Journal of Knowledge ManagementOutsourcing of knowledge processes: a literature reviewIngi Runar Edvardsson Susanne Durst
Article information:To cite this document:Ingi Runar Edvardsson Susanne Durst , (2014),"Outsourcing of knowledge processes: a literature review", Journal ofKnowledge Management, Vol. 18 Iss 4 pp. 795 - 811Permanent link to this document:http://dx.doi.org/10.1108/JKM-01-2014-0033
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Outsourcing of knowledge processes:a literature review
Ingi Runar Edvardsson and Susanne Durst
Ingi Runar Edvardsson isa Professor and is basedat School of Business,University of Iceland,Reykjavik, Iceland.Susanne Durst is anAssistant Professor and isbased at School ofBusiness, University ofSkövde, Skövde, Sweden.
AbstractPurpose – This paper aims to review research on outsourcing of knowledge processes to establish thecurrent body of knowledge and, on this basis, to identify gaps in our understanding. This action willjustify further research activities and clarify where no future research is currently needed.Design/methodology/approach – The study consists of a systematic review of 24 refereed empiricalarticles on outsourcing of knowledge processes.Findings – Five themes were identified: outsourcing of knowledge processes, outsourcing andcollaborative agreements between knowledge-based firms, factors affecting successful knowledgeoutsourcing, knowledge management and knowledge outsourcing and other outsourcing issues. Thereseems to be a lack of understanding concerning knowledge process outsourcing.Research limitations/implications – This study may not have enabled a complete coverage of allempirical articles in the field of knowledge process outsourcing. Yet, it seems reasonable to assume thatthe review process covered a large share of studies available.Originality/value – To the best of the authors’ knowledge, no systematic literature review on this topichas previously been published in academic journals.
Keywords Knowledge management, Outsourcing, Literature review, Knowledge processes,Knowledge-based firms
Paper type Literature review
Introduction and background
Among the most extensive business trends in recent years is outsourcing (Kakabadse andKakabadse, 2002). Outsourcing has been defined as transferring a business activity orfunction from a company to an external contractor who takes control of the activity’s inputsand then performs that function, selling it back to the company (Tadelis, 2007).
Originally, cost reduction, such as labour cost, transport and other cost, was one of themost cited rationales for outsourcing, particularly in manufacturing. More prominentstrategic reasons have recently characterised outsourcing, including focusing on corecompetencies; gaining access to unique resources, skills and talents and capabilitiespossessed by other firms, such as the latest technology and infrastructure; this has beenparticularly true of service firms (Di Gregorio et al., 2009; Kremic et al., 2006; Quinn, 1999;Vietor and Veytsman, 2005). Earlier studies have suggested that the less complex and themore structured the business function is, the more often it is a candidate for outsourcing.Similarly, functions involving less asset specificity and impacting fewer employees couldwell be regarded as prime choices for outsourcing (Kremic et al., 2006). Quinn (1999)suggests that functions carrying low strategic risks and low potential for a competitiveadvantage should be considered for outsourcing. In most cases, standardised processeshave been outsourced. It is, therefore, an interesting question why organisations decide tooutsource high-end processes that are important in their value creation. Such processesare termed knowledge processes and require competitive knowledge, analytical thinkingand judgement and highly specialised skills (Lacity and Willcocks, 2013). Examples of
Received 30 January 2014Revised 8 May 201412 May 2014Accepted 17 May 2014
DOI 10.1108/JKM-01-2014-0033 VOL. 18 NO. 4 2014, pp. 795-811, © Emerald Group Publishing Limited, ISSN 1367-3270 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 795
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such processes are animation, medical processes, research and development (R&D),engineering, technical services, market research, legal processes, financial planning andrisk management (Lacity and Willcocks, 2013). Knowledge process outsourcing (KPO)thus refers to the practice of outsourcing such aspects. It was pointed out that more andmore organisations choose to outsource product developmental functions, such asengineering and R&D and product design. They argue that the strategy behind thisdevelopment is to gain access to pools of highly talented people around the world. This isrelated to a growing shortage of highly educated individuals in the home country, such asengineers, and the rise of science and engineering clusters in emerging economies.Advances in information and communication (ICT) technologies have made this possible(Bhalla and Terjesen, 2013).
The developments outlined above may eventually have various effects on companies. First,Currie et al. (2008, p. 96) argue that:
[. . .] most knowledge of the type that gives competitive advantage to firms is not explicit, buttacit, since it resides in the minds of individuals, and is gained through the acquisition of skilland experience. It is this type of knowledge that is usually associated with the core capabilitiesof organisations.
What does this mean for the core competencies of the firms involved? Can outsourcinghigh-end processes contribute to their competitive advantage or does it weaken their corecompetencies?
Second, unlike traditional knowledge management (KM), knowledge outsourcing is basedon external experts that generate knowledge-intensive assets which are subsequentlyinternalised by the organisation (Lam and Chua, 2009). This means a change in the valuechain, where parts of the in-house transformation of products and services are transferredto other firms, thus altering the KM process. Knowledge creation and innovation (to identifyand capture) is likely to be most affected, as well as knowledge conversion, which involvesmeasures concerning the storage, filtering and correction of knowledge. The classificationof knowledge into tacit and explicit knowledge (Polanyi, 2009) may be helpful in the contextof knowledge transfer, as the specific nature of the two types of knowledge is likely toimpact the success of the transfer process. Advanced ICT technologies have beenconsidered to be at the centre of knowledge codification. Such technology facilitates KM,especially in large, geographically dispersed organisations. This may work best for explicitknowledge, however, as, given the specific nature of tacit knowledge, it can only betransferred by personal communication (Gorman, 2002) which particularly applies tocomplex technology exchange. Former research has shown (Wang and Noe, 2010) that anumber of factors affect knowledge sharing within and between organisations. Theseinclude organisational context (management support, rewards, structure, organisationalculture and climate – where trust is of particular importance); interpersonal and teamcharacteristics; and motivational factors, such as beliefs of knowledge ownership, justiceand perceived benefits and costs. So how does outsourcing of knowledge processes affectthe transfer and implementation of innovation developed by outside organisations?
Third, knowledge-based firms provide services to customers or other firms. In most cases,they produce an intangible output rather than a tangible product. Another characteristic ofsuch services (as well as services in general) is that consumption and production oftenhappen simultaneously, and the customer is highly involved in the production of services,which is not the case with physical goods. Finally, services tend to be more labour andknowledge intensive than goods (Daft, 2007; Targowski, 2009). All these aspects, and, inparticular, the different involvement of the customer, are highly relevant to the motives andrealisation of outsourcing in service firms. In some services, for instance, the co-location ofcustomers and service providers is quite important; the outsourcing potential is, therefore,limited (Bettencourt et al., 2002; Murray et al., 2009). Knowledge staffs apply theoreticaland analytical knowledge to their jobs, and in many cases, they use non-routine tacitknowledge and are involved in innovation and customisation (Muller and Doloreux, 2009;
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Murray et al., 2009). Consequently, how does outsourcing affect these processes when, forinstance, product development is transferred to another company?
Fourth, outsourcing can act as a role model for organisational learning. An example is theoutsourcing of information technology (IT) to an outside vendor. In such a situation, a greatdeal of tacit knowledge has to be converted into explicit knowledge to transfer the businessspecificity to the vendor. In the process, new rules, routines and procedures are developedto manage the outsourced IT activity. In time, these rules and routines will be internalised(Yakhlef, 2009). Another example is a firm’s ability to learn and use external knowledge(innovation from suppliers) to improve the cost structure, quality and timeliness of theirproducts and services (Azadegan et al., 2008).
