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

Research output: Contribution to journalArticle

Abstract

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.

Details

Authors
Organisations
External organisations
  • Fraunhofer Institute for Systems and Innovation Research
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Business Administration

Keywords

  • Internationalization, Offshoring, Innovation, Organizational adaptation, Organizational adaptability
Original languageEnglish
Pages (from-to)150-165
JournalJournal of International Management
Volume21
Issue number2
Publication statusPublished - 2015
Publication categoryResearch
Peer-reviewedYes