 956-326-2542, Fax: 956-326-2494, jyo@tamiu.edu
Inourpaper,webrieflyexamineoutsourcingfromthetraditionaltransactioncosteconomics
(TCE)perspective.Wethenexaminetheforcesthatdriveglobalisation.Wepresentoutsourcing
fromtheGaiaself-regulatinghypothesisperspective.Wearguethatwiththephenomenonof
outsourcing,asetofinterdependentforcesisreachingacriticalmass.Thiswillresultinunintended
outcomesthatgofarbeyondacompany’sintenttoreducecosts.
Therearetwoimportantfactorsthatexplainglobalisation,whichinturnfacilitatesoutsourcing.
Thefirstarefourdrivers–expandingmarkets,pressuretolowercosts,increasedcompetition,
andactivistgovernments.Thesecondistheincreasedlevelsofservice-relatedoutsourcing,
whichisenabledbytechnologiesanddigitalisation.Withemploymentinthedevelopedeconomies
beingpredominantlyintheservicesector,thereisconsiderableeconomicandpoliticalconcern
aboutthelong-termimplicationsofservicejobsmovingtodevelopingcountries.
We propose a different, though complementary perspective to the current outsourcing
phenomenon.TheanalogyweuseistheGaiaself-regulatinghypothesis.Theprocessofself-
regulationiscentraltotheGaia‘livingearth’hypothesiswheretheearthisseenasatightly
coupledselfregulatorysystem.Outsourcingispartofaseriesofinterconnectedforcesthatisfar
morethantheobviousoptimisationofcosts.
Theinterconnectedforcesindevelopingcountries,likeIndiaandChina,thathavebeensupporting
andfacilitatingoutsourcing, includetheagedemographicsthatsupportaproductiveworkforce,
educationallevels,risingaspirations,apost-postcolonialmindsetofthepopulace,improved
infrastructure,andcoherentgovernmentalpolicies,amongothers.However,wecontendthat
theremaybeanumberofunintendedconsequences,whichweexplore.Incomelevelsindeveloping
countrieslikeIndiaandChinaarelikelytorise,makingthemattractivemarketswithdisposable
incomes.Wealsoforeseeafallinincomelevelsandconsumptionindevelopedcountries.The
currentpatternofconsumptionisextremelyskewedwiththedevelopedworldconsumingata
disproportionaterate.Theunintendedself-correctionthatresultsfromoutsourcingwillbalance
thecurrentdisproportionalpatternofincomeandconsumption. Therearelikelytobeshiftsin
thebalanceofeconomicandpoliticalpowerastheself-correctionplaysout.
Webelievethattheperspectivewepresentinthispaperenablesustogobeyondthebusiness
perspectiveofoutsourcingandincludeinouranalysisamuchlargerworldsystemperspective.

OUTSOURCING R&D: THE
NEXT FRONTIER
Jason M Pattit, PhD Candidate, Technology Strategy and Innovation
Management, Snyder Centre for Innovation Management, Whitman School of
Management,SyracuseUniversity.
Ph: 315- 443-3443, jmpattit@syr.edu
SPRaj,ProfessorofMarketing,CornellUniversity,Ithaca,NY.
Ph: 607-254-5068, spr24@cornell.edu
David Wilemon, Earl and Josephine Snyder Professor of Innovation and
Entrepreneurship; Academic Director, Programme in Entrepreneurship and
Emerging Enterprises, Director, Earl V Synder Centre for Innovation
Management, Whitman School of Management, Syracuse University.
Ph: 607-254-5068, dwilemon@som.syr.edu
Overthelastcentury,mostfirmshaveprimarilyreliedontheirinternallaboratoriesfor
R&D. The output from R&D helped to increase profits from organic growth through the
developmentofnewproductsandprocesses.However,theincreasedmobilityandavailability
ofknowledgeworkers,governmenttechnologyinitiativesandregulations,andtheglobal
interconnectednessoffirmsduetotelecommunicationsandtheInternethavecontributed
to the erosion of the dominance of the centralised corporate R&D lab and the increased
fragmentationofsourcesofspecialisedknowledge.Additionally,developingcomplexnew
productsandsystemsoftenrequirestheintegrationof‘deep’knowledgeandskillsfrom
disparatetechnicalandscientificfields.Consequently,firmslackingadequatetechnical
andscientificcompetenciestocompletelydevelopcomplexproductsandsystemsfrequently
looktoexternalsourcesofknowledgeandtechnologytosupplementinternalexpertise.
Collectively,thesefactorshavecontributedtoashiftintheinnovationlandscapetoa
paradigmofOpenInnovation.Thisshifthasimplicationsforthesourcingofbasicscientific
researchandthedevelopmentofcommercialisabletechnologies.Inthisarticleweexamine
howavarietyoffactorsinfluencesthedecisiontooutsourceR&DinanOpenInnovation
paradigm.Wealsodiscussissuesrelevanttomanagersstrugglingtocometogripswiththe
emerging Open Innovation paradigm.

R&D/KNOWLEDGE PROCESS OUTSOURCING FROM
JAPAN: AN UNEXPLORED COMPETITIVENESS
OPPORTUNITY?
K Momaya, AssociateProfessor,DepartmentofManagementStudies,IITDelhi.
Ph: 91-80-26591174, Fax: +011 2686 2620, momaya@dms.iitd.ernet.in
Outsourcing(OS)hasbeenaroundforagesandcanhaveasynergisticimpactonanindustry
or business ecosystem (e.g. Keiretsu in Japan). Globalisation of OS has created many
opportunitiesforfirmsinIndia.Havingbuiltsomefoundations(skills,capabilities,business
models),progressivefirmsfromIndiahavetakentheinitiativetomoveupthevaluepyramid.
ResearchindicatesthatKnowledgeProcessOutsourcing(KPO)maybeonesuchinitiative
up the value pyramid and may turn out to be the next wave for India. At the same time,
muchbiggeropportunitieslieinotheremergingindustriessuchasthecontentsindustry
andallopportunitiesneedtobeexploredwithstrategicthinking.
Thekeypurposeofthispaperistoexplorethelittleexploredopportunityofmanagement
researchoutsourcingfromJapanasasourceofcompetitiveness.Systematicmethodology
willbeusedtofocusonthemostrelevantelementsofoutsourcingforcompetitiveness.
Exampleswillbegiventoillustratethatbiggeropportunitiesmaybeavailableinother
industriesthansoftwareservicesandBPO,andinotherregionsandniches.Indicativekey
questionsthatencouragestrategicthinkinghavebeenevolvedandgrouped. Takingcues
from some experiments in more challenging R&D outsourcing, an attempt will be made to
discussthefindingsfromapilotofKPO(R&DServices)beingdevelopedattheDepartment
ofManagementStudies,IITD.Keyelementsofthepilotwillbediscussedandglimpseswill
be given of value creation opportunities in cooperation with Japanese industries and
institutes.Learningwillbesynthesisedandimplicationsdrawn.Keyleadershipinsightsare
expectedtoemergeonthefollowingquestions:
l HavingsucceededinEnglishspeakingmarkets,canJapanbethenextlevelofchallenge
forcapablefirmsfromIndia?
l AremarketsinemergingindustriesinJapanattractiveenough?
l WhydoescooperationwithJapanremainalessexploredopportunityinIndia?
l What can be the key areas of opportunity?
l WhatarethekeysuccessfactorsintheKPOnicheinJapan?
Keywords:CorporateCompetitiveness,KnowledgeProcessOutsourcing,Japan,StrategicOptions

BUSINESS PROCESS OUTSOURCING:
KNOWLEDGE MANAGEMENT AS A
COMPETITIVE STRATEGY
K Manasa, Knowledge Management consultant, Wipro Technologies,
Bangalore.
Ph: 080-25502001, Fax: 080-25502160, manasa.kakulavarapu@wipro.com
Kailash B L Srivastava, Associate Professor, Department of Humanities &
SocialSciences,IITKharagpur.
Ph: 03222-283624, kbls@hss.iitkgp.ernet.in
Businessprocessoutsourcing,oneofthefastestgrowingsegmentsoftheITenabledservices
industry,isdeterminedbythenatureofindustry,coordinationandcontrolmechanism,
productmaturity,andlevelofinter-firmcompetition.Withincreasedcompetitioninthe
BPOsector,Indianfirmshavetocontinuouslyprovetheircapabilitiestodeliverandcreate
nearindispensablesituationsfortheparentorganisationtosurvivewithoutthem.This
requiresnotonlytechnicalanddomainexpertisebutalsorefinedsystemsandpracticesto
better serve customers and manage growth and challenge.
Knowledge management (KM) as a strategy has immense potential to help BPOs gain
competitiveedgebyprovidingvalueaddedservices.KMcanalsohelpaddresspainareas
likeidentifyingdomainspecificskillscriticaltobusinessprocessthatisoutsourced,
facilitatingfasterrampupamongfreshentrantsandretentionofvitalknowledgethatis
likelytobelostduetohighattritionrates.Despitethelargebodyofliteratureonknowledge
managementinavarietyofsettings,thereisapaucityofresearchassessingtheroleof
knowledge management in the outsourcing business. Drawing from the research in the
software services industry, this paper proposes ideas and guidelines on how knowledge
managementcanbeimplementedtodeliversuperiorqualityandvalueaddedservices.
Further,thepaperalsobrieflydiscussesthegrowingneedforsoundknowledgemanagement
as the outsourcing vendors move up the value chain by providing high-end services i.e.
‘Knowledge process outsourcing’. The nature of knowledge work/services that can be
outsourcedandtheroleofknowledgemanagementinenablingthecaptureandacquisition
ofknowledgethroughtheoutsourcingrelationshiparealsodiscussed.