Given that outsourcing of knowledge processes is of recent origin, general understandingis rather limited regarding the drivers and outcomes of such developments. Having this inmind, the aim of this paper is to review research on outsourcing of knowledge processesto establish the current body of knowledge and, on this basis, to identify gaps in currentunderstanding. The following research questions were formulated in accordance with theaim of the paper:
RQ1. Which were the main findings of the studies?
RQ2. What types of knowledge processes have been outsourced?
RQ3. How does outsourcing affect core competences of organisations?
RQ4. What contributes to success in outsourcing of knowledge processes?
The remaining paper is organised as follows. In the next section, the method used is brieflydiscussed. This is followed by a presentation of the results. The paper ends with theconclusion and implications of the study.
Methodology of literature review
In the review process, the authors adopted the principles of a systematic review asrecommended by Jesson et al. (2011), namely:
� mapping the field through a scoping review;
� comprehensive search;
� quality assessment;
� data extraction;
� synthesis; and
� write-up.
First, the authors developed a research plan comprising the research questions they wereinterested in answering. This also involved the keywords, and a set of inclusion andexclusion criteria. The authors were interested in the current status of research onoutsourcing of knowledge processes to identify promising areas for future research. Thequestions formulated, as outlined above, were:
RQ1. Which were the main findings of the studies?
RQ2. What types of knowledge processes have been outsourced?
RQ3. How does outsourcing affect core competences of organisations?
RQ4. What contributes to success in outsourcing of knowledge processes?
It was decided to use multiple keywords to identify relevant studies, such as outsourcing,offshoring, knowledge competence, knowledge-intensive firms/companies andknowledge-based service. The inclusion criteria were empirical research papers,peer-reviewed, English language, ProQuest and Web of Science databases. Grey literature
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such as reports and non-academic research was excluded, as well as languages otherthan English and databases other than ProQuest and Web of Science.
Additionally, the authors produced an Excel data sheet consisting of key aspects related tothe research aim. In this case these were: name(s) of author(s), year of publication,research aim/objectives, theoretical perspective/framework, method, main findings andname of the journal.
Second, once the authors had specified all the relevant issues, one of the authorsaccessed ProQuest and Web of Science and searched using combinations of thekeywords set. Combinations of these keywords were looked for in the title, keywords andabstract. The literature review included papers published until 28 October 2013.Depending on the combination of keywords used, different numbers of hits weregenerated. For example, the keyword combination “outsourcing” and “knowledgecompetence” resulted in 16 hits with ProQuest, the combination “outsourcing” and“knowledge-based services” resulted in 66 hits with ProQuest and the combination“outsourcing” and “knowledge-intensive firms” resulted in 20 hits with Web of Science.Altogether 13 searches were conducted resulting in 184 hits in total. Additionally, to makesure that the search included all papers from relevant journals, the highest ranked KMjournals were also searched. These are the Journal of Knowledge Management, Journal ofIntellectual Capital and Knowledge Management Research and Practice (Serenko andBontis, 2009). This procedure resulted in additional 114 hits.
Third, both authors manually scanned the abstracts of the 298 respective papers and, ifrelevant, more parts of the articles to make sure that they actually fell within the selectedscope of interest. This reduced the number of articles without duplications to the finalnumber of 24 which fulfilled the predetermined criteria and were then analysed.
Fourth, the papers were divided among the authors; that is, each author read 12 papers,respectively. Both entered relevant data regarding the research purpose in the Excel sheet.
Fifth, in the next stage, the findings were discussed, individual data synthesised into oneand themes identified. This helped to establish the current body of knowledge with regardto outsourcing of knowledge processes.
Sixth, the final stage of the review process was devoted to the write-up of the findings.
A critical aspect of any research is to demonstrate the trustworthiness of the data provided.This leads to the concept of reliability. Reliability can be defined as “the degree to which ameasure of a concept is stable” (Bryman, 2012, p. 715). In this study, reproducibility orinter-coder reliability is likely to be an issue. It refers to the extent different coders agree inthe coding of the same items (Klenke, 2008). To increase inter-coder reliability, the authorsof this study, who are experienced researchers and long-time collaborators, conducted thecoding. Communication between the two authors was coordinated by regular documented(online) meetings and by sharing the analysis. This also included a permanent cross-checkof themes by comparing the results which were independently derived (Creswell, 2009).
Presentation and discussion of findings
Among the 24 papers that formed the basis for this analysis, the oldest publication is from2003 and the most recent ones are from 2013 (three papers). One of the papers waspublished in 2007. Four papers were published in 2008, three in 2009, two in 2010, four in2011 and five in 2012. No papers were published in 2004-2006.
In the sections below, the authors present the analysis concerning the following aspects:general observations which outline the research methods applied and countries involved.After that the study’s main findings according to the themes identified are presented,followed by a list of future research directions.
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General observations
With regard to methodology, the most common methods are surveys (nine papers), casestudies (eight papers) and interviews (four papers). Additionally, focus groups, secondarydata and a mixed-methods approach (one of each) were used as research procedures.Three papers were identified which were longitudinal in nature (Grimshaw and Miozzo,2009; Miozzo and Grimshaw, 2011; Ørberg-Jensen, 2012).
The articles reviewed demonstrate that research on outsourcing of knowledge processesis highly dispersed, involving the USA, India, South Korea, Russia, Ireland, Spain,Germany, Switzerland, the UK, Argentina, Brazil, China, Malaysia, Finland and Denmark.Some studies were limited to the regions involved, e.g. Europe (two papers), WesternEurope (two papers), Eastern Europe (one paper), Scandinavia (one paper), Latin America(one paper) and other regions (one paper). Two papers cannot be assigned.
Furthermore, the findings illustrate that most studies on KPO have been published injournals in the fields of information management, management and strategy.
Body of knowledge regarding the outsourcing of knowledge processes
The main findings of the investigated studies were summarised under five topics:outsourcing of knowledge processes, outsourcing and collaborative agreements betweenknowledge-based firms, factors affecting successful knowledge outsourcing, KM andknowledge outsourcing and other outsourcing issues. These topics emerged by groupingtogether papers that dealt with similar themes.
Outsourcing of knowledge processes
Eight papers can be assigned to this topic (Table I). They provide insights into the processof outsourcing considering specific business functions. The outsourcing processes studiedare financial services (Currie et al., 2008), human resource management (HRM; Grimshawand Miozzo, 2009), IT outsourcing and offshoring (Holzweber et al., 2012), legal processes(Lacity and Willcocks, 2013), pharmaceutical new product development (Lowman et al.,2012), accounting (Maelah et al., 2012), advanced manufacturing and service tasks(Ørberg Jensen and Pedersen, 2012) and technical support centres (Chen et al., 2010). Informer studies, some of these processes, such as IT and accounting, have been regardedas supporting functions in the firms that are outsourcing (Kremic et al., 2006; Quinn, 1999).In computer companies and law firms, however, such activities are considered as coreprocesses. No studies were identified that addressed the outsourcing of business functionssuch as R&D, product design, engineering, animation or marketing. Those businessfunctions could be more related to the firms’ core competences, which may explain thislack of studies.
