Knowledge connectivity in an adverse context - Global value chains and Pakistani offshore service providers
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Companies from countries which suffer from terrorism and an adverse institutional country bias, connecting with international buyers and participating in global value chains is difficult. In this paper we look at the Pakistani IT industry to see what can be done to overcome country and institutional problems. What makes some of these companies perform well, against all odds?
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Knowledge connectivity in an adverse context - Global value chains and Pakistani offshore service providers
- 1. Knowledge Connectivity in an Adverse Context: Global Value Chains and Pakistani Offshore Service Providers Sinkovics, Noemi, Umair Shafi Choksy, Rudolf R. Sinkovics, and Ram Mudambi (2019), "Knowledge connectivity in an adverse context – global value chains and Pakistani offshore service providers," Management International Review, 59 (1), 131-170. https://doi.org/10.1007/s11575-018-0372-0 Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 1
- 2. Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 2
- 3. Authors Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 3
- 4. Authors • Dr Noemi Sinkovics » Lecturer in International Business and Management The University of Manchester, Alliance Manchester Business School Noemi.Sinkovics@manchester.ac.uk www.manchester.ac.uk/research/noemi.sinkovics http://orcid.org/0000-0002-5143-6870 • Dr Umair Shafi Choksy » Lecturer in Strategy and International Business University of Kent, Kent Business School u.s.choksy@kent.ac.uk https://www.kent.ac.uk/kbs/our-staff/profiles/choksy-umair.html http://orcid.org/0000-0001-9862-533X • Prof Rudolf R. Sinkovics » Professor of International Business The University of Manchester, Alliance Manchester Business School Rudolf.Sinkovics@manchester.ac.uk www.manchester.ac.uk/research/rudolf.sinkovics http://orcid.org/0000-0002-4471-5054 • Prof Ram Mudambi » Professor Strategic Management & Perelman Senior Research Fellow Temple University, Fox School of Business ram.mudambi@temple.edu http://orcid.org/0000-0002-5396-5602Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 4
- 5. Context and motivation Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 5
- 6. Research context and research question • Phenomenon driven research » Adverse political context in Pakistan » Withdrawal of Western firms from PK, difficulty to travel in and out » Reluctance of Western firms to even listen to pitches (2007) » Nevertheless, industry bounced back from 2010 onwards • How did PK Offshore Service Providers gain access to the Global OSP Value Chain despite these barriers? • We are using an integrative framework to explore this question » Knowledge connectivity (Cano-Kollmann et al. 2016) » GVC analysis framework (Gereffi and Fernandez-Stark 2016) » Practice framework (Jones and Murphy 2011) Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 6
- 7. Research design, method and sample Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 7
- 8. Methodology & research design • Flexible pattern matching (Sinkovics, 2018) • Definition of preliminary, tentative theoretical patterns (propositions) to be matched to observed patterns in the data Data analysis Selection criteria • Multiple case studies • 12 OSPs linking into two value chain configurations • Theoretical sampling Design • OSP set up in 2007 or after (to capture the effects of the 2007 political crisis) • Good financial health at the time of selection • Certain level of innovativeness (recognized by newspapers, industry platforms, awards, service portfolio on firm’s website, etc.) at time of selection • Small and medium-sized firm with employee numbers in the range of 20 to 300 Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 8
- 9. Two distinct value chains Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 9
- 10. App idea or need Marketing/ Publishing on apps store Requirement analysis High-level design Low-level design Coding, test, and support Smartphone app user Architecture phase Implementation phase B2C mobile apps value chain Problem framing capabilities Problem solving capabilities Routine capabilities Supplier capability requirements • Domain knowledge • Industry knowledge • Final user needs and experiences Supplier (application development and design Client (branding and marketing - ideas, R&D, and design are contingent) App store Knowledge transfer requirements Value chain participants Final user Developer standards, publishing rates, 30% margin Project duration: 2 months – 1 year
- 11. App idea or need Requirement analysis High-level design Low-level design Coding, test, and support • Domain knowledge • Industry knowledge • Client company information • Final user needs and experiences Final user Architecture phase Implementation phase Problem framing capabilities Problem solving capabilities Routine capabilities Supplier capability requirements Software demos Supplier (application development and design Client (ideas, R&D, and design are contingent) Employees, customers/ clients Knowledge transfer requirements Value chain participants Project duration: 2< years B2B software solutions value chain