BPO ADOPTION BY SMALL AND MEDIUM
ENTERPRISES: AN INNOVATION-BASED APPROACH
Pradeep Mukherjee, President & Managing Partner, Tholons, Asia Pacific
Headquarters,Bangalore.
Ph: 91-80-41325618, pradeep@tholons.com
Abhijit Chaudhury, Professor, CIS Department, Bryant University, Rhode
Island.
Ph: 401-232-6418, Fax: 401-232-6435, achaudhu@bryant.edu
NishantVerma,Principal,Tholons,AsiaPacificHeadquarters,Bangalore.
Thetrendofbusinessprocessoutsourcing(BPO)isstrongintheWestandhasnowstarted
tospreadamongsmallandmediumenterprises(SMEs),whoareusuallylaggardsinadopting
suchinnovations.Thepurposeofthisstudyistoinvestigatefactorscontributingtothe
adoption of BPO by SMEs in Western countries. The research model is based on Rogers’
diffusion of innovation (DOI) theory, according to which innovation is the adoption of
ideasthatarenewtotheadoptingorganisations.InDOI,diffusionistheprocessbywhich
an innovation is communicated through certain channels over time among members of a
socialsystem.Theprocesshasseveralstages.Rogers,definesthediffusionstageasthe
processthroughwhichthenewideaspreadsandtheadoptionprocessasthe‘mentalprocess
throughwhichanindividualpasses…frominnovationtofinaladoption’.
ThefocusofthisresearchisontheprocessofdiffusionandadoptionofBPOasanewidea.
In the context of the literature on DOI, our model posits that it is the fit among four
independentvariablesthatdeterminestheadoptionofaninnovation,thedependentvariable.
Thefourfactorsare:innovationprofileorthecharacteristicsthatfavourtheadoptionofan
innovation;innovatorprofile;environmentalcharacteristics;andsystemcharacteristics.
ThemodelisappliedtoSMEs.Throughaliteraturesurvey,thegeneralcharacteristicsof
SMEsaredeterminedintermsofformalisation,centralisationofdecision-making,diversity,
sizeandeducation.
Given such characteristics, the model recommends that the vendor community seek firms
thatarelikelytobeearlyadopters(innovatorprofile),selectanSMEsectorwherecompetitive
pressures are high, which is homogenous and big so as to permit economies of scale
(environmentalcharacteristics),promotetrialabilityandobservabilityoftheirsolution
(innovationprofile),andprovideadequatetrainingandlearningopportunitiestotheir
clients(systemcharacteristics).

SHIFTS IN KNOWLEDGE-INTENSITY AND SME
INTERNATIONALISATION: DIVERSIFYING FROM
SOFTWARE SERVICES TO PRODUCTS
Shameen Prashantham, AIM Research Fellow, University of Strathclyde,
GraduateSchoolofBusiness,Glasgow,UnitedKingdom.
Ph:+44-141-5536107,Fax:+44-141-5528851, Shameen@gsb.strath.ac.uk
Naveen Marimuthu, Mindtree Consulting,Bangalore.
Ph: +91 22 5644 5735, namarimuthu@deloitte.com
Globaloutsourcingisfuellingtheentrepreneurialstrategyofenteringinternationalmarkets
onthepartofsmallerfirmsintechnology-intensivesectors.Whiletraditionalviewsof
internationalisation have emphasised the importance of market knowledge, more recent
researchattheintersectionofstrategy,entrepreneurshipandinternationalbusinesspoints
totheimportanceofknowledge-intensityindrivingthesefirms’internationalisation.
Despiteconsiderableresearchontheinternationalisationofsmallertechnology-intensive
firms,littleattentionhasbeenpaidintheliteraturetoupwardshiftsinknowledge-intensity
thatfirmsmayengagein.Knowledge-intensiveofferingsaregenerallytakenasagivenand
onlymarket-relatedchangeshavebeentypicallyconsidered.However,aprimarymotivation
for internationalisation is growth and growth stems from vital resources that can be
strengthenedorimproved.Itthusseemsquitelikelythatsomefirmswouldseektoenhance
theirknowledge-intensityandfosterfurthergrowth,especiallyininternationalmarkets.
Thisstudyaddressesthisgapbyinducingtheorythroughcase-studyresearchonaBritish
software SME. The software industry – a setting for several studies on small firm
internationalisation–offersthepossibilityofstudyinganupwardshiftinknowledge-
intensityviz.diversificationfromservicestoproducts.Thestudydeepensunderstandingof
therelationshipbetweenenhancementofknowledge-intensityandinternationalgrowth.
Thecentralargumentisthatthisrelationshipispositivelymoderatedbycognitive(e.g.
opportunity-seeking)abilities,managementoforganisationcultureandabsorptivecapacity
i.e.theabilitytolearn.Ourcontributiontotheliteratureisthree-fold.First,weprovidea
moreholisticperspectiveofentrepreneurialinternationalisationbyalsotakingintoaccount
product-related strategic change (prior to market-related strategic change i.e.
internationalisation). Second, the study enhances the learning perspective of
internationalisationbyincorporatingcognitionandabsorptivecapacity.Third,wehighlight
theroleofoverlookedorganisationalcharacteristicssuchasorganisationalculture.The
paperalsodiscussesimplicationsforpractitionersandresearch.

ENTREPRENEURIAL GLOBALISATION: LESSONS
FROM THE EXPERIENCES OF EUROPEAN SMALL
AND MEDIUM ENTERPRISES
U Srinivasa Rangan, Associate Professor of Strategy and International
Business, Babson College, MA 02457, USA.
Ph: 781-239-4237, rangan@babson.edu
PeterSchumacher,PresidentandCEO,ValueLeadershipGroupInc,Frankfurt.
Ph:+49-(0)-69-975-03406Fax:+49-(0)-69-975-03200,
p.schumacher@value-leadership.com
Indiaasadestinationofbusinessprocessoutsourcingandsoftwaredevelopmentisnowa
widely recognised fact. Many American and several European multinational corporations
have sought to exploit India’s low labour cost advantage in such areas. More recently,
though,theseinternationalfirmshaveexpandedtheiruseofIndia’slowcosttalentpools
in additional areas such as engineering, product design and development, and applied
research.Theexperiencesofmanyofthesefirmshavebeenwrittenaboutinthepopular
press,inbusinessschoolcasestudies,andinsomeacademicpapers.Themainthrustof
muchofthiswritingistodemonstratehowaccesstolowcostfactorinputsinplacessuch
asIndiaprovidesanopportunityforfirmstocompetemoreprofitablyinanincreasingly
integratedworldwherefirms,multinationalorotherwise,facefiercecompetition.Whatis
missingisanyrecognitionofawiderimplicationofglobalisationoffactormarkets.
Inthispaper,theauthorsarguethatwiththeopportunitysetfordistributingthevalue
chainofactivitiesacrosstheworldwiththearrivalofcountriessuchasIndia,internationally
orientedfirmsalsoenjoytheopportunitytomoreentrepreneuriallyrethinktheircompetitive
strategies.Suchanentrepreneurialglobalisationapproach,however,callsforsimultaneous
changesinmultipleaspectsoftheorganisation.Morenimblefirms,oftensmallandmedium
sizedones,areperhapsinabetterpositiontotakeadvantageofsuchastrategicapproach.
BasedonseveralcasestudiesofEuropeansmallandmediumsizedenterprises(SMEs),the
authors demonstrate how firms have sought to rethink their businesses from ground up,
reconfiguretheirvaluechainactivitiesglobally,leveragetheresourcesofotherfirms,
createstrategicoptionsfortheirfirms,andhaveimprovedtheircompetitivepositioninthe
market place. The authors suggest that these SMEs may well be in the vanguard of an
industrialrenaissanceinEurope,acontinentthathashithertobeenlesswellreceptiveto
theuseofoff-shoreopportunitiesofferedbycountriessuchasIndia.
The authors conclude with managerial recommendations as to how firms, small and large,
couldtakeadvantageofglobalfactormarketsthroughcreativeandentrepreneurialstrategies.
Theyalsoraisesomeadditionalresearchquestions,especiallyrelatingtoorganisational
andmanagerialchallengesposedbyamoregloballydistributedassetandcapabilitysetfor
firmsseekingtobeentrepreneuriallyglobal.

THE PERCEIVED IMPACT OF OUTSOURCING
ON SMALL AND MEDIUM INDUSTRIES
Jogendra Kumar Nayak, PhD student, IIT Kharagpur and Lecturer
(Senior),RegionalCollegeofManagement,BijuPattnaikTechnical
University,Orissa.
jognayak@yahoo.com
GautamSinha,Professor,IITKharagpur.
KalyanKGuin,Professor,IITKharagpur.
Recentliteraturesuggeststhatoutsourcing,properlyunderstoodandmanagedasanintegral
partofstrategy,canaidcompetitiveness.Ontheotherhand,industryevidencesuggests
that if overdone it could create a fragile organisation in the long run — the hollow
corporation. This paper examines the reasons for outsourcing and its impact on the
performanceoffirms.Anempiricalmethodwasadoptedandfirmswerestudiedonthebasis
ofaquestionnairestudy.Thisstudyhashelpedinanalysingthevariousfacetsofoutsourcing
anditsrelativeimportance.Itwouldactasaguidingtoolforpractitionersandresearchers.

BENCHMARKING KNOWLEDGE GAPS FOR
ASSESSING OUTSOURCING VIABILITY
Sandhya Shekhar, Department of Management Studies, Indian Institute of
TechnologyMadras.
Ph: 91-44-22574550; Fax: 91-44-22574552, sandhya@iitm.ac.in
L S Ganesh, Department of Management Studies, Indian Institute of
TechnologyMadras.
Ph: 91-44-22574551; Fax: 91-44-22574552, lsg@iitm.ac.in
Globaloutsourcingisclearlyoneofthemajortrendsinrecenttimes.Whilethereisasurfeit
ofarticlesandpapersaboutthisphenomenon,thereislittleresearchonriskmitigation
strategiesforoutsourcingpartnerselection.Oneofthemajorriskfactorsisonaccountof
knowledgegapsbetweentheoutsourcingorganisationandtheexternalprovider.Thispaper
positsthatsincetheknowledgedimensionisacriticaloneforanyoutsourcedactivity,its
objectiveassessmentisimportantintheoverallprocessofevaluationoftheexternalprovider.
Thepaperproposesaformalprocessof‘knowledgegapassessment’toaddressthisfactor
andasaninputtoassessingpartnerviability.Italsoidentifiestwoimportantdimensions
thatarespecifictoanoutsourcingrelationshipthatwouldmakethisexercisesignificantly
differenttoaknowledgegapassessmenttakenupinotherorganisationalcontexts.Finally
thispaperoutlinesaconceptualmodelthattakesthesedimensionsintoaccountthrougha
process of benchmarking and could be used as a generic tool for performing such an
assessmentnotjustinanoutsourcingrelationshipbutinanyinter-organisationalcontext.