The findings suggest that the motives for outsourcing knowledge processes are basicallyto gain access to expert knowledge and lower cost. Ørberg Jensen and Pedersen (2012)found that outsourcing of advanced tasks to foreign countries is a strategy firms can applyto achieve international competitiveness through access to cross-border knowledge flowsand foreign knowledge resources. In legal firms, outsourcing to low-cost locations iscommon to reduce cost, while keeping some basic functions in-house to ensure qualityservices (Lacity and Willcocks, 2013).
Outsourcing and collaborative agreements between knowledge-based firms
Nine papers were found that deliver insights into outsourcing from a collaborative point ofview (Table II). As the success of outsourcing activities is likely to be influenced by thequality of the outsourcing parties’ relationships (Henley, 2006), studies addressing thistopic with regard to knowledge-intensive firms are significant. For instance, Bhalla andTerjesen (2013) reveal that new knowledge-intensive firms which outsource to highlyembedded suppliers are likely to gain access to rich networks and attain “best-in-class”
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Tab
leI
Art
icle
son
outs
ourc
ing
ofkn
owle
dge
proc
esse
s
Aut
hor(
s)(y
ear)
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earc
hai
ms/
obje
ctiv
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eore
tical
per
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tive/
fram
ewor
kM
etho
d(e
mp
irica
l/the
oret
ical
)M
ain
find
ing
sJo
urna
l
Che
net
al.(
2010
)To
exp
lore
the
imp
act
ofna
tiona
lcu
lture
onth
est
ruct
ured
know
led
ge
tran
sfer
from
aU
S-
bas
ed(o
nsho
re)
tech
nica
lsu
pp
ort
cent
reto
anof
fsho
resu
pp
ort
cent
rein
Chi
na
Lite
ratu
rere
latin
gto
know
led
ge
tran
sfer
Bas
edon
anin
terp
retiv
eca
sest
udy,
invo
lvin
gd
ocum
ent
revi
ew,
par
ticip
ant
obse
rvat
ion
and
sem
i-st
ruct
ured
inte
rvie
ws,
cond
ucte
din
anof
fsho
rete
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cals
upp
ort
cent
re(T
SC
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cate
din
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ian,
Chi
na
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ngS
zula
nski
’s(1
996)
four
stag
esof
know
led
ge
tran
sfer
,th
efin
din
gs
ind
icat
est
rong
evid
ence
that
diff
eren
tIC
,P
Dan
dU
Acu
ltura
ldim
ensi
ons
have
asi
gni
fican
tim
pac
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know
led
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tran
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incr
oss-
cultu
ralb
usin
ess
cont
exts
;as
criti
calb
arrie
rsto
know
led
ge
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and
know
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sar
esu
gg
este
d,
asw
ella
skn
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dg
eg
aps,
cultu
rala
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and
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kre
latio
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ps
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nalo
fKno
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dg
eM
anag
emen
t
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rieet
al.(
2008
)To
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yse
know
led
ge
pro
cess
outs
ourc
ing
infin
anci
alse
rvic
esfr
omth
eve
ndor
per
spec
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Kno
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e-b
ased
firm
s;kn
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e-b
ased
outs
ourc
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alys
isd
raw
sfr
omd
ata
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edK
PO
vend
ors
Find
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gg
est
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eg
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ually
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ing
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alue
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ased
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clud
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9)To
inve
stig
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sour
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tp
ract
ices
that
und
erp
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In-d
epth
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M&
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inG
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,A
rgen
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and
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ewor
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stan
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urke
yin
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onH
RM
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rge
spec
ialis
tK
IBS
firm
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inte
r-or
gan
isat
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ight
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anis
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ns);
ii)co
ntra
ctp
erfo
rman
ceco
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(out
sour
cing
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ract
s);
iii)
know
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ge
flow
s(in
ter-
org
anis
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hig
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wor
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)
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Tab
leI
Aut
hor(
s)(y
ear)
Res
earc
hai
ms/
obje
ctiv
esTh
eore
tical
per
spec
tive/
fram
ewor
kM
etho
d(e
mp
irica
l/the
oret
ical
)M
ain
find
ing
sJo
urna
l
Low
man
etal
.(2
012)
Toex
amin
eth
eim
pac
tof
the
incr
ease
inou
tsou
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the
way
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-and
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uct
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roce
ssan
dto
dis
cuss
the
pot
entia
lha
rmof
this
for
such
ind
ustr
ies
Lite
ratu
reon
inno
vatio
nou
tsou
rcin
gB
ased
onca
sest
udy
met
hod
olog
yru
nin
pha
rmac
eutic
alin
dus
try
invo
lvin
gex
per
tin
terv
iew
san
dsu
pp
lem
enta
ldat
a
Inth
eco
ntex
tof
new
bus
ines
sm
odel
s,th
est
udy
hig
hlig
hts
the
need
toup
hold
abso
rptiv
eca
pac
ity,
diff
use
know
led
ge,
sup
por
tin
tera
ctiv
ele
arni
ngto
avoi
dth
eris
kof
losi
ngco
ntro
land
mai
ntai
ncr
eativ
ityop
por
tuni
ties
for
new
pro
duc
ts
Tech
nova
tion
Mae
lah
etal
.(20
12)
Toex
plo
reth
ep
ract
ices
,d
ecis
ions
,p
roce
sses
and
per
cep
tion
ofris
ksan
dco
ntro
lin
acco
untin
gou
tsou
rcin
g
Lite
ratu
reon
acco
untin
gou
tsou
rcin
gS
urve
yd
isse
min
ated
amon
gac
coun
tsan
dfin
ance
dep
artm
ent
ofM
alay
sian
com
pan
ies
Stu
dy
ind
icat
esth
atfir
ms
rely
mor
eon
form
alco
ntra
cts
and
conc
erns
abou
tco
nfid
entia
lity
and
secu
rity
ofac
coun
ting
dat
a
Jour
nalo
fAsi
aB
usin
ess
Stu
die
s
Ørb
erg
Jens
enan
dP
eder
sen
(201
2)To
exp
lore
the
ante
ced
ents
toof
fsho
ring
ofad
vanc
edm
anuf
actu
ring
task
sas
wel
las
adva
nced
serv
ices
task
s
Lite
ratu
reon
FDI,
tran
sact
ion
cost
sec
onom
ics
and
reso
urce
-b
ased
view
Tele
pho
nein
terv
iew
sw
ithfir
ms
inth
eea
ster
nre
gio
nsof
Den
mar
kin
the
follo
win
gse
ctor
s:m
anuf
actu
ring
,ut
ilitie
s(e
lect
ricity
,g
asan
doi
l),tr
ansp
orta
tion,
finan
cial
(ban
king
,in
sura
nce)
and
bus
ines
sse
rvic
esan
dof
ficia
lfirm
stat
istic
s
The
find
ing
sin
dic
ate
that
whi
leth
elo
wer
cost
ofun
skill
ed,
lab
our-
inte
nsiv
ep
roce
sses
isth
em
ain
driv
erfo
rfir
ms
that
offs
hore
less
adva
nced
task
s,th
eof
fsho
ring
ofad
vanc
edta
sks
isp
art
offir
ms’
stra
teg
yto
achi
eve
inte
rnat
iona
lco
mp
etiti
vene
ssth
roug
hac
cess
tocr
oss-
bor
der
know
led
ge
flow
san
dfo
reig
nkn
owle
dg
ere
sour
ces
Jour
nalo
fthe
Aca
dem
yof
Mar
ketin
gS
cien
ce
Laci
tyan
dW
illco
cks
(201
3)To
stud
yle
gal
pro
cess
outs
ourc
ing
LPO
fram
ewor
kTw
enty
-sev
enLP
pro
vid
ers
dra
wn
from
Orb
ys,
ale
adin
gso
urci
ngan
dtr
ansf
orm
atio
nad
viso
ryfir
mb
ased
inE
urop
e
The
LPO
pro
vid
ers
inth
esa
mp
lep
rovi
de
ava
riety
ofse
rvic
es,
incl
udin
glit
igat
ion,
inte
llect
ualp
rop
erty
,co
rpor
ate,
com
plia
nce,
pro
cure
men
t,em
plo
ymen
t,p
rop
erty
and
cons
ultin
gse
rvic
es.