- 12. Dynamic framework of the factors shaping the degree of connectivity and transformational global sourcing over time Sinkovics et al. MIR 2019 - https://doi.org/10.1007/s11575-018-0372-0 12
- 13. Patterns Social performance Perceptions Relational power Ease of coordination and control through ICT Assignment duration Structural power Patterns Social performance Perceptions Disconnection (break-out) Upgrading (step-up) Complexity of transaction Supplier capability Supplier’s strategic intent Effort to increase lead firm decision maker’s comfort zone Codifiability of knowledge Investment in building connectivity Leadfirmside Supplierfirmside Decision maker’s comfort zone Institutional environment in host country (labour cost, infrastructure, education and training facilities, political stability, laws and regulations, etc.) t0 t0+ nx t0+ ny Degree of connectivity Degree of transformational sourcing G1 G2 G3 P1 P2 P3 P4 P1 P2 P3 P4 BCM JP1 JP2 CK1 CK2 G4 G5 G6
Notas del editor
- Sinkovics, Noemi, Umair Shafi Choksy, Rudolf R. Sinkovics, and Ram Mudambi (2019), "Knowledge Connectivity in an Adverse Context – Global Value Chains and Pakistani Offshore Service Providers," Management International Review, 59 (1), 131-170, doi:10.1007/s11575-018-0372-0 This paper contributes to theory building efforts around the concept of knowledge connectivity and its relevance in buyer-supplier relationships in global value chains. We use the Pakistani IT industry as our study context. Pakistan suffered a significant adverse perception bias following terror attacks in 2008-09. We based our illustration on the experiences of 12 Pakistani offshore service providers (OSPs) who succeeded in offsetting the negative implications of the country’s adverse political environment. The case firms link into two distinct value chain configurations. In each configuration, we observe a distinct course of strategic action, which we term step-up and break-out, respectively. While these observations emerged from the Pakistani context, the implications of the resulting dynamic framework for theory and practice go beyond this particular adverse country setting. https://doi.org/10.1007/s11575-018-0372-0
- Sinkovics, Noemi, Umair Shafi Choksy, Rudolf R. Sinkovics, and Ram Mudambi (2019), "Knowledge Connectivity in an Adverse Context – Global Value Chains and Pakistani Offshore Service Providers," Management International Review, 59 (1), 131-170, doi:10.1007/s11575-018-0372-0 This paper contributes to theory building efforts around the concept of knowledge connectivity and its relevance in buyer-supplier relationships in global value chains. We use the Pakistani IT industry as our study context. Pakistan suffered a significant adverse perception bias following terror attacks in 2008-09. We based our illustration on the experiences of 12 Pakistani offshore service providers (OSPs) who succeeded in offsetting the negative implications of the country’s adverse political environment. The case firms link into two distinct value chain configurations. In each configuration, we observe a distinct course of strategic action, which we term step-up and break-out, respectively. While these observations emerged from the Pakistani context, the implications of the resulting dynamic framework for theory and practice go beyond this particular adverse country setting. https://doi.org/10.1007/s11575-018-0372-0
- L:\Documents\Research-papers-published\2019-MIRV-Connectivity\2017-EIBA2017-connectivity\20171212-Eiba2017-Connectivity.pptx L:\Documents\Research-papers-published\2019-MIRV-Connectivity\2018-MIRV-R3-Connectivity\20181125-Figures-MIRV-Connectivity.PPTX
- NVivo eSeminar
- Connectivity can be defined as the communication and interaction mechanisms and relational structures that support the back-and-forth flow of knowledge and ideas between two or more organisations Cano-Kollmann et al. (2016) call for the exploration of the entire process of knowledge connectivity, including the degree of GVC participants’ geographical mobility, co-location, and the nature and evolution of the interactions among actors (Cano-Kollmann et al. 2016). Adverse economies are characterised by frequent violent episodes, terrorism and other forms of conflict threatening individuals’ physical security (Brück, Naudé and Verwimp 2011; Dai, Eden and Beamish 2013; Hiatt and Sine 2014; Wu and Chen 2014). The uncertainty in an adverse environment creates fear and significantly affects the way individuals and organisations make economic decisions and how they interact. The concept of practice includes a wide range of actions from routinised to improvised or accidental (Jones and Murphy 2011). it takes into account the interconnections between place, space and organisation
- Rudolf Sinkovics - http://www.personal.mbs.ac.uk/rudolf-sinkovics/
- B2C mobile apps value chain
- B2B software solutions value chain