LEVERAGING OUTSOURCING – PERFORMANCE OF
AND IMPLICATIONS FOR INDIAN INFORMATION
TECHNOLOGY SERVICES INDUSTRY
Srinivas Ainavolu, FellowshipStudent,StrategicManagementGroup, Indian
InstituteofManagementCalcutta.
Ph:033-28680490,Fax:033-24678062,srini@iimcal.ac.in
Intheservicesdomain,theIndianinformationtechnology(IT)servicesindustryhasbeen
oneofthebiggestbeneficiariesofoutsourcing.However,Indianvendorstraditionallyhave
focusedontheexportmarket,possiblybecauseofthesmallersizeandlowerattractionof
thedomesticmarketintermsofprofitability.Thecurrentdomesticmarketisathirdofthe
exportmarket.TheIndianITservicesindustryisalsofairlyconcentrated.Thetopfivefirms
haveacombinedshareofathirdofindustrysalesandthetoptwentyfirmstogethershare
halftheindustryrevenues.Theindustryhasbeenquiteinnovativeinleveragingtheoffshore
outsourcing model and has been growing at over thirty percent in the last decade. The
currentnumberofplayersintheindustryisoverthreethousand.Manyofthesearesmallin
size.Theplayersareofdifferenttypesandcanbeclassifiedintolarge,mediumandsmall
IndianITservicesvendors,largeglobalITservicesplayersandfinally,smalleroverseasIT
vendors.ThefocusofthispaperisonIndianvendors.
CurrentlyIndianvendorsaretryingtomoveupthevaluecurveandarebiddingforhigher
valueandbiggercontractsatthegloballevelandmanylargeIndianITservicesfirmshave
been successful as primary vendors at the global level. At the same time, the domestic
marketisincreasinglybeingcateredtobylargeglobalfirmswhoareservicinghighervalue
andlargecontracts.Undertakinghighervalueworkdomesticallyandreplicatingtheexperience
overseas would have been a more credible option for Indian firms as their traditional
offshorebasedoutsourcingmodeliseasilyreplicable.Theincreasinguseofprimaryoffshoring
bylargeglobalservicefirmsisanotherchallengetoIndianfirmsandhencethereisthe
needforamoresustainablyadvantageouscompetitivemodel.
Asoldmodelsandassumptionsarequicklygivingway,whatcapabilitiesdoIndianvendors
needforeffectivelymeetingthechallengesofthefuture?Thispaperexaminesthecurrent
performanceofIndianplayersandfocusesonwhattheyneedtoadoptinthelightofthe
challenges. Combining data from industry databases with that of primary interview
investigationsconductedwithindustrypersonnel,itdiscussesthechallengesbeforethese
playersinthecontextofthematuringoftheindustry,openingupofnewercompetition
andincreasedrampingupbyglobalmajors.Theimplicationsofthechangingcontextand
thenormativemeasuresforIndianITservicevendorsarepresentedindetail.

OUTSOURCING AND TRANSFER
PRICING CHALLENGES
Suveera Gill, Reader, University Business School, Panjab University.
Ph: +91-172- 2212389/2212398, Fax: 91-172-2541591,
gillsuveera@yahoo.com
Theworldhaswitnessedfundamentalchangesininternationalbusinessduringthelasttwo
decades.Theflowofgoods,servicesandcapitalacrosscountrieshasincreasedmanifold.
Entitiesarenolongerrestrictingtheiroperationstothedomesticmarketandhaveexpanded
acrossinternationalbordersrapidly,becomingmultinationalandtransnationalenterprises.
Tofurtherincreasetheircompetitiveness,manyenterprisesareturningtobusinessprocess
outsourcing (BPO) and India has emerged as a prominent outsourcing hub. Traditional
outsourcinghasincreasedinscopeandimpact,withtheinclusionofBPOandoffshoring,
whichsavepreciousmanagementtimeandresourcesandalloworganisationstobuildupon
corecompetencies.However,outsourcingcomeswithitsownchallengesandrisks.
Oneoftheparamountconcernsofenterprisestodayisthedeterminationofthepriceat
whichtherelatedpartiesselltheirproducts,offerservices,providefundsorconductresearch
and development — commonly referred to as transfer pricing (TP). With ever increasing
outsourcingandtheintroductionofTPrulesandregulationsbymoreandmorecountries,
enterprisesaresubjecttoconflictingrulesanddoubletaxation.Thispapertracesthese
differencesamongcountrieswhichhaveresultedindisputesbothbetweentaxauthorities
andbetweentaxauthoritiesandtaxpayers.TheTPDirectorateinIndiawhichcarriedout
its first audit in 2005 has already zeroed in on 250 companies for Rs. 1,250 crores of
additionaltaxfortheircross-bordertransactions.TheoutstandingduesoftheIncomeTax
departmentaresettorisefurtherandaslewofmultinationals,cuttingacrosssectors,have
contested demands raised on them for violations of TP norms. While many multinationals
havealreadyfiledappealschallengingtheirtaxdemands,afewothersareplanningtotake
recoursetothemutualagreementprocedure(MAP).Thispaperscrutinisesthedecisionson
variousTPcasesinIndiasoastoidentifythetaxationissueswhichneedtobeaddressed.
Thepaperconcludesbyrecommendingtransferpricingreviewonsomeimportantissueslike
taxability of permanent establishment (PE), advance price agreements (APA) and
characterisationofnon-feebaseddealslikeroyalty,technicalfeesandservices,soasto
ensurethattaxpayersmaximisetheirglobaltaxpositionandthatthetaxableprofitreturned
doesreflecttheeconomicactivityperformedineachtaxjurisdiction.

CORPORATE ENTREPRENEURSHIP MODEL: A
SOURCE OF GLOBAL COMPETITIVENESS
BRBhardwaj, PhDstudent,IITDelhiandfaculty,BharartiVidyapeeth
Institute of Management & Research, New Delhi.
Phone: 9811545647, brotorauth@yahoo.com
Sushil,ProfessorandChair,StrategicManagementGroup,Department
ofManagementStudies,IndianInstituteofTechnology,Delhi.
Ph: 91-80-26591189, sushil@dms.iitd.ernet.in
KMomaya,AssociateProfessor,IITDelhi.
Ph: 91-80-26591895, momaya@dms.iitd.ernet.in
Thepurposeofthispaperistoexplorecorporateentrepreneurship(CE)asthesourceof
competitiveness.TheobjectiveistodevelopaCEModelthatincludestheantecedentsof
CE, and the parameters of competitiveness. This model can be used to enhance
competitivenessintheglobalmarket.Applicationofregressionandcorrelationanalysis
hasbeenshownindetail.
Keywords:corporateentrepreneurship,competitiveness

INDO US FTA: PROSPECTS FOR
IT-ENABLED/BPO SERVICES
ArpitaMukherjee,SeniorFellow,IndianCouncilforResearchonInternational
EconomicRelations(ICRIER).
Ph:91-11-24645218-20,arpita@icrier.res.in
Paramita Deb Gupta, Research Assistant, Indian Council for Research on
InternationalEconomicRelations(ICRIER).
Ph: 91-11- 2464 5218-20, paramita@icrier.res.in
Withincreasedglobalisationanddevelopmentofinformationtechnology,developedcountries
suchastheUSarerelocatingalargecomponentofback-officeservices(forexample,payroll)
andfront-officeservices(forexample,customercare)todevelopingcountriessuchas
India.Suchrelocationshelpthecompaniesinreducingcostsandatthesametimemaintain
sameorachievehigherlevelsofproductivityandefficiency.InIndia,relocationhasledto
economic development, creation of employment, increase in wages, growth of ancillary
industriesandinvestmentininfrastructure.Inspiteofthebenefits,someoftheUSstates,
inrecentyears,haveenactedanti-outsourcingregulations,primarilytoprotectdomestic
employment.
Both India and the US have expressed interest in entering into an Free Trade Agreement
(FTA). Although it is yet to be decided whether the agreement would cover only service
sectors or it would be all comprehensive (covering goods, services, investment, trade
facilitation,etc.),ithasbeenagreedthatIT-enabled/BPOserviceswillbeapriorityarea
forFTAnegotiationsfromtheIndianperspective.Thecomplexityofthenegotiationsstems
fromthefactthatthisisacross-sectoralissue,i.e.,itaffectsmorethanoneservicesector.
Inthiscontext,thisstudydiscussesthecurrenttradeflowsbetweenIndiaandtheUSin
thissector,highlightstheareasoftradepotential,recentregulatoryandotherdevelopments
andtheirimplication,andbarrierstotrade.Thestudyisbasedonacountry-widesurveyof
112IT-enabled/BPOcompanies(95independentand17captive),whichhaveallormajority
businesswiththeUS.ItdiscussestowhatextentIndiaandtheUSarelikelytoliberalise
multilaterallyintheon-goingDohaRoundofnegotiations.Italsodiscussestheextentof
liberalisationundertakenbytheUSandIndiaintheirotherbilateralagreements.Basedon
thebarriersfacedbyIndiancompaniesintheUSandwhattheUSisofferingtoitstrading
partnersinbilateralagreements,itsuggestsIndia’snegotiatingstrategiesanddiscusses
whattheUSislikelytoaskreciprocally.ItfocusesonhowtheFTAcanbemutuallybeneficial.
Finally,itsuggestsdomesticreformswhichwouldimproveproductivity,efficiencyandglobal
competitivenessofthesectorandenableIndiatobenefitfromthebilateralliberalisation.

