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Keywords:

  • procurement/purchasing processes;
  • outsourcing (make or buy);
  • international/global purchasing;
  • service supply management

This research examines the relationship between strategy and structure in the highly complex services offshore outsourcing environment. The analysis uses data from the in-depth case studies of six organizations that purchase services (primarily call center services) to assess how the strategy of offshore outsourcing of services affects organizational structure and to develop a better understanding of the offshore outsourcing of services phenomenon. While organizations often have local buying offices and very formal structures for buying materials globally, the same is not true for purchased services. The issue of proper organizational structure for effectively managing offshore outsourced services has not been assessed. This research also aims to add to the growing body of literature related to Service-Dominant Logic, which recognizes that services cannot be effectively studied through the lens of manufacturing. This research applies case study findings to assess how the elements of structure, namely centralization, formalization and complexity, are affected by offshore outsourcing of services. All of the organizations studied here indicate that their processes evolved and that pursuing an offshore services purchasing strategy lead to structural adaptations in terms of more centralized, team-based structures, more formalized processes and more complex structures. However, most of the cases tried to retain some level of flexibility to allow for continued adaptation and improvement.