The role of hybrid captive offshoring in ICT sector

Focal firm's information and communications technology (ICT) offshoring performance may depend on ICT captive centres' capabilities to develop locational advantages. Captive centres' interactions with local network actors constitute external sources of focal firms' competitive advantage. However, little is known about how ICT captive centres overcome the complexity embedded in the offshore business environment to develop location-specific competitive advantages. Drawing on a retroductive perspective, this study employs a qualitative study to explore the mechanisms that enable ICT captive centres to develop offshore competitive advantages. In particular, it 1) identifies a hybrid captive offshoring model which illustrates ICT captive centres' interactions with offshore network actors; 2) investigates three mechanisms (reciprocity, incentive alignment, and organisational alignment) that enable captive centres to address the three dimensions of complexity (environmental dynamism, task complexity, and integration complexity) in offshore operations for competitive advantage. This study provides a deep managerial understanding of ICT service provisions in offshore markets.