SPILLOVERS FROM FOREIGN DIRECT INVESTMENT AND
ABSORPTIVE CAPACITY OF FIRMS: EVIDENCE FROM INDIAN
MANUFACTURING INDUSTRY AFTER LIBERALISATION
TJJoseph, PostDoctoralFellow,ICFAIInstituteforManagementTeachers
(IIMT), Hyderabad – 500034.
Ph: +91-40-23430474/ 23430494 / 23430254; Fax: +91-40-23430468,
tjjoseph@gmail.com
Foreigndirectinvestment(FDI)throughmultinationalenterprises(MNEs)isrecognisedas
an important channel in bridging the technological gap between rich and poor countries
throughacontinualprocessofinternationaltransferanddiffusionoftechnology.FDIis
expectedtogenerateasetofexternalitiesondomesticproducers,whichareoftenreferred
toas‘spillovers’.Domesticfirmsaresupposedtoincreasetheirproductivitybyadoptingthe
brandnewtechnologiesofMNEs,knownashorizontal(intra-industry)spilloversfromFDI.
Domesticfirmsmayalsobenefitwhentheyareemployedassuppliersorsubcontractorsto
MNEs that helps them to expand output and achieve economies of scale. Such type of
externalitiesarereferredtoasvertical(inter-industry)spillovers.However,thesespillovers
do not occur naturally and depend on the ability of the domestic firms to absorb such
knowledgespillovers.
Theobjectiveofthisstudyistoanalysethespillovereffectsofbothhorizontalandbackward
spilloversfromFDIontheproductivityofdomesticfirms,andtheroleofin-houseR&Dof
domesticfirmsindeterminingtheabsorptivecapacityofspillovers.Thestudyanalyses
paneldataforIndianmanufacturingfirmsfortheperiod1993-2004.Thespillovereffectsof
FDIontheproductivityofdomesticfirmsaremeasuredincorporatingdifferentpossible
spillovervariablesinanextendedproductionfunction.Sinceproductivitycanbeinfluenced
byfirm-specifictechnologicalfactorsaswell,varioustechnologyvariablesareintroduced
inthemodeltocontrolforsuchfactors.Theroleoftheabsorptivecapacityofdomestic
firmsisinvestigatedintroducinginteractionvariablesbetweenin-houseR&Dofdomestic
firmsandvariousspillovervariables.Thespecifiedmodelsareestimatedusingpaneldata
estimationtechniques.
Thestudyshowsevidenceofpositivespillovereffectfromthemarketpresenceofforeign
firms—anincreaseintheproductivityofdomesticfirms.Theresultsindicatethatthereis
bothapositivecompetitioneffectfromthepresenceofforeignfirms(horizontaleffect)
andapositiveverticaleffectduetobackwardlinkagesbetweendomesticfirmsandforeign
firms,wherelocalfirmsactassuppliersofrawmaterialstotheforeignfirms.Whilethe
technologicalcapabilityofdomesticsuppliersisfoundtobeacriticalfactorinabsorbing
thepositivebackwardspilloversfromforeignfirms,suchcapabilitybuildingisnotvery
importantfordomesticfirmsinthesameindustrysectorinordertoabsorbthepositive
spillovers.Theresultssuggeststrongpolicyemphasisinfacilitatingthecreationofsupply
networksaroundleadingforeignfirmsandpolicyincentivestoencourageR&Dactivities.

OFFSHORING IN EUROPE — EVIDENCE OF A
TWO-WAY STREET FROM DENMARK
Peter D Ørberg Jensen, Centre for Business and Development Studies,
Copenhagen Business School, Denmark.
Ph: +45-3815 3222, Fax: +45- 3815 3840, pj.ikl@cbs.dk
Based on a large Danish survey covering companies in sectors with tradeable goods and
services,thisworkingpaperpresentsresultsonoffshoringanditsjobimpactthataddnew
perspectivestotheglobalisationdebate.Globalisationentailsacross-borderflowofjobs,
butcontrarytothepictureofglobalisationportrayedinthemedia,itisnotaone-way
street,butatwo-waystreet:Inthe2002-2005period,morejobswerecreatedasaresultof
theoffshoringofactivitiestoEasternDenmarkfromcompaniesoutsideDenmark(i.e.inshored
toDenmark)thanwereeliminatedduetooffshoringfromcompaniesintheDanishregion.
Overall,theemploymenteffectsofbothoffshoringandinshoringwerefoundtobelimited
withlessthanonepercentofalljobseitherlosttooffshoringorgainedvia‘inshoring’.We
argue that for Denmark the worries in purely numerical terms regarding the employment
effectsofglobalisationseemoverlyalarmist.However,thetrendsrevealedinthestudydo
pose challenges for low-skilled labour — the group most negatively affected — and for
highlyskilledspecialists,whofaceapressuretoupgradetheirskills.Wealsoarguethat
policyimplicationscanbedrawninviewoftheresultstoensurethatlabourmarketsmeet
thedemandsofglobalisingfirms.

PRODUCTION FRAGMENTATION AND
OUTSOURCING: IMPLICATIONS FOR INDIA’S
GLOBAL TRADE INTEGRATION
Sadhana Srivastava, Research Scholar, South Asian Studies Programme,
National University of Singapore. artp0320@nus.edu.sg
RahulSen,Fellow,RegionalEconomicStudies,InstituteofSoutheastAsian
Studies(ISEAS),Singapore.rahul@iseas.edu.sg
The linkages between Foreign Direct Investment (FDI) and trade have assumed greater
importance with increasing globalisation and rapid advancement in information and
communications technologies, resulting in reduction in the cost of communications and
logisticssupport.Thishasenhancedthescopeofinternationalproductionfragmentation,
definedasthecross-borderfragmentationofcomponentproduction/assemblywithinvertically
integratedproductionprocesses,notonlyinmerchandisetrade,butalsoincreasinglyin
tradeincommercialservices.
This paper analyses the trends, patterns and implications of international production
fragmentationinbothIndia’smerchandisetradeaswellasintransactionincommercial
services.
Theprincipalresearchquestionstobeinvestigatedareasfollows.First,whetherIndian
manufacturing is indeed experiencing the phenomenon of international product
fragmentation. This is captured by analysing the trade in parts and components in the
manufacturingsector,forwhichdisaggregatedproductleveldataisused.Second,isthe
extenttowhichsuchtradeisbeingfacilitatedbymultinationalsthatengageincross-
borderintra-industrytrade.Forthispurpose,thepaperdecomposesIndia’smanufacturing
tradeintoone-waytradeandintra-industrytrade(IIT).Whilealargeportionofone-way
tradewouldbeinter-industrytradeasexplainedbythetraditionalcomparativeadvantage
theory,itwouldalsoincludetradewithchangesincommoditycategoriesintheprocessof
transactionsinverticallyfragmentedproductionchains.TheestimatesofthevolumeofIIT
inIndia’smanufacturingprovideusefulinsightsonthemagnitudeofproductfragmentation.
Finally,thepaperprovidesmorebroadestimatesofIITinIndia’scommercialservicestrade,
tohighlightthegrowingimportanceofinternationalfragmentationinservicesbywayof
the phenomenon of outsourcing and offshoring.
TheanalysispointstothefactthatIndiaisexperiencinginternationalproductfragmentation
inbothitsmerchandiseandcommercialservicestrade,withthelattersectorexperiencing
largescaleoffshoringactivities,particularlyintheICT-enabledservices.However,compared
tomostdevelopingeconomiesinAsia(particularlyinEastAsia),Indiaisonlybeginningto
experienceproductfragmentationinitsmerchandisetrade,andhasasignificantpotential
forexpansionofthesameintheareaofauto-parts,electronicsandelectricalmachinery.

DEALERSHIP – A SINGULAR
ROUTE TO OUTSOURCING
Priyan R Naik, Head, Product Support — Construction & Mining Business,
Larsen&ToubroLtd.,Bangalore.
Ph: 9844120053, Fax: 91-80-25580528, naikpr@larsentoubro.com
Thepaperbringsouttheefficacyofusingauniquestrategyforoutsourcing.Outsourcingin
theearthmovingindustryisuncommon,largelyduetotechnicalintricacies,technological
obsolescence, unavailability of trained manpower and the sheer lack of exposure to the
conceptsofoutsourcing.
Thispaperdescribesanearthmovingandminingindustryframework,buttressedbysustainable
strategies implemented to gain competitive advantage by outsourcing service and parts
salestokeydealersacrossthecountry.Thebenefitsarenumerous:outstandingsaredown,
workingcapitalisundercontrol,themarketexpands,availabilityandcoverageimproves,
andmachineutilisationgoesup;meantimetorespond/repair(MTTR)valuesdropdramatically.
Buttheimplementationprocessisarduous.Theavailabilityofdealercandidatesandthe
viabilityofeachunitofdealershipareissues. Manpowerisaproblem.Channelconflicts
ariseperiodically.Policieshavetobeevolvedateverystep.
This paper describes the research methodology undertaken, the key managerial insights
gained,therigourinvolved,thelargescaleanalysisthatwasundertakentoarrive at
correctanswersandthelessonslearnt.Theauthorhaspresentedthisinhispersonalcapacity,
asinformationabouttheactualorganisationsinvolvedinthisexerciseisnotinthepublic
domain.

BUILDING COMPETENCIES THROUGH MAINTENANCE
OUTSOURCING IN MANUFACTURING FIRMS: A CASE
STUDY OF AN INDIAN GLASS COMPANY
Sanjay Choudhari, Faculty, School of Management, National Institute of
Construction Management and Research (NICMAR), Pune.
Mobile: 0 98 22 000 828, sanjay_iim@yahoo.com
Venkata Reddy Muppani, PhD candidate, Shailesh J Mehta School of
Management, IIT Bombay. muppani@iitb.ac.in
Arunabh Prasad Gupta, second year PGDM student, School of Management,
NICMAR Pune.
Ashutosh Garg, second year PGDM student, School of Management, NICMAR
Pune.
Organisationshaveputinsignificantefforttoimprovequality,serviceandflexibilityand
reducecosttoachieveworld-classperformance.Thesefirmsarestrivingfornewcompetitive
advantagestobuildupontheirmanufacturingcapabilities.Formanyfirms,partofthis
efforthasincludedanexaminationoftheactivitiesofthemaintenancefunction. Since
maintenanceisanintegralpartofmanufacturing,itcansignificantlyinfluenceafirm’s
competitiveness.Thedesiretoreducecostsandimproveservicelevelshasledmanycompanies
to review the way they do their maintenance work and to come up with new solutions and
strategies to develop and increase their competitiveness. Outsourcing is one of these
strategiesthatcanleadtogreatercompetitivenessandhencemanyorganisationsarenow
outsourcingmaintenancebesidesseveralin-houseactivities.Outsourcingfocusesontwo
strategicwaysofdevelopingcompetitiveadvantage:first,concentratingtheorganisation’s
resourcesandinvestmentsonwhatitdoesbesti.e.thefirm’scorecompetenceandsecond,
outsourcingallotheractivitiesforwhichthecompanyhasneitherastrategicneednora
specialcapability.
Thispaper,throughanextensiveliteraturereview,examinestheissuesofoutsourcing
maintenanceinmanufacturingfirms.Theexistingmaintenanceoutsourcingframeworksin
literaturearecriticallyexamined.Afivestepframeworkthatwouldallowefficientand
effective implementation of outsourcing maintenance has been developed. Firms should
firstmapmaintenanceactivitiesinalogicalareaandthenevaluateeachoftheseactivities
criticallyoneffectivenessrequiredandriskinvolvedinoutsourcing.Oncetheactivitytobe
outsourcedisestablished,thenextstepistodocumentapropermaintenanceoutsourcing
plan.Itisalsoimportanttoevaluatetheoutsourcerbasedontheskillsandknowledge
requiredforthatactivity.Havingidentifiedtheoutsourcer,asuitablemaintenanceoutsourcing
contractistobeagreeduponandtheneffortsaretobemadeforsmoothhandoverofthe
contract.Thisframeworkisappliedtoaglassmanufacturingfirmwhichiscontemplating
outsourcingmaintenanceactivities.

