Paulo Roberto Gião y Moacir de Miranda Oliveira Junior
This paper handled with offshoring aspects, especially related to offshore outsourcing, considering the value chain and also the RBV theory to explain the miss of potentialities from outsourcing firms and the appearance of new firms in international market. These new firms appear as real competitors to outsourcing firms, in some cases with products and services with high quality, good price, according to international specifications and sometimes very innovative features. The term potentialities were used in the paper to represent skills, resources, capabilities, competences or any other component of the RBV theory. The intention is not to create a neologism but to fill a gap while referring to this important approach.
There is no doubt that at least in short and mid-term, the offshore outsourcing continues to provide competitive advantage to outsourcing firm. When a potentiality is not available inside the firm, the look for that in the market is also yet considered by Williamson (1979) and some important complements can be done. The strategic, quality and time-to-market perspectives are also variables to be appreciated in a changing fast world.
The value chain and potentialities (representing RBV research line) are helpful to identify what can be outsourced and what can be keep inside the firm. However, two important reflections can be done related to both research questions. First, if the value chain could be seen as a more dynamic system and the activities as more fluidic entities, overlapping each other and sharing potentialities throughout the firm, the comprehension could be more realistic and closer to what observed in organizations. Second, the interpretation and application of so many ramifications of RBV for outsourcing purposes are very difficult and it seems that if all concepts and variants should be applied, firms could go to a stagnation state and the vertical integration should be the only answer in many cases, in a very different tendency as seen nowadays.
Considering the value chain as a discrete number of continuous activities with no fixed boundaries and that the potentialities is not completely controllable at internal and external interfaces, new developments in management areas can happen to help firms in their dynamic environment and decisions.
The presented interpretation for the value chain has some advantages to understand the relation among internal activities of a firm and its external environment, and some remarks can be detached. First, each firm has its own value chain interpretation based on internal organization structure and formal and informal potentialities flows through it. Second, the framework considers the existence of potentialities (at least part of them) at the boundaries of the activities, and not confined in a specific activity, as quoted by many authors. Third, potentialities are fluidic things that don’t respect functional boundaries, and are necessary for the firm operation (in formal and informal ways) but also can be an escape point in outsourcing process. Forth, the fluidic potentialities spread internally and/or externally can be explicit or tacit.
Also, as the presented scenarios show that even being an internal firm aspect (competences, etc.) cannot be handle in a standalone way. It is necessary search in market what is being outsourced by competitors, to whom, and maybe in different industries. In other words, the procedure is much more complicated than only identifying internal firms’ core competences and outsources the non-core activities. A remarking point here is that what is a non-core activity from one firm can be a core activity in another firm and the outsourced company can receive both and build its own value chain related to these activities. And it is important to remember that all scenarios were done in a best case perspective for the activities of the value chain, with only a small quantity of KI in the boundaries. Extending the scenarios to overlapping activities is closer to the real world and the dangerous to outsourcing companies even greater.
Another important aspect of the presented representation of value chain is that no moment we said anything about intellectual property (IP) violation. Any kind of IP violation must be punished following legal procedures, but as this interpretation of VC and lacks in RBV theory, potentialities can be shared from one or multiples firms to one or multiple outsourced firms with no disaccord of IP agreements. It is important to keep in mind that the skilled workers in emerging countries are more prepared than 20 years ago and have more conditions to understand, learn, make conjectures, build their own potentialities and develop new products and innovations based on their own tacit knowledge.
Another interesting question maybe for further studies is: where are the innovations developed or created in this disintegrated VC with integrators and specialized firms? Maybe the best answer is in both places. It depends naturally what (exactly?) is being outsourced and the strategic intentions of the outsourced firm. An outsourced firm can develop new solutions for a previous query from a firm and offer to her for a new adjustment in contract values. The contracting firm can accept or not these solutions, and in case of not acceptance, the outsourced company can offer to other firms (maybe competitors from the first one) or even introduce in its own products and services.
In a world of very strong brands, Microsoft, Google, Coca-Cola, Nokia, HSBC, Apple, Dell, HP, and many others, it is not sufficient for outsourced firms have access to core-KI but also to build their own strong brands. In this field, the examples of Korean firms can be followed carefully because maybe ten years ago, brands like LG, Samsung or Hyundai are not so known and even if known the liability from the customers perspectives were not so clear. Certainly it doesn’t happen anymore and these brands are international strong competitors in several industries.
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