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In the current competitive environment, the question is no longer whether or not to go offshore, but in determining what should be offshored and how it should be offshored, while keeping the value proposition for the organization as a whole coherent. The decision to offshore work to locations such as India and China may often be initially driven by the need to leverage the cost differentials when compared to western sites, but evolve to focus on other key value levers such as access to talent and time to market. Given that globalization of product development projects is an organizational reality today, in order to remain competitive, organizations have to develop capabilities to successfully transition to this new way of working. Despite the prevalence of offshoring in large multi-nationals, there is limited understanding of the dynamics of standing up new sites. In this paper, we focus on identifying some of the key capabilities that organizations need to effectively offshore work, through a case study of the transfer of a product from the European site of large-multinational called Eurosoft to one of their Chinese sites. Starting with their strategic decision to offshore the development of the product, we study the critical actions undertaken as part of the transfer process and illustrate four types of organizational capabilities- technology (ability to understand and execute the project); process & tools (ways of working both within the organization and with clients); relationship management (ability to govern at both the project-level and at the relationship level); and knowledge management (ability to grow human capital, institutionalize best practices, and codify learning).

Offshoring of knowledge-intensive work is a relatively new phenomenon wherein organizations choose to distribute segments of their value chain ranging from testing, to product development and innovation across geographical and organizational boundaries. Moving work from one location to another creates new challenges for the organization as the complexity of the processes and number of organizational interfaces increases. This paper uses three case studies to explore the paradoxes and underlying tensions found in the practice of globally distributed development. The study demonstrates how multiple levels of analysis can be applied to resolve the tensions and trade-offs in globally distributed work.

A majority of the research on offshoring is positioned on a macro level, explaining firm level strategies for offshoring and the antecedents of offshoring decisions, but research on implementation of offshoring strategies is rare. The author suggest that the actual development and implementation of offshoring can be better understood by applying a meso level approach; the middle management in the organization and its relation to top management directives, when implementing an offshoring strategy. A multiple case study of two multinational company’s offshoring product development to captive centers in India and China show how middle management facilitates the transfer process. By placing the study at a meso level and taking a strategy-as-practice perspective, the findings included: a) the iterative nature of the offshoring process, b) the lack of (communicated) strategies for offshoring and its consequences, and c) a set of routines connected to offshoring emerging at different levels in the company.