COMPETITIVE STRATEGIES FOR OUTSOURCING
IN HEALTHCARE INDUSTRY
BalaKrishnamoorthy, Professor-BusinessPolicy,NarseeMonjeeInstitute
of Management Studies (NMIMS)-Deemed University, Mumbai.
Ph: 91-22-25568062, balark1@rediffmail.com
Varun Nagalia, MBA II Student, NMIMS-Deemed University, Mumbai.
Ph: 9198207 20383, varun_nagalia@rediffmail.com
Inthepast,outsourcinghasbeenusedtacticallyasarapidandoftenshort-termsolution
toaparticularneedorproblem.Theadoptionofastrategicperspectiveonoutsourcingis
today regarded as one of the most useful and important business methodologies, giving
organisationstheopportunitytoliberatetheirfullpotentialforprofitability,efficiencyand
costeffectiveoperation,andallowingthemmaximumflexibilityintermsorretainingand
broadeningtheircustomerfranchise.Adoptingthisstrategicapproachplaysakeyrolein
theprivateandthepublicsectorsofmostoftheworld’sdevelopedcountries,andincreasingly
in many developing ones.
Thehealthcareindustryisgettingmoreandmorecompetitiveeveryday,whichhasledto
anincreasinguseofoutsourcinginthesector.AccordingtoaMcKinseyreportthehealthcare
marketisundertremendouspressurefromthreeforces:
l Constrainedprofits:Thedecliningreimbursementsandincreasingcostscausinghospitals
tooperateonrazorthinmargins.
l Lowerservicemodels:Asdemandforservicesincreases,thebudgetandthemaintenance
of adequate labour decrease leading to redefinition of acceptable and desirable
qualitylevelsofservice.
l Changingcustomerexpectations:Withincreasedavailabilityofinformation,expectations
have increased multiple fold and there are greater options in terms of payment and
servicelevels.
Thispaperanalysesthedynamicchangesthathavetakenplaceinthedeliveryofhealth
services, the changing demands and the changes in the outlook of healthcare delivery.
Furtherthepaperlooksintothecontributionsofstrategicoutsourcingtomakehealthcare
deliverycompetitive.Thepaperfocusesononesectionofthehealthcareoutsourcingmarket,
namely,theproviders,inidentifyingstrategicoutsourcingpracticesintheindustryin
generalandinselectleadinghospitals.

OUTSOURCING 3PL SERVICES: A MEASUREMENT
OF INDIAN CORPORATE MINDSET
DKAgrawal,AssociateProfessorandChairperson,MarketingArea,Fore
School of Management, New Delhi.
Ph: 9810627581, agrawal_dk2001@yahoo.com
SangeetaChhabra,AssociateProfessor,EconomicsandOutsourcing,Lal
BahadurShastriInstituteofManagement.
chhabrasangeeta@yahoo.co.in
Thereisagrowingawarenessaboutthestrategicroleoflogisticsservicesinthefirm’s
overallsuccess.Businesseshavemovedbeyondviewinglogisticsasmerelyanareaforcost
improvementtoviewingitasakeysourceofcompetitiveadvantagewithinafirm’stotal
marketefforts.Customerservicehasbeenakeyfocalareaofresearchinthelogistics
disciplineandtheliteratureinthearearevealsthatlogisticalservicecapabilitiescanbe
leveragedtocreatecustomerandsuppliervaluethroughserviceperformance;enablemass
customisation;createeffectivecustomerresponse-basedsystems;positivelyaffectcustomer
satisfactionand,inturn,corporateperformance;provideadifferentiatingcompetitive
advantage; and segment customers.
Anecdotalevidencefindsamultibillion-dollarthird-partylogistics(3PL)industrydedicated
toimprovingmanufacturers’logisticsservices.Mostfirmsindevelopedcountrieshavebeen
outsourcing3PLservices.ThesizeoftheIndianmarketisimpressiveonaccountofits
geographicalspread.Inrevenueterms,ithasbeenassessedatRs16,000croresbysome
sourcesandRs3000croresbyothers.InGDPterms,itisfoundthatthetotallogistics
spend in India is about 13% of the GDP which comes to about Rs. 3.58 lakh crore. The
outsourcedportionisestimatedtobearound1.2lakhcrore.
The growth of the 3PL industry in India is relatively low when compared with that of
developedcountriesduetothepoorcorporatemindsettowardsoutsourcingof3PLservices.
Companiesstillpreferthetraditionalfragmentedwayofmanagingshipment,warehousing,
inventorymanagementandorderprocessingandfulfilment.Ontheotherhand,3PLisall
aboutanintegratedapproachfortotallogisticalsolutionsensuringsuperiorcustomerservice.
Buttheoldmindsetmaybeinducedbythelackofinvestmentsandscale,lackoffinancial
support,lowawarenessandthehighoperationalcosts.
Inthisempiricalresearch,anattemptismadetomeasurethemindsetofcorporateenterprises
towards adaptation of 3PL along with their requirements and apprehensions. The survey
revealedthatlogisticsheadsoffirmsstillemphasisecostreductionandgenerallyoverlook
thelong-termimpactoncustomersatisfaction.

DIFFERENCES IN SERVICE QUALITY BETWEEN DEVELOPED
AND DEVELOPING COUNTRIES: HOW DEVELOPING
COUNTRIES CAN IMPROVE THEIR COMPETITIVENESS IN
THE OUTSOURCING OF SERVICES
Naresh K Malhotra, Regents’ Professor, College of Management, Georgia
InstituteofTechnology.
Naresh.Malhotra@mgt.gatech.edu
JamesAgarwal,AssociateProfessorandCoordinatorofMarketing,University
ofCalgary,Canada.
james.agarwal@haskayne.ucalgary.ca
Francis M Ulgado, Associate Professor, College of Management, Georgia
InstituteofTechnology.
francis.ulgado@mgt.gatech.edu
GShainesh,AssociateProfessor,Marketing,IndianInstituteofManagement
Bangalore.
shaineshg@iimb.ernet.in
Servicesaccountforalmosttwo-thirdsoftheworld’stotaloutput.Tradeinservicesis
growingfasterthaninotherareasandaccountsforonefifthofworldtrade. Exportsin
commercialservicesarenowgrowingfasterthanexportsinmerchandisegoods. Currently,
they account for more than 20% of the volume of merchandise trade.
Evaluationofservicequalitybecomesdifficultduetothreecharacteristicsthatareinherent
inservices—intangibility,heterogeneity,andinseparability.However,Parasuraman,etal.
proposed a framework consisting of ten determinants or dimensions of service quality:
reliability,access,understandingthecustomer,responsiveness,competence,courtesy,
communication,credibility,security,andtangibleconsiderations. Malhotraetal.used
thesedimensionsasabasisforacomparativeevaluationofthedeterminantsofservice
qualitybetweendevelopedanddevelopingcountries.
Thispaperextendsthegeneralframeworkforservicequalityandcorrespondinghypotheses
developedbyMalhotraetal.whichcomparativelyevaluatestendimensionsofservicequality
between developed and developing countries, to develop a framework for evaluating the
competitiveness in the outsourcing of services. It draws several implications on how
developingcountriescanimprovetheirglobalcompetitivenessintheoutsourcingofservices.

MEXICAN MAQUILAS AND INDIAN BPOS: A
CRITICAL COMPARISON
VanVMiller, PrincipalResearcher,Human&EcologicalResources,Los
Ojos,NM,USA.
Ph: 513-868-2278, Fax: 513-868-0702, vvmiller@fuse.net
AnandaMukherji, AssociateProfessorofManagement,Dept.ofManagement,
MarketingandInternationalBusiness,CollegeofBusinessAdministration,
TexasA&MInternationalUniversity,USA.
Ph: 956-326-2526, Fax: 956-326-2494, max@tamiu.edu
In November 1965, the Mexican government decided to initiate an industrialisation
programme that was out-of-step with its stated policies and activities for economic
development.TheprogrammeallowedMexicanmanufacturingplantstoimportrawmaterials
fromtheUnitedStates,assemblethemintofinishedgoods,andthenre-exportthosegoods
backtotheUnitedStates.Afterafewyears,thisearlyoutsourcingeffortformanufactured
goods became known as the Mexican Maquiladora Programme (MMP), which flourished until
2001whenitexperiencedaseriousdownturn.Today,ithasonlypartiallyrecoveredbut
appears to have stabilised, leading many to conclude that the programme has been a
success.ButthenumbersrevealverylittleabouttheMMP’simpactupondevelopment,the
primaryeconomicgoaloftheMexicannation.
ThispapercomparesandcontrastsMexico’smaquiladorasectorwithIndia’sBPOsector—
outsourcingforservices.Inbothcountries,thestatedoverarchingprincipleforeconomic
developmentduringthelatterhalfofthetwentiethcenturywasautarkyuntilmajorcrises
forcedapolicyreversal(1986inMexicoand1991inIndia)uponeachnation.Giventhese
contextualsimilaritiesandtheforty-yearhistoryoftheMMP,ourmajortaskinthisproposed
paper is to examine the economic development outcomes of the MMP and then to apply that
knowledgetoIndia’sBPOsinanattemptto‘see’ifthelatterisbetterpositionedasadriver
of economic development.
Toundertakethisanalyticaltask,weuseconceptsfrominstitutionaltheoryanddatafrom
multiple sources. Economic development is operationalised in standard terms as labour
turnoverandverticaleconomiclinkages.Byapplyingtheinstitutionalideasofrules,routines,
andtransactioncosts,weareabletoexplainthedevelopmentalshortcomingsoftheMMP
incertaintypesofmaquiladoraoperationsandtopredictsimilaroutcomesinIndianBPOs
withthesametypesofoperations.However,amajorcaveattothispredictionistheobserved
differenceintherules-routinesnexusforeachofthecountries.Theimportanceofthis
nexusforeconomicdevelopmentisfundamentaltoouranalysis.Thedataforthisproject
come from a stratified, random sample of maquiladoras in eight Mexican cities, Mexican
governmentreports,andinformationinthepublicdomainforIndianBPOs.