LPO
pro
vid
ers
allo
cate
dm
ost
ofth
eir
hum
anre
sour
ces
tolit
igat
ion
(26
per
cent
),in
telle
ctua
lpro
per
ty(1
4p
erce
nt)
and
corp
orat
e/co
mp
lianc
e(1
2p
erce
nt)
serv
ices
.LP
Op
rovi
der
sb
alan
cete
amco
mp
ositi
on–t
hep
erce
ntag
eof
onsh
ore
reso
urce
slo
cate
dcl
ose
toth
ecl
ient
vers
usof
fsho
rere
sour
ces
inlo
w-c
ost
loca
tions
–to
red
uce
clie
ntco
sts
whi
lest
illd
eliv
erin
gq
ualit
yse
rvic
es.
The
aver
age
team
com
pos
ition
was
22p
erce
ntof
reso
urce
son
shor
ean
d78
per
cent
ofre
sour
ces
offs
hore
,m
ostly
inIn
dia
.Th
eau
thor
sal
soan
alys
edLP
Op
rices
by
skill
leve
land
loca
tion.
For
exam
ple
,th
eav
erag
ed
aily
rate
for
afu
llyq
ualifi
edla
wye
rb
ased
inIn
dia
was
$248
.LP
Op
rovi
der
turn
over
rate
sra
nged
from
3p
erce
ntto
34p
erce
nt,
with
anav
erag
etu
rnov
erof
15p
erce
nt
Str
ateg
icO
utso
urci
ng:
An
Inte
rnat
iona
lJo
urna
l
VOL. 18 NO. 4 2014 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 801
Dow
nloa
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yers
on U
nive
rsity
At 1
1:53
02
Dec
embe
r 20
14 (
PT)
Tab
leII
Art
icle
son
outs
ourc
ing
and
colla
bora
tive
agre
emen
tsbe
twee
nkn
owle
dge-
base
dfir
ms
Aut
hor(
s)(y
ear)
Res
earc
hai
ms/
obje
ctiv
esTh
eore
tical
per
spec
tive/
fram
ewor
kM
etho
d(e
mp
irica
l/the
oret
ical
)M
ain
find
ing
sJo
urna
l
Car
son
etal
.(20
03)
Tost
udy
info
rmat
ion
pro
cess
ing
mod
erat
ors
ofth
eef
fect
iven
ess
oftr
ust-
bas
edg
over
nanc
ein
inte
r-fir
mR
&D
colla
bor
atio
n
Theo
ryon
trus
t-b
ased
gov
erna
nce
and
info
rmat
ion
pro
cess
ing
Asu
rvey
amon
g20
412
9in
form
ants
onR
&D
outs
ourc
ing
inth
eU
S(3
2p
erce
ntre
spon
sera
te)
The
resu
ltsre
veal
that
trus
t-b
ased
gov
erna
nce
has
ala
rger
pos
itive
imp
act
onta
skp
erfo
rman
cew
hen
the
clie
ntis
mor
esk
illed
atun
der
stan
din
gth
eou
tsou
rced
task
sat
hand
.Th
eta
skits
elf
req
uire
ssk
ills
that
are
rela
tivel
ym
ore
read
ilyta
ught
(less
taci
t),
whe
nth
eta
skis
org
anis
edin
par
alle
lwith
wor
kb
eing
don
eat
the
cont
ract
or’s
pla
ntas
wel
las
the
clie
nt’s
.Th
ere
sults
also
ind
icat
eth
atfir
ms
adop
ttr
ust-
bas
edg
over
nanc
eto
ag
reat
erex
tent
asth
ese
info
rmat
ion-
pro
cess
ing
abili
ties
incr
ease
,as
wel
las
with
the
co-lo
catio
nof
the
cont
ract
oran
dcl
ient
Org
aniz
atio
nS
cien
ce
Tiw
ana
and
Kei
l(2
007)
Toem
piri
cally
test
whe
ther
per
iphe
ral
know
led
ge
com
ple
men
tsco
ntro
lin
tech
nolo
gy
outs
ourc
ing
allia
nces
Lite
ratu
reon
cont
roli
nin
ter-
firm
allia
nces
Dat
afr
om59
US
softw
are
serv
ices
outs
ourc
ing
allia
nces
Per
iphe
ralk
now
led
ge
com
ple
men
tsfo
rmal
cont
rolb
ased
onsp
ecify
ing
outc
omes
,b
utno
tth
eot
her
form
bas
edon
pre
scrib
ing
wor
kp
roce
sses
toth
eou
tsou
rcee
Str
ateg
icM
anag
emen
tJou
rnal
Tiw
ana
(200
8)To
exp
lore
the
per
spec
tive
that
incr
easi
ngin
ter-
firm
mod
ular
itylo
wer
sth
ene
edfo
rin
ter-
firm
know
led
ge
shar
ing
Lite
ratu
reon
softw
are
outs
ourc
ing
allia
nce
(US
)Fi
eld
stud
yof
209
ind
epen
den
tal
lianc
es,
mat
ched
-pai
rd
ata,
incl
udin
gfir
ms
inR
ussi
a,Ir
elan
dan
dIn
dia
Dat
aan
alys
isin
dic
ates
that
inte
r-fir
mm
odul
arity
and
outs
ourc
eig
nora
nce
are
com
ple
men
tsS
trat
egic
Man
agem
entJ
ourn
al
Che
net
al.(
2010
)To
exp
lore
the
imp
act
ofna
tiona
lcul
ture
onth
est
ruct
ured
know
led
ge
tran
sfer
from
aU
S-b
ased
(ons
hore
)te
chni
cals
upp
ort
cent
reto
anof
fsho
resu
pp
ort
cent
rein
Chi
na
Lite
ratu
rere
latin
gto
know
led
ge
tran
sfer
Bas
edon
anin
terp
retiv
eca
sest
udy,
invo
lvin
gd
ocum
ent
revi
ew,
par
ticip
ant
obse
rvat
ion
and
sem
i-st
ruct
ured
inte
rvie
ws,
cond
ucte
din
anof
fsho
rete
chni
cals
upp
ort
cent
re(T
SC
)lo
cate
din
Dal
ian,
Chi
na
Usi
ngS
zula
nski
’s(1
996)
four
stag
esof
know
led
ge
tran
sfer
,th
efin
din
gs
ind
icat
est
rong
evid
ence
that
diff
eren
tIC
,P
Dan
dU
Acu
ltura
ldim
ensi
ons
have
asi
gni
fican
tim
pac
ton
know
led
ge
tran
sfer
incr
oss-
cultu
ralb
usin
ess
cont
exts
;as
criti
calb
arrie
rsto
know
led
ge
tran
sfer
and
know
led
ge
taci
tnes
sar
esu
gg
este
d,
asw
ella
skn
owle
dg
eg
aps,
cultu
rala
ndco
mm
unic
atio
nd
ifficu
lties
and
wea
kre
latio
nshi
ps
Jour
nalo
fKno
wle
dg
eM
anag
emen
t
Man
ning
etal
.(20
11)
Tob
ette
run
der
stan
dw
hat
driv
esth
ed
urab
ility
ofof
fsho
re–o
utso
urci
ngre
latio
nshi
ps
Lite
ratu
reth
athe
lps
exp
lain
why
clie
nt–v
end
orre
latio
nshi
ps
are
sust
aine
d
Dat
afr
omO
RN
serv
ice
pro
vid
ersu
rvey
(US
,W
este
rnan
dE
aste
rnE
urop
e,In
dia
,C
hina
,La
tinA
mer
ica
and
othe
rre
gio
ns)
The
find
ing
ssu
gg
est
that
pro
vid
ers
pro
mot
eco
ntra
