Abstract:

Due to advances in information and communication technologies (ICTs), the cost of communicating declined and organizing from distant places was possible. As competitive pressure in the market increased, decentralized decision-making became norm in the organizations in developed countries. Whereas service firms employed contract freelancers, manufacturing organizations outsourced work to other firms to cut costs. More recently, due to rise of knowledge workers, foreign firms (U.S. and U.K.) outsource software production to India. Upon forming alliances with Indian firms, work processes and standardization schemes are transferred to increase productivity and output quality. Although outsourcing of software promises efficiency gains and cost savings, American and British firms face numerous socio-cultural challenges while managing global software alliances in India.