UNDERSTANDING URBAN TO RURAL
OUTSOURCING IN INDIA: BASIS AND POTENTIAL
Manoj T Thomas, Fellow student, Institute of Rural Management (IRMA),
Anand.
Ph: 09426523746, manojtthomas@gmail.com
This paper attempts to understand the phenomenon of urban to rural outsourcing, whose
potential has now begun to emerge, due to the changes in the technology and market
environment. Hitherto, urban to rural outsourcing has not been focussed upon, and even
the issue of urban-rural linkages has not been properly understood. At the same time,
‘offshoring’hasbroughtouttheadvantagesofexploitinggeographicaldifferencesincosts
andcapabilities.Thoughsubcontractinghastraditionallybeenbetweenurbanfirmsdueto
easeinensuringqualityandmanagingeffectivecoordination,theadventofnewinformation
technologieshasthepotentialtochangethis.Drawingonthelargertheoriesofoutsourcing,
thepapertriestounderstandhowthesecanbeapplicableforurbantoruraloutsourcing,
and at the same time understand how this process is different owing to the rural-urban
characteristics.
The paper attempts this in three ways. First it tries to understand the differences in
characteristicsbetweenruralandurbanIndiatoconsidertheservicesthatcanbeoutsourced.
This includes an idea of the differences in demographic and natural resources and the
differencesincostsofotherfactors.Thetraditionalinteractionbetweenurbanandrural
has been characterised by movement of labour and agricultural and natural resource
commodities from rural to urban, and movement of produced goods from urban to rural
areas.Thepapertriestoanalysethetechnologiesthathavethepotentialtoremoveblocks
tosustainedruralurbaninteractions.
Thepaperexploresissuesliketheconstraintsonurban-ruraloutsourcing,theimpactof
urban-ruraloutsourcingonproduction,andissuessuchasmigration;andthepotential
quantum or extent of this phenomenon. The paper also discusses the changing role of
agentsandtheimportanceofruralinfrastructureforfacilitatingurban-ruraloutsourcing.

IDENTIFICATION TOWARDS CLIENTS BY EMPLOYEES
OF OUTSOURCING SERVICE PROVIDERS
PrarthanBDesai,FellowStudent(OB-HRM),IndianInstituteofManagement
Bangalore.
Ph: 0-93425 62485, prarthanb02@iimb.ernet.in.
Employeesworkinginanoutsourcingserviceproviderorganisationareformallypartofthe
employingorganisation.However,theyspendasignificantpartoftheirdailyworklife
handlingtheoutsourcedbusinessprocessesofclientorganisations.Theyareexposedto
theorganisationalroutines,culture,andperformanceappraisalandrewardcriteriaofboth
organisations and therefore they may exhibit dual organisational identification — one
towardstheiremployingorganisationandtheothertowardstheirclientorganisations.
Organisationalidentificationreferstoemployees’perceptionofbelongingnesstotheir
organisation.Itisimportanttounderstandemployees’organisationalidentificationbecause
it can influence important individual outcomes, such as psychological well-being of
employees, and organisational level outcomes, such as cooperation among employees and
organisationalcitizenshipbehaviour.
This conceptual paper attempts to answer two research questions: (1) What are the
antecedentsspecifictotheoutsourcedbusinessprocessthatinfluencesalienceofemployee
identificationtowardstheclient?(2)Whatfactorswoulddeterminewhetheremployees’
identificationtowardtheclientisinconflictorincongruencewiththeiridentification
towardstheemployingorganisation?
Thepaperproposesthattherearecertainantecedentsspecifictotheoutsourcedbusiness
process, which influence the salience of employee identification towards the client
organisation,thesebeing:(1)codifiabilityoftheknowledge,(2)amountofinteraction
withthestakeholders(e.g.,suppliers,employees,orcustomers)oftheclient,and(3)
amountofrelation-specificinvestmentsrequiredbytheemployingorganisation.Thepaper
alsoproposesthattheemployees’identificationwiththeclientbeinginconflictorcongruence
withtheiridentificationwiththeemployingorganisationisdeterminedbythedifference
in:(1)organisationalcultureoftheclientandtheemployingorganisation,and(2)the
forcesofinstitutionalisomorphismprevalentinthecountrywheretheclientislocatedand
thecountrywheretheemployingorganisationislocated.

DEMOGRAPHIC COMPLEMENTARITIES AND
OUTSOURCING: IMPLICATIONS FOR INDIA
Amarendu Nandy, Research Scholar, Department of Economics, National
UniversityofSingapore.
amarendu@nus.edu.sg
MukulGAsher,Professor,LKYSchoolofPublicPolicy,NationalUniversity
ofSingapore.
sppasher@nus.edu.sg
ThispaperanalysestheimplicationsforIndiaofdifferingglobaldemographictrendsfor
outsourcingandoffshoring.Italsobrieflynotestheimplicationsofdifferingdemographic
trendsamongtheIndianstates.Thepaperarguesthatdemographiccomplimentarityprovides
Indiawithaone-timeopportunityforthenexttwotothreedecadeswhichitmustutilise
tosustainitsgrowthrateandoccupyallsegmentsofglobaloutsourcingandoffshoring
activities.Indiahashadadegreeofsuccessintheseactivities.Ithoweverfacesinternal
andexternalchallenges.WithappropriatepoliciesandfocusIndiacancontinuetomaintain
itsshare,andhelpnurturegloballycompetitivecompanies.

BPO AND THE EMPLOYMENT SCENARIO
IN THE INDIAN ECONOMY
GulnarSharma,Professor,JankideviBajajInstituteofManagement,
SNDT Women’s University, Mumbai.
drgulnarsharma@rediffmail.com
Sanjay Kaptan, Professor, Department of Commerce, SNDT Women’s
University,Mumbai.
BusinessProcessOutsourcing(BPO)asaprudentbusinesspolicytosustaincompetitive
advantageandgrowisnowagloballyacceptedfact.Thistrendtooutsourcecoversmany
industriesandseveralorganisationalfunctions,andhasthecapacitytogeneratehuge
employment.Ithasgeneratedemploymentattherateof13%sofarandislikelytogrowto
31%by2010.Differentfunctionsgeneratedifferentquantaofemployment,withthecustomer
care operation generating the highest employment. The ITES sector employed 41,000
employees in 1999 and the figure is expected to reach 1,100,000 by 2008. Revenues from
theindustry,whichstoodatRs20.30billionin1999,areexpectedtoreachRs.810billion
by2008.
While the BPO sector is fast developing and has tremendous employment potential, there
aremanyfunctionalproblemssuchasthehighalterationrate,costcuttingtechniquesand
alackofstabilityinthegenerationofemployment.Issueslikesecrecy,organisational
commitment and dedication to a particular value system are surfacing. There is every
possibilitythatintheyearstocometheseissuesmayturnouttobefunctionalproblems
andmayaffecttheorganisationalqualityofwork,workcultureandindustrialclimate.
ThispaperdealswithhowtheBPOindustrywillinfluencetheopportunitiesandchallenges
in relation to the employment scenario in India, and also analyses the impact of BPO on
employmentinIndia.Itattemptstoidentifyfactorsresponsiblefortheshiftinemployment
patternanditsimpactonthesectoralchangesinemploymentpattern.

THE WELFARE IMPLICATIONS OF
OUTSOURCING IN THE HOST COUNTRY
Arti Grover Goswami, Delhi School of Economics,
Ph: 91-11-27666703, Fax: 91-11-2766-7159, arti@econdse.org
Foreigndirectinvestment(FDI)maynotnecessarilybethemostwelfareenhancingformof
internationalinvestment.Thehostcountryhasamenuofoptionssuchasjointventure,
technologylicensing,franchising,outsourcingetc.Ahostcountry’schoiceoforganisational
form should depend on its growth and welfare effects. This paper compares the welfare
effectsofFDIwiththatofoutsourcinginthehostcountry,usingtheGrossman-Helpman
qualityladdersframework.Ifthehostcountry’sabsorptivecapacityisaboveagiventhreshold
level,outsourcingismorewelfareenhancingvis-à-visFDI.Ontheotherhand,evenwith
lowerthanthresholdabsorptivecapacity,outsourcingbeingwelfareimprovingascompared
toFDIcannotberuledout.Animplicationofthisisthatinvestmentinhumancapitalpays
off more when outsourcing is the chosen mode of organisation of fragmented production,
ratherthanFDI.

