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The Impact of Captive Innovation Offshoring on the Effectiveness of Organizational Adaptation

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Author

Summary, in English

We analyze the effects of captive offshoring of innovation activities on the firms' ability to adapt their organizational structures. Basing our arguments on the complexity theory, we use three consecutive waves of the German part of the Community Innovation Survey to test our hypotheses. We find an inverted u-shape of innovation offshoring on the effectiveness of organizational adaptability, implying an optimal threshold value of innovation offshoring. This value is 11% for the share of off shored R&D, 15% for downstream innovation activities such as local market adaptation, and 34% for design activities. We also analyze several contingency variables. In particular, we show that the costs of innovation offshoring in terms of reduced organizational adaptation are increased by a regional dispersion of the offshoring activities and strong embeddedness in onshore networks. We also show that smaller firms find it easier to deal with the management complexity induced by geographical dispersion of innovation activities. 2015 Elsevier Inc. All rights reserved.

Department/s

Publishing year

2015

Language

English

Pages

150-165

Publication/Series

Journal of International Management

Volume

21

Issue

2

Document type

Journal article

Publisher

Elsevier

Topic

  • Business Administration

Keywords

  • Internationalization
  • Offshoring
  • Innovation
  • Organizational adaptation
  • Organizational adaptability

Status

Published

ISBN/ISSN/Other

  • ISSN: 1075-4253