ctre
new
alb
ym
akin
gcl
ient
-sp
ecifi
cin
vest
men
tsan
db
yin
volv
ing
clie
nts
inou
tsou
rcin
gop
erat
ions
Man
agem
ent
Inte
rnat
iona
lRev
iew
Par
ket
al.(
2011
)To
iden
tify
the
beh
avio
ural
pro
cess
ofkn
owle
dg
etr
ansf
erb
yex
amin
ing
the
effe
cts
ofIT
hum
anca
pab
ility
,hu
man
char
acte
r,tr
ust
and
coop
erat
ive
lear
ning
onth
isin
anIT
outs
ourc
ing
situ
atio
n
Res
ourc
e-b
ased
and
soci
alex
chan
ge
theo
ryM
atch
ed-p
air
surv
eys,
ITou
tsou
rcin
gp
roje
cts,
Sou
thK
orea
Clie
nt’s
IThu
man
cap
abili
tyd
irect
lyaf
fect
edco
oper
ativ
ele
arni
ngan
dkn
owle
dg
etr
ansf
erIn
form
atio
n&
Man
agem
ent
Ørb
erg
Jens
en(2
012)
Toin
vest
igat
eho
wd
eter
min
ants
ofth
eof
fsho
reou
tsou
rcin
gp
roce
ssco
ntrib
ute
toth
ere
sour
cest
ocks
ofcl
ient
firm
s
Act
ivity
-bas
edth
eory
,re
sour
ce-
bas
edth
eory
and
inte
rnat
iona
lb
usin
ess
netw
ork
theo
ry
Two
long
itud
inal
case
stud
ies
ofof
fsho
reou
tsou
rcin
gto
Ind
iaD
emon
stra
ted
that
the
inte
rcon
nect
edne
ssam
ong
onsh
ore
activ
ities
,of
fsho
reac
tiviti
esan
dth
eun
der
pin
ning
know
led
ge
reso
urce
sre
duc
esth
eris
kof
eros
ion
ofcl
ient
firm
reso
urce
s,al
thou
gh
this
rem
ains
alo
ng-t
erm
risk
Jour
nalo
fWor
ldB
usin
ess
Bha
llaan
dTe
rjese
n(2
013)
Toan
alys
eou
tsou
rcin
gb
ykn
owle
dg
e-in
tens
ive
new
firm
sin
sup
plie
rne
twor
ksTr
ansa
ctio
nco
stth
eory
and
the
reso
urce
-bas
edvi
ewC
ase
stud
yb
ased
ond
ata
from
ten
bio
tech
nolo
gy
star
t-up
san
d20
ofth
eir
sup
plie
rs
The
rese
arch
reve
als
that
new
firm
sou
tsou
rcin
gto
hig
hly
emb
edd
edsu
pp
liers
are
likel
yto
secu
reac
cess
toa
wid
ersu
pp
lier
netw
ork,
atta
inb
est-
in-c
lass
oper
atio
nal
know
led
ge
and
avoi
dsu
pp
lier
opp
ortu
nism
whi
lefa
cing
low
leve
lsof
rela
tions
hip
-sp
ecifi
cin
vest
men
ts.
New
firm
sou
tsou
rcin
gto
sup
plie
rsat
the
netw
ork
per
iphe
ryar
em
ore
likel
yto
real
ise
cost
effic
ienc
ies
and
exp
ose
them
selv
esto
opp
ortu
nism
,un
cert
aint
yan
dhi
ghe
rle
vels
ofre
latio
nshi
p-
spec
ific
inve
stm
ents
but
low
leve
lsof
oper
atio
nal
know
led
ge.
We
pro
pos
eth
atne
wfir
ms
bui
ldfiv
eou
tsou
rcin
gco
mp
eten
cies
tore
alis
eb
enefi
ts
Ind
ustr
ialM
arke
ting
Man
agem
ent
Mar
tinez
-Noy
aet
al.
(201
3)To
anal
yse
the
cont
ribut
ion
that
RS
Is(r
elat
ions
hip
-sp
ecifi
cin
vest
men
ts)
mad
efr
omth
eR
&D
sup
plie
rm
ake
toth
ep
erfo
rman
ceof
the
rela
tions
hip
from
the
clie
nt’s
per
spec
tive
Lite
ratu
reon
outs
ourc
ing
agre
emen
ts,
tran
sact
ion
cost
sth
eory
and
the
rela
tiona
lvie
wof
allia
nces
Mai
lsur
vey
dat
afr
omE
urop
ean
and
US
tech
nolo
gy-
inte
nsiv
efir
ms
Res
ults
show
that
inve
stm
ents
app
ear
tob
eve
ryef
fect
ive
for
the
clie
ntw
hen
the
sup
plie
ris
are
sear
chce
ntre
.In
cont
rast
,w
hen
outs
ourc
ing
tob
usin
ess
firm
s,th
ep
ositi
veef
fect
thes
ein
vest
men
tsha
veon
allia
nce
per
form
ance
dim
inis
hes
asth
eam
ount
ofp
rop
rieta
ryco
rekn
owle
dg
etr
ansf
erre
din
crea
ses
Jour
nalo
fM
anag
emen
tStu
die
s
PAGE 802 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 18 NO. 4 2014
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Dec
embe
r 20
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PT)
operational knowledge, and thus can reduce the danger of suppliers’ opportunism.Furthermore, Park et al. (2011) discover that the IT human capability of client firms affectedcooperative learning and knowledge transfer. Their study demonstrates the importance oftrustworthy and cooperative relationships between the parties involved, as they establishthe essential basis for increasing the success of knowledge transfer processes in IToutsourcing. This, in turn, indicates the relevance of recruiting and/or selecting the rightpersons (in terms of these persons’ human capabilities) for outsourcing. In their study,Chen et al. (2010) demonstrate the influence of the national culture on knowledge transferin cross-cultural business contexts. Given the situation that outsourcing activities ofteninvolve partners of different cultural backgrounds, more research activities are highlywelcome.
Factors affecting successful knowledge outsourcing
Information about factors that support the successful implementation of knowledgeoutsourcing is provided by the five papers presented in Table III. The findings suggest thatsupporting factors can be found in the areas of quality of relations between the partnersinvolved (i.e. existence of trust), outsourcing contract conditions, context and internalmeaning of outsourcing in firms (Lee et al., 2008; Grimshaw and Miozzo, 2009; Miozzo andGrimshaw, 2011).