CO-LOCATION OF UNRELATED DIVISIONS: DYNAMICS
OF VALUE CREATION AND DESTRUCTION
SrinivasGunta,FellowStudent,IndianInstituteofManagement
Bangalore.
Ph: +91-80-26993014, Fax: +91-80-26584050,
srinivasg01@iimb.ernet.in
Outsourcinginserviceshasassumedtheroleofabusinessimperativewithinashortperiod
oftenyears,especiallyinthecontextofoffshoringtocountriessuchasIndia.Costadvantages
havegivenwaytoadvantagesintheareasofvalueadditionandstrategictransformationof
businesses. The focus has shifted to ways and means of organising for superior service
delivery–leadingtodecisionswithrespecttomode(offshoringvson-shoring),method
(captiveprovidervsthird-partyprovider)andmeans(specialisedprovidervsfull-lineprovider).
Mostoftheoutsourcingoutfitsareorganisedwithallthedivisionsco-located,especially
initially.Managerially,thisenablesconcentrationofdirectauthorityforoverallsupervision;
economically,itcutscostsduetopoolingofresourcesandbetterutilisationofcommon
infrastructure.Thisistrueofcaptiveaswellasthirdpartyprovidersandspecialised(in
termsoffocus)aswellasfull-lineproviders.
Anoutsourcingoutfittypicallyhasdifferentactivitiesorganisedintovariousdivisionssuch
assoftwaredevelopment,callcentresandtransactionprocessingcentres.Withinthisbroad
schemaofclassification,severaldivisionsorsub-divisionsmaybeorganisedbasedonthe
nature, periodicity and complexity of the work. This would obviously imply that the
qualifications,skillsetsandtheoutlookoftheemployeeswoulddifferaswell.Considering
thefactthattheadventofIThasenabled‘divisionofwork’toobviateco-location,itcan
beassumedthatco-locationofdisparatedivisionslacksacompellingreason.Co-location
insuchascenario,wherethedivisionsaredisparateandinter-divisionalemployeeslack
theskillstoevaluateotherdivisionsortheiremployees,posesaninterestingproblemfor
organisationtheorists.
The comparative evaluations that the divisions attempt of one another can take several
forms.Itcantaketheformofinter-divisionallearningthattakesofffromaninternal
competitionperspective;itcantakeaformthatlendsitselftoinformalknowledgetransfer,
andinextremesituations,itcantaketheformofdestructionofvalueattheorganisational
levelwhilebeneficialatthedivisionallevel.Thispaperreviewsliteratureintheareasofco-
locationandproductdevelopmentextensivelytodelineatethedynamicsofvaluecreation
anddestruction.Itcomesupwithpropositionsonthesuitabilityofco-locatingvis-à-vis
the modes, methods and means of outsourcing.

SouravMukherji, AsistantProfessor,OrganisationalBehaviourandHuman
Resources Management, Indian Institute of Management Bangalore.
Ph: 91-80-26993145, souravm@iimb.ernet.in
Thephenomenonof‘outsourcing’hasstartedtodominatethepresentbusinesslandscape.
Unlikeinthepastwhenorganisationswouldtypicallyoutsourcenon-coreactivitieslikethe
frontofficeorsecurityservices,today’sorganisationsareoutsourcingactivitiesthatare
criticaltotheirbusiness,suchasstrategyformulation,R&Dorhumanresourcemanagement.
Seniormanagers,therefore,needtohaveatheoreticalfoundationonwhichtheycanbase
theiroutsourcingdecisions.Inthispaper,Idrawupontransactioncoststheorytolaydown
aframeworkforanalysinganyoutsourcingdecision.Whenorganisationsoutsource,theygo
tothe‘market’forconductinganeconomicactivitythattheycouldhaveotherwiseconducted
withina‘hierarchy’,i.e.,withintheboundaryoftheirorganisation.Sinceboththe‘market’
andthe‘hierarchy’havetheirownsetsofcostsandbenefits,anoutsourcingdecision,inits
simplestform,isachoiceoftheoptionthathasabetterbenefit-to-costratio.Having
establishedthetheoreticalbasis,Ilookatspecificexamplesofoutsourcingdecisions
witnessedintheIndianindustry,suchasKingfisherAirlinesoutsourcinggroundhandling
facilitiestoIndianAirlinesorThermaxoutsourcingtheirstrategyformulationtoMcKinsey,
inordertoexplainthatorganisationstodayhavemultipleobjectivesbehindtheiroutsourcing
decisions.Iidentifyfourcategoriesofsuchobjectives,namelycostminimisation,accessto
privilegedassets,superiorresourceleverageandriskdiversification,whicharecollectively
exhaustivebutnotmutuallyexclusive.Whileexplainingeachofthesecategories,Ienrich
thetheoreticalframeworkproposedabovewithnotionsof‘knowledgespillover’and‘reputation
capital’–variablesthathavesofarremainedabsentorimplicitindiscussionsonoutsourcing.
I end this paper with an explanation of why outsourcing is a natural consequence of the
informationageandhowinformationtechnologyiscreatingmarketconditionssuitablefor
organisationstospecialise.Thispaperistheoreticalinnaturebutitdrawsextensivelyfrom
examplesofoutsourcingintherealworldinordertoexplainandapplythetheory.Whenit
comestooutsourcingdecisions,suchatheoreticalfoundationwouldenablethepractising
managertomovebeyondsimplisticargumentslike‘coreversusnon-core’or‘converting
capitalexpenditureintovariableexpenses’(bothofwhichareconsequencesratherthan
causesforoutsourcing)andenablethemtodoathoroughanalysisoftheobjectivesand
possibleconsequencesoftheiroutsourcingdecision.
OUTSOURCING: PRACTICE IN
SEARCH OF A THEORY

OUTSOURCING OF HEALTHCARE SERVICES IN
RAJASTHAN: AN EXPLORATORY STUDY
GyanPrakash, AssistantProfessor,SchoolofManagementSciences,
TezpurCentralUniversity,Assam.
Ph: 03712-267007 ext. 5013, gp@tezu.ernet.in
Avantika Singh, Lecturer, Department of Policy Studies, TERI School of
AdvancedStudies,NewDelhi.avantika@teri.res.in
Outsourcingtodayhasemergedasoneoftheseveralresponsestocorrecttheanomaliesin
publicprovisionofhealthcare,sharetheresponsibilityandincreasethepenetrationof
healthcareservices.Thispaperistheoutcomeofanexploratorystudyonoutsourcinginthe
DirectorateofMedicalandHealthServices(DMHS),GovernmentofRajasthan.Theobjectives
ofthisstudyaretounderstandtherationaleforoutsourcing,theinstitutionalarrangements
foroutsourcing,contractdesignanditdealswithsomeoftheexperiencesofimplementation.
ThestudyrevealsthatDMHSisoutsourcingbothancillaryandclinicalservices(preventive
andcurative).Ancillaryservicesaretangible,makingiteasiertodefinetheproductand
monitorperformance.However,definingtheproductismoredifficultandcostsofenforcing
thecontractarequitehighincaseofpreventiveandcurativehealthcare.Organisational
restructuringthroughagencificationandformationofRajasthanMedicalReliefSocieties
has lent the government autonomy and flexibility, and created formal mechanisms for
garneringtheparticipationofPPsandNGOsinthedeliveryofhealthcareservices.Though
outsourcing has been going on for some time now, the government is yet to lay down a
regulatory framework. Such a framework would serve to minimise uncertainties and lay
down an incentive structure. There is a need for economic regulation that promotes
competitionandatthesametimepreventsadverseoutcomessuchasescalationofcosts,
exploitationandinequity.Sinceservicedeliveryoccursintheprocessofinteractionbetween
clientandprovider,thereisaneedforasystemofqualitymeasurement.
A persistent concern with outsourcing is how it will affect the access of marginalised
groupstohealthcare.Withtheinvolvementoftheprivatesector,‘choices’haveimproved.
However,thepoormaybeseverelylimitedintheircapacitytoaccesstheseservicesbecause
oftheirinabilitytopay.Thoughtheprivatesectorcancomplementthegovernment’sefforts
andmaybeevendoitbetter,yetitcannotleadthehealthsectorinadirectionlikelyto
maximise its contribution to the health of the population. Therefore, the state cannot
relinquishitsresponsibilityofprovisionofhealthcaretoallinanequitablemanner.There
islimitedevidenceontheefficiencyandequityimplicationsofcontracting.Thisstudy
couldinfactserveasastartingpointforasystematicenquiry.
IndexTerms:Contractingout,outsourcing,publichealth,regulation.

SOFTWARE PRODUCT DEVELOPMENT
TRANSITION: MANAGERIAL IMPLICATIONS
FROM A SUBSIDIARY PERSPECTIVE
Vasanthi Srinivasan, Associate Professor, Organisational Behaviour and
Human Resources Management, Indian Institute of Management Bangalore.
Ph: +91-80-26993046, Fax: +91-80-26581602, vasanthi@iimb.ernet.in
BineeshKumarP,Student,PostGraduateProgrammeinSoftwareEnterprise
Management, Indian Institute of Management Bangalore.
Manymultinationaltechnologycompanieshaveoffshoredproductdevelopmentactivities
toIndia.Decisionsrelatedtothetransitionaredecidedbythetopmanagementlocatedat
the headquarters in consultation with the senior management in India, taking into
considerationthelong-termstrategicobjectivesoftheparentandthesubsidiary.Atransition
decision is made and communicated and at this stage a project team is formed to manage
thetransition.Sometransitionstendtobesuccessfulwhileothersdonot.Theobjectiveof
thisstudywastounderstandthepre-requisitefactorsforasuccessfultransitionusinga
groundedtheoryapproach.Fourprojecttransitionsinasinglemultinationalsubsidiary
werestudied.Basedonthesefourcases,anattempthasbeenmadetoidentifythefactors
thatarecriticalforsuccessfultransition.Thelifestageoftheproduct/project,the
composition of the existing team/new team, organisational motives for the transition,
perceivedandactualmanagementsupport,andcommunicationemergedasthefivefactors
whichappeartosignificantlyinfluencethesuccessorfailureofatransition.

