Getting the most from offshoring: home base capability upgrading and erosion

Tapping into global resources is supposed to improve performance and contribute to a firm’s competitive advantage. However, a high offshoring quota may also lead to erosion of the firm’s home base capabilities and have wider negative implications for both the home base site position and the firm as a whole. The purpose of this paper is to conceptualize this scenario and propose how its adverse impacts can be addressed. From previous studies we know that the roles and mandates of home based sites of offshoring companies are changing from broad scoped manufacturing towards innovation and network orchestration. On the basis of the findings from the survey, series of workshops and case studies of Danish companies presented in this paper, we seek to determine the longer term effects of offshoring for home based sites. We conceptualize the findings in a framework and close with discussing the need for sourcing and assimilating operations inputs at the home base as a means for sustained innovation and network orchestration.