On the other hand, Agndal and Nordin (2009) propose a research model that disposes offactors mediating the negative consequences of outsourcing. Thus they draw attention tothe non-financial negative consequences firms are likely to experience, for example, thatthe ability to perform the outsourced function is partly or fully lost and/or, as a consequenceof interdependencies between functions, the outsourcing can also negatively affect theperformance of other related business capacities. Their findings clarify that a firm has topass through a learning process before suitable procedures become available to handlenegative consequences related to outsourcing. Similarly, Lowman et al. (2012) highlight thenegative consequences of outsourcing. In the context of the pharmaceutical industry, theirstudy’s findings indicate the necessity of maintaining integrative mechanisms that ensureabsorptive capacity, knowledge diffusion and interactive learning.
KM and knowledge outsourcing
Three papers were found that studied knowledge outsourcing in the context of KM(Table IV). Lam and Chua (2009) highlight the application of knowledge outsourcing as apossible KM strategy for organisation. Therefore, the authors propose the study ofknowledge outsourcing as a promising field for KM. Blumenberg et al. (2009) are interestedin the implications of knowledge transfer processes on both outsourcing relationships andoutsourcing performance. In addition to KM, Bustinza et al. (2010) consider learning as auseful concept to better understand the process of outsourcing. Their findings signify thecontributions of KM and learning to both the generation of competitive advantage and thecapacity of managing outsourcing relationships.
Other outsourcing issues
Two papers were assigned to this topic (Table V). Huggins’ (2011) aim is to further enhancethe understanding of knowledge-intensive business services, whereas Ravishankar andPan (2008) focus on the concept of identification to find out whether it influences KMinitiatives in organisations. Their study emphasises the difficulties employees canexperience when participating in KM activities. These difficulties are owed to a strongeridentification with the client organisation than their own one.
Conclusions
In view of the increasing significance of outsourcing of knowledge processes, a betterunderstanding of this topic is essential and can contribute to a better management of the
VOL. 18 NO. 4 2014 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 803
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Tab
leIII
Art
icle
son
fact
ors
affe
ctin
gsu
cces
sful
know
ledg
eou
tsou
rcin
g
Aut
hor(
s)(y
ear)
Res
earc
hai
ms/
obje
ctiv
esTh
eore
tical
per
spec
tive/
fram
ewor
kM
etho
d(e
mp
irica
l/the
oret
ical
)M
ain
find
ing
sJo
urna
l
Lee
etal
.(20
08)
Tost
udy
the
role
oftr
ust
inIT
outs
ourc
ing
Theo
ries
oftr
ust
and
know
led
ge
shar
ing
Two
surv
eys
of16
3se
rvic
ere
ceiv
ers
inS
outh
Kor
ea,
and
45se
rvic
ep
rovi
der
s
The
resu
ltssh
owth
attr
ust
bet
wee
nse
rvic
ep
rovi
der
and
rece
iver
isve
ryim
por
tant
for
know
led
ge
shar
ing
and
outs
ourc
ing
succ
ess
Info
rmat
ion
Sys
tem
sFr
ontie
rs
Ag
ndal
and
Nor
din
(200
9)Th
ep
urp
ose
ofth
isp
aper
isto
dev
elop
am
odel
that
enab
les
the
stud
yof
non-
finan
cial
cons
eque
nces
ofou
tsou
rcin
g
Lite
ratu
reon
outs
ourc
ing
ofd
iffer
ent
com
pan
yfu
nctio
ns
Lite
ratu
rere
view
and
focu
sg
roup
invo
lvin
gex
per
ienc
edse
nior
pro
cure
men
tm
anag
ers
Out
sour
cing
can
have
neg
ativ
eno
n-fin
anci
alco
nseq
uenc
efo
rfir
ms
(loss
ofkn
owle
dg
ean
dsk
ills
etc.
).H
owev
er,
resp
ond
ents
clea
rlyp
rovi
ded
man
yex
amp
les
ofou
tsou
rcin
gd
eals
whe
reth
eyha
db
een
able
toov
erco
me
pot
entia
llyne
gat
ive
cons
eque
nces
thro
ugh
goo
db
usin
ess
pra
ctic
esor
whe
resu
chco
nseq
uenc
esw
ere
per
ceiv
edas
irrel
evan
td
ueto
the
outs
ourc
ing
cont
ext
Ben
chm
arki
ng:A
nIn
tern
atio
nal
Jour
nal
Grim
shaw
and
Mio
zzo
(200
9)To
inve
stig
ate
the
hum
anre
sour
cem
anag
emen
tp
ract
ices
that
und
erp
ina
spec
ific
mod
elof
org
anis
ing
know
led
ge-
inte
nsiv
eb
usin
ess
serv
ices
(KIB
S)
ITou
tsou
rcin
glit
erat
ure;
HR
Mth
eory
In-d
epth
,se
mi-s
truc
ture
din
terv
iew
sw
ithse
nior
exec
utiv
es,
HR
man
ager
san
dp
roje
ctm
anag
ers
from
ITfir
ms
(IB
M&
ED
S)
inG
erm
any,
UK
,A
rgen
tina
and
Bra
zil;
61in
tota
l
The
evid
ence
sup
por
tsan
alte
rnat
ive
fram
ewor
kfo
run
der
stan
din
gfo
urke
yin
fluen
ces
onH
RM
inla
rge
spec
ialis
tK
IBS
firm
s:i)
inte
r-or
gan
isat
iona
lrel
atio
ns(t
ight
inte
rlin
kag
esw
ithcl
ient
org
anis
atio
ns);
ii)co
ntra
ctp
erfo
rman
ceco
nditi
ons
(out
sour
cing
cont
ract
s);
iii)
know
led
ge
flow
s(in
ter-
org
anis
atio
nal
tran
sfer
sof
hig
hly
skill
edIT
wor
kers
);an
div
)th
eec
onom
ican
din
stitu
tiona
lcon
text
(ind
ustr
ialr
elat
ions
inst
itutio
ns)
Hum
anR
elat
ions
Mio
zzo
and
Grim
shaw
(201
1)To
exam
ine
how
new
kind
sof
larg
ese
rvic
esfir
ms
that
have
emer
ged
from
outs
ourc
ing
ofb
usin
ess
func
tions
dev
elop
thei
ror
gan
isat
iona
lcap
abili
ties
Key
conc
epts
from
the
evol
utio
nary
and
cap
abili
ties
theo
ries
ofth
efir
m
Cas
est
udie
sof
ED
San
dIB
MTh
ese
firm
sha
veex
pan
ded
thro
ugh
the
dev
elop
men
tof
uniq
ueor
gan
isat
iona
lcap
abili
ties
invo
lvin
gth
ree
feat
ures
:sk
illac
qui
sitio
nth
roug
hst
aff
tran
sfer
;th
ed
evel
opm
ent
ofco
mp
any-
wid
ep
roce
sses
and
met
hod
olog
ies
emb
edd
ing
org
anis
atio
nal
rout
ines
;an
da
pha
sed
lear
ning
pro
cess
Ind
ustr
iala
ndC
orp
orat
eC
hang
e
Low
man
etal
.(20
12)
Toex
amin
eth
eim
pac
tof
the
incr
ease
inou
tsou
rcin
gon
the
way
rese
arch
-and
tech
nolo
gy-
inte
nsiv
efir
ms
man
age
thei
rne
wp
rod
uct
dev
elop
men
tp
roce
ssan
dto
dis
cuss
the
pot
entia
lha
rmof
this
for
such
ind
ustr
ies
Lite
ratu
reon
inno
vatio
nou
tsou
rcin
gB
ased
onca
sest
udy
met
hod
olog
yru
nin
pha
rmac
eutic
alin
dus
try
invo
lvin
gex
per
tin
terv
iew
san
dsu
pp
lem
enta
ldat
a
Inth
eco
ntex
tof
new
bus
ines
sm
odel
s,th
est
udy
hig
hlig
hts
the
need
toup
hold
abso
rptiv
eca
pac
ity,
diff
use
know
led
ge,
sup
por
tin
tera
ctiv
ele
arni
ngto
avoi
dth
eris
kof
losi
ngco
ntro
land
mai
ntai
ncr
eativ
ityop
por
tuni
ties
for
new
pro
duc
ts
Tech
nova
tion
PAGE 804 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 18 NO. 4 2014
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Tab
leIV
Art
icle
son
know
ledg
em
anag
emen
tan
dkn
owle
dge
outs
ourc
ing
Aut
hor(
s)(y
ear)
Res
earc
hai
ms/
obje
ctiv
esTh
eore
tical
per
spec
tive/
fram
ewor
kM
etho
d(e
mp
irica
l/the
oret
ical
)M
ain
find
ing
sJo
urna
l
Blu
men
ber
get
al.