REVERSE OUTSOURCING THROUGH HYBRID
SOURCING™ AND ITS EFFECT ON THE GLOBAL
DELIVERY MODEL
Abhishek Amal Sanyal, Software Quality Advisor, Software Engineering
PerformanceGroup,HSBCGlobalTechnologyLtd.,Pune.
Ph: 91-20-56037299, abhishekamalsanyal@hsbc.co.in
IT companies across the world, according to the norm, are going in for Global Delivery
Models (GDM) of outsourcing which aim at cost-effective IT system development and
deployment,andconsequentlyhaveputupdevelopmentcentresinlow-cost,distant-shore
locationslikeIndia,China,Philippines,etc.
Reverse Outsourcing through Hybrid Sourcing™ is the brainchild of three American IT
entrepreneurswhoclaimtobe‘bringingoutsourcingcloser’toAmericanshores.Intheir
scheme,theyplantoanchoracruiseshipjustoutsidetheterritorialwatersoftheUSA,so
as to bypass the stringent Worker Laws and the need of H1B visas. This ship will be the
living-and-workingareaofabout600IndianandRussiansoftwareengineerswhowillwork
at three times the salary they receive at home but 1/3 of the salary that would go to an
AmericandeveloperontheAmericanmainland.Consequently,thecoreandalliedoutsourced
jobswouldflowbacktoAmericaresultinginreverseoutsourcing.However,itwouldstill
leveragethetangibleandallimportantbenefitofreducedoverallcostsfortheclient
organisationandtheintangiblebutequallyimportantbenefitsofdatasecurity,client-
serviceproviderinteraction,publicopinion,local-job-creation,etc.
WithHybridSourcing™claimingtobefunnelling90%ofitsrevenuebacktotheAmerican
mainlandbutstillprovidingthesamelow-costandgoodqualitycombination,itisbuta
matteroftimethatReverseOutsourcingfindsitsfeetinthequicksandoftheglobaleconomy.
Insuchasituation,wheredoestheaveragesoftwareengineerondistant-shoresfindhimself?
Theauthorplanstoanalysethetwosystemsvis-à-visthefollowingfactors–
1. Costofinitiationandsustainedoperation
2. Perceivedclientbenefitsandlosses
3. Inherentadvantages,limitationsandoutrightdrawbacks
4. Legalandmoralissues
5. Impactondistant-shorejobs
FortheReverseOutsourcingmodel,theauthorlooksat Hybrid-Sourcing™beingofferedby
SeaCodeLtd.,SanDiego,USAwhile,forthetraditionaloutsourcingmodel,theGDMofan
IndianITServiceCompanyinthesamesphereofbusinessandoperatinginIndiaisexamined.

MANAGING STRATEGIC CHANGE THROUGH
OUTSOURCING IN LOGISTICS COMPANIES:
A SWEDISH PERSPECTIVE
SajalKabiraj,PhDStudent,ABV-IndianInstituteofInformationTechnology
and Management, Gwalior/ Product Manager - Analytics, Datamatics Inc.,
Sweden. skabiraj@rediffmail.com; kabiraj@vsnlnet
DPAgrawal,Member,UnionPublicServiceCommission,Govt.ofIndia,Delhi.
Ph: 011-24670835, prof_dpa@rediffmail.com; agarwaldp@yahoo.com
DeepaliSingh,AsstistantProfessor,ABV-IndianInstituteofInformation
Technology and Management, Gwalior.
Ph: 0751-2449803, Fax: 0751-2449808, deepalipsingh@gmail.com;
dr_deepali@iiitm.ac.in
Swedishlogisticscompaniesarefacingintensecompetitionwithbusinessesandlongterm
clientsmovingtolowcostdestinations.Thoughthismaybeattributedtotheoutsourcing
phenomenon,thispaperlooksatevolvingabusinessmodeltocontrolandlimittheflowof
customers through the Strategic Change Management process. The term strategic change,
asitisusedinthestrategicmanagementliterature,mainlyreferstothedevelopmentand
renewalofcorporatestrategiesinanenvironmentalcontextofexternalpressuresandthreats.
A need for such change is recognised when past experience, knowledge and competence no
longerfitthecircumstancesoftheexternalenvironment.Thisforcesmanagerstoshiftfrom
existingcompetenciestoexperimentationwithnewskillsandtheexplorationofmarket
opportunities. When strategic change is on the agenda, the organisation is forced to
internalisenewinformationaspartoftheorganisationalknowledgebase,developingnew
knowledge and competence.
Theauthorsdiscusstwocases,SchenkerLogisticsandDeutschePostNetWorldwide(better
knownasDHLWorldwideExpress)basedinJonkoping(Sweden),throughpersonalinterviews
conductedwith30managers,forgaininganunderstandingofthekindofchallengestopmanagers
faceinaturbulentenvironmentwhentryingtoalignstrategicintentandstrategicactionfor
supplychainmanagement.Thecasesalsoaffordinsightsintohowstrategicchangecanbe
managedandwhatmanagerscandotorecogniseandhandle‘strategicdissonance’forensuring
‘success’inthechangeprocesswhileoutsourcing. Thiscouldthrowlightonthetheoreticaland
practicalframeworks,criticisingtheconceptof ‘fit’ anditsunderlyingdualisticassumptions
aboutstrategyandstructure,organisationandenvironment,andstrategicintentandstrategic
action.Thepaperanalyseshowtheroleofsupplychainmanagementandtheuseofsupplychain
management competence change when outsourcing. The study indicates that supply chain
managementcompetenceisofsignificantimportancenotonlyforefficientlogisticsprocess
management,butalsofornewproductdesignandprocurement,regardlessoftheextentof
outsourcing.Thedifferentwaysofintegratingsupplychainmanagementwithvariousfunctions
andprocessesbothwithintheorganisationandwithsuppliersarediscussed.
Keywords:SupplyChainManagementStrategy,StrategicChange,Outsourcing,BusinessModel

INDIA INC’S CLAIM TO THE
INTERNATIONAL DISPUTE
RESOLUTION MARKET
Aakash Prasad and Vivek Rathore, National Academy of Legal Studies and
Research,Hyderabad.
In the present era of global commerce, the employment of efficient legal and dispute
resolutionservicesbecomescrucialasinterfacewithlawisimperativeatalllevelsoftrade,
bothnationalandinternational.Furtherinthisageofglobalisation,legalservicesare
becomingglobal,thusallowinglegalprofessionalstotranscendbordersandbecomepartof
aninternationalworkforce.Thispaperaddressesthechangingtrendsinthecontextof
legalservicesandoutsourcing.
Thepaperlooksatwhyitmakessensetooutsourcelegalservices.Primarilythreeaspectsof
outsourcingarecovered:Firstly,outsourcingtheprocesspartoflegalservicesi.e.the
growingareaofLegalProcessOutsourcing(LPO)andtheopportunitiesitcanofferIndia.
Secondly,abriefanalysisoftheIndianlegalsystem,withreferencetoitscounterparts
namelyChina,theUSandtheUK,andtheopportunitiesitoffersforoutsourcing.Thirdly,a
studyofthepresentIndianlegalscenarioandareasforreform,andtheIndianclaiminthe
AlternativeDisputeResolution(ADR)market.Thepaperalsooffersacasestudyofasector
thatgivesimmenseinsightintothemajordebatessurroundingoutsourcingandthefactors
whichactuallyenhancecompetitivenessthroughoutsourcing.

D.K.Agrawal Fore School of Management, New Delhi
D.P.Agrawal Member,UnionPublicServiceCommission,
Govt.ofIndia,Delhi
James Agarwal UniversityofCalgary,Canada
SrinivasAinavolu IndianInstituteofManagement,Calcutta
MukulG.Asher NationalUniversityofSingapore
ArindamBanerrji MD & COO, Deutsche Bank Operations
International
B.R.Bhardwaj BharatiVidyapeethInstituteofManagement
andResearch,NewDelhi
Ravan Boddu CEO,iSoftIndia
Rupa Chanda IndianInstituteofManagementBangalore
AbhijitChaudhary BryantUniversity,RhodeIsland
Amitabh Chaudhry ManagingDirector&CEO,ProgeonLtd.
Sangeetha Chhabra LalBahadurShastriInstituteofManagement
SanjayChoudhari NationalInstituteofConstruction
Management and Research, Pune
Paramita Deb Gupta IndianCouncilforResearchonInternational
EconomicRelations
PrarthanBDesai IndianInstituteofManagementBangalore
L.S.Ganesh IndianInstituteofTechnology,Madras
AshutoshGarg NationalInstituteofConstruction
SuveeraGill UniversityBusinessSchool,PanjabUniversity
ArtiGroverGoswami DelhiSchoolofEconomics
Name Institution
LIST OF SPEAKERS

Name Institution
LIST OF SPEAKERS
KalyanKGuin IndianInstituteofTechnology,Kharagpur
SrinivasGunta IndianInstituteofManagementBangalore
Anoop Hegde CountryManager,FirstIndianCorporation
T.J.Joseph ICFAIInstituteforManagement
Teachers(IIMT),Hyderabad
SajalKabiraj ABVIndianInstituteofInformation
Technology and Management, Gwalior
SanjayKaptan SNDT Women’s University, Mumbai
BalaKrishnamoorthy Narsee Monjee Institute of Management
Studies,Mumbai
GopalKrishnan Founder,ChairmanandManagingDirectorof
NinestarsInformationTechnologiesLimited
Bineesh Kumar P IndianInstituteofManagementBangalore
T.K.Kurien CEO, Wipro BPO
NareshKMalhotra GeorgiaInstituteofTechnology
K. Manasa WiproTechnologies,Bangalore
Naveen Marimuthu MindtreeConsulting,Bangalore
VanV.Miller HumanandEcologicalResources,LosOjos,USA
K. Momaya IndianInstituteofTechnology,Delhi
ArpitaMukherjee IndianCouncilforResearchonInternational
EconomicRelations
PradeepMukherjee Tholons,AsiaPacificHQ,Bangalore
Ananda Mukherji TexasA&MInternationalUniversity,USA
JyotsnaMukherji TexasA&MInternationalUniversity,USA
SouravMukherji IndianInstituteofManagementBangalore

Name Institution
LIST OF SPEAKERS
Venkata Reddy Muppani IndianInstituteofTechnology,Bombay
C.S.Murali VP,CorporateInitiatives,Cognizant
TechnologySolutions
VarunNagalia Narsee Monjee Institute of Management
Studies,Mumbai
PriyanRNaik LarsonandToubroLimited
Amarendu Nandy NationalUniversityofSingapore
Jogendra Kumar Nayak IndianInstituteofTechnology,Kharagpur
PeterDOrbergJensen Copenhagen Business School, Denmark
JasonMPattit SnyderCentreforInnovationManagement,
SyracuseUniversity
GyanPrakash SchoolofManagementScience,Tezpur
CentralUniversity,Assam
AkashPrasad NALSARUniversityofLaw,Hyderabad
Arunabh Prasad Gupta NationalInstituteofConstruction
Shameen Prashantham UniversityofStrathclyde,UnitedKingdom
Nadathur S Raghavan Co-founder,InfosysTechnologiesand
Nadathur Investments and Holdings
S.P.Raj CornellUniversity,Ithaca,NY
U.SrinivasRangan BabsonCollege,USA
Vikram Rao Pesident,MaduraGarments
VivekRathore NALSARUniversityofLaw,Hyderabad
Sanjoy Roy Choudhary AssistantVicePresident,Evalueserve
Abhishek Amal Sanyal HSBCGlobalTechnologyLtd.,Pune

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