(200
9)To
stud
ykn
owle
dg
etr
ansf
erp
roce
sses
inIT
outs
ourc
ing
rela
tions
hip
san
dth
eir
imp
act
onsh
ared
know
led
ge
and
outs
ourc
ing
per
form
ance
Kno
wle
dg
e-b
ased
theo
ryof
the
firm
Aca
sest
udy
bas
edon
the
ITou
tsou
rcin
gre
latio
nshi
ps
of12
ban
ksan
dth
eir
ITp
rovi
der
sin
Ger
man
yan
dS
wis
s
The
resu
ltssh
owth
ed
iffer
entia
lim
pac
tof
vario
uskn
owle
dg
e-tr
ansf
erp
roce
sses
ded
icat
edto
the
tran
sfer
ofex
plic
itor
taci
tkn
owle
dg
e,re
spec
tivel
y,on
the
dev
elop
men
tof
shar
edkn
owle
dg
e.In
tere
stin
gly
,th
eco
mb
inat
ion
ofb
oth
know
led
ge-
tran
sfer
pro
cess
esd
edic
ated
toth
etr
ansf
erof
exp
licit
know
led
ge
and
thos
ed
edic
ated
toth
etr
ansf
erof
taci
tkn
owle
dg
ep
rove
sto
be
mos
tef
fect
ive.
Furt
herm
ore
the
resu
ltsin
dic
ate
that
hig
hle
vels
ofsh
ared
know
led
ge
pos
itive
lyin
fluen
ceou
tsou
rcin
gp
erfo
rman
ce.
Inad
diti
onto
pre
viou
slit
erat
ure,
tran
sfer
pro
cess
esfo
rex
plic
itkn
owle
dg
ein
anou
tsou
rcin
gco
ntex
tw
ere
foun
dto
cons
ist
oftw
od
imen
sion
s;th
eco
nten
td
imen
sion
,p
rimar
ilyfo
cuse
don
inlit
erat
ure,
and
the
send
er–r
ecei
ver
dim
ensi
onof
tran
sfer
pro
cess
esw
hich
are
rare
lyad
dre
ssed
inou
tsou
rcin
glit
erat
ure
Inte
rnat
iona
lJou
rnal
ofIn
form
atio
nM
anag
emen
t
Bus
tinza
etal
.(2
010)
Toan
alys
eou
tsou
rcin
gfr
omth
ep
oint
ofvi
ewof
know
led
ge
man
agem
ent,
and
lear
ning
Kno
wle
dg
e-b
ased
theo
ryof
the
firm
Asu
rvey
amon
g20
4S
pan
ish
serv
ice
firm
sw
ithm
ore
than
20em
plo
yees
;a
resp
onse
rate
of20
.4p
erce
nt
Find
ing
shi
ghl
ight
the
cont
ribut
ion
ofth
est
ock
ofkn
owle
dg
eas
are
sour
cean
dof
lear
ning
cap
acity
tob
oth
com
pet
itive
adva
ntag
ean
dth
eca
pac
ityto
man
age
outs
ourc
ing
colla
bor
atio
ns
Jour
nalo
fSup
ply
Cha
inM
anag
emen
t
Lam
and
Chu
a(2
009)
The
pur
pos
eof
the
pap
eris
top
rese
ntth
eno
tion
ofkn
owle
dg
eou
tsou
rcin
gas
anal
tern
ativ
est
rate
gy
ofkn
owle
dg
em
anag
emen
t
Lite
ratu
reon
KM
and
ITou
tsou
rcin
gA
case
stud
yb
ased
onFe
nton
Uni
vers
ity(h
ighe
red
ucat
ion
ente
rpris
eow
ned
by
aco
nsor
tium
ofin
tern
atio
nal,
rese
arch
-in
tens
ive
univ
ersi
ties)
Ag
ener
alp
roce
ssm
odel
ofkn
owle
dg
eou
tsou
rcin
gis
dev
elop
edfr
omth
eca
sed
ata.
The
pap
eral
sod
raw
sat
tent
ion
toth
ree
cond
ition
sun
der
whi
chkn
owle
dg
eou
tsou
rcin
gm
ayb
ea
suita
ble
stra
teg
yfo
rkn
owle
dg
em
anag
emen
t.A
dd
ition
ally
,tw
om
ain
area
sof
know
led
ge
outs
ourc
ing
risk
have
bee
nid
entifi
ed,
rela
ting
toth
eq
ualit
yof
know
led
ge
serv
ices
and
the
effo
rtre
qui
red
tom
anag
eth
eou
tsou
rcin
gre
latio
nshi
p
Jour
nalo
fK
now
led
ge
Man
agem
ent
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upsides and downsides regarding this specific type of outsourcing. Accordingly, thepurpose of this paper was to review research on KPO to establish the current body ofknowledge regarding this topic. To do so a systematic literature review was conducted toidentify suitable articles. The 24 papers, which formed the basis of the analysis, wereclassified into five themes: outsourcing of knowledge processes, outsourcing andcollaborative agreements between knowledge-based firms, factors affecting successfulknowledge outsourcing, KM and knowledge outsourcing and other outsourcing issues.
Based on the studies reviewed, it can argued that there is some initial body of knowledgeregarding outsourcing of knowledge processes such as financial services, IT outsourcingand offshoring, legal processes, accounting, advanced manufacturing and service tasks,HRM, pharmaceutical new product development and technical support. The body ofknowledge, however, with regard to other knowledge processes is weak.
As regards the motives for outsourcing knowledge processes it seems that they are mainlyof an intangible (non-financial) nature, e.g. gaining access to expert knowledge, which canlater result in financial benefits. Thus knowledge outsourcing seems to address the futureof a firm, i.e. maintaining the firm’s competitive standing.
The reviewed studies were conducted in most regions of the world. However, no significantempirical studies were found from Africa and Australia, and few from Asia. Given therelevance of outsourcing in general and the increase of outsourcing of knowledgeprocesses, it is argued that research would undoubtedly benefit from contributions fromthese parts of the world. The literature review showed that the majority of papers relied ona single region or a single country. Yet a number of more recent papers were based on across-country comparison (Tiwana, 2008; Grimshaw and Miozzo, 2009; Miozzo andGrimshaw, 2011; Huggins, 2011; Manning et al., 2011; Lacity and Willcocks, 2013; Bhallaand Terjesen, 2013; Martinez-Noya et al., 2013).
Table V Articles on other outsourcing issues
Author(s) (year) Research aims/objectivesTheoreticalperspective/framework Method (empirical/theoretical) Main findings Journal
Ravishankar and Pan(2008)
Looked at how members’identification with twoorganisations, their ownand their clientorganisation, influencestheir compliance with anorganisational KMinitiative
Definitional issues andconcepts underlyingidentity andidentification and theirrelevance with regardto organisation-wideKM activities
Interpretive case study methodconducted in a leading IndianIT outsourcing vendororganisation
Highlights the influence of dualorganisational identificationsand their management in thecontext of an organisationalKM initiative
Omega
Huggins (2011) To further understand theevolution and growth ofKIBS firms and thenature of their networksand markets
Theories on KIBS,outsourcing andglobalisation
Interview data from a sampleof KIBS firms in London andHelsinki; 30 interviews withmanagers of firms, fourinterviews with localpolicymakers
It is concluded that the growthof KIBS is stretching the limitsof globalisation through thecreation of new spaces ofknowledge flow. However,regions continue to be keyknowledge bases and remainthe primary spatial architectureunderlying the systems ofinnovation within which KIBSare positioned
European PlanningStudies
‘‘As regards the motives for outsourcing knowledge processesit seems that they are mainly of an intangible (non-financial)nature, e.g., gaining access to expert knowledge, which canlater result in financial benefits.’’
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The research identified poses some implications for researchers and practitioners. The firstimplication is related to the effect of KPO on core competences of organisations. It hasbeen shown that outsourcing can actually strengthen core competences by the means ofcooperative learning (Park et al., 2011), gaining best-in-class knowledge and reducingsuppliers’ opportunism by networking with high embedded suppliers (Bhalla and Terjesen,2013). Yet the studies have made clear that KPO also encompasses risks. There is a riskof losing skills and capacities needed to perform central knowledge processes (Agndaland Nordin (2009). Additionally, too strong an identification with a client organisation canhamper the success of outsourcing activities and undermine KM practices in theoriginating organisation (Ravishankar and Pan, 2008).
The second implication relates to factors contributing to the success of KPO. Thefindings of Lee et al. (2008) indicate, like in other examples of knowledge transfer, thesignificance of trust between the actors involved. The studies point out the relevance ofinter-organisational transfers of highly skilled staff to enhance knowledge flows. In turn,this also stimulates interactive learning (Grimshaw and Miozzo, 2009; Lowman et al.,2012). Additional success factors are tight inter-linkages with client organisations, thedepth and quality of outsourcing contracts and the development of company-wideprocesses and methodologies embedding organisational routines (Grimshaw andMiozzo, 2009). As outsourcing between countries is common, cultural differences needto be considered as well (Chen et al., 2010).
The research conducted on KPO is of high value for managers of organisations and otherpractitioners. In particular, the findings regarding the success factors of KPO as well as theenhancing potentials of such outsourcing could be of special interest. The former can helpin avoiding mistakes and the latter provide strong arguments for KPO.
The fact that only 24 papers were identified is already an indication that this field is in itsinfancy and more research is to be asked for.
It can be said that the studies presented in this paper have a great merit for the currentunderstanding of KPO and can be used as basis for future research. However, given theearly stage of development, there is a need to verify the findings of previous studies and tofill the gaps that have been identified.
So far, there is only a limited understanding as to how KPO affects KM processes. Inthat respect, the long tradition of KM research has much to contribute to furtherresearch, for example, in the areas of knowledge culture (Al-Alawi et al., 2007; Kayworthand Leidner, 2003), trust (Adler, 2001; Davenport and Prusak, 1998), an organisationsuch as Ba (Nonaka, 1991) and knowledge sharing (Christensen, 2007; Riege, 2005;Markus, 2001).
The understanding of KPO regarding business functions such as R&D in general, productdesign, engineering, animation or marketing is quite limited. Given the complexity of theseknowledge processes, future research may address them as well and study their feasibilityfor outsourcing.
Moreover, it can be asked whether KPO enhances innovation in organisations whenmore than one partner is involved in the identification of needs and major aspects ofnew products and services development. How well is the outsourced knowledgeimplemented (“not invented here” syndrome (Lichtenthaler et al., 2011)), both
‘‘The motives for outsourcing knowledge processes arebasically to gain access to expert knowledge and lowercost.’’
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regarding tacit and explicit knowledge, not to mention the utilisation of suchknowledge? Does KPO result in more patents, new products and processes comparedwith situations when it is not involved?
Future research could also look into tacit knowledge related to competitive advantages offirms and its role in KPO (Currie et al., 2008). What happens in the organisation when tacitknowledge is transformed into explicit knowledge and then outsourced? An understandingof the motives behind KPO would be useful as well.
Research has demonstrated the contribution of KPO to organisational learning. Moresystematic studies are welcome, as this would provide a means to improve the competitivestanding of firms.
In addition, further development of the topic of KPO would benefit from morecomparative studies. This would enable researchers to discuss and understand hownational and corporate cultures, as well as other contextual issues, influence KPO inmore depth.
Finally, KPO calls for a new focus of KM where the attention shifts from a singleorganisational analysis and management of knowledge to multi-organisationalcollaboration and management of knowledge, knowledge processes and intangibles.
The authors are aware that the present study is not without limitations. Because of thechosen research procedures, this study may not have enabled complete coverage of allempirical articles in the field of KPO. Yet, it seems reasonable to assume that the reviewprocess covered a large share of studies available. Finally, this paper proposes someresearch directions, which are not exhaustive but represent initial stages.
References
Adler, P.A. (2001), “Market, hierarchy, and trust: the knowledge economy and the future of capitalism”,Organization Science, Vol. 12 No. 2, pp. 215-234.
Agndal, H. and Nordin, F. (2009), “Consequences of outsourcing for organizational capabilities:some experiences from best practice”, Benchmarking: An International Journal, Vol. 16 No. 3,pp. 316-334.
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Further reading
Egbu, C.O., Hari, S. and Renukappa, S.H. (2005), “Knowledge management for sustainablecompetitiveness in small and medium surveying practices”, Structural Survey, Vol. 23, No. 1, pp. 7-21.
Jagersma, P.K. and van Gorp, D.M. (2007), “Redefining the paradigm of global competition:Offshoring off shoring of service firms”, Business Strategies Series, Vol. 8, No. 1, pp. 35-42.
Miles, I. (2005), “Knowledge intensive business services: prospects and policies”, Foresight – TheJournal of Future Studies, Strategic Thinking and Policy, Vol. 7 No. 6, pp. 39-63.
About the authors
Ingi Runar Edvardsson is a Professor of management at the University of Iceland. Hisresearch interests focus on the interplay between knowledge management and humanresource management, outsourcing and on regional innovation and learning strategies.Ingi Runar Edvardsson is the corresponding author and can be contacted at: [email protected]
Susanne Durst is Assistant Professor at the Chair in International Management, Institute forEntrepreneurship, at the University of Liechtenstein. Her research interests includeknowledge management, entrepreneurship and corporate governance.
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