Business Outsourcing Case Study

Common type of business process outsourcing and information technology outsourcing have become more popular in the early1980s and during the same time information and computer systems became more complex throwing up new possibilities for companies to seek competitive advantage. (Mierau 2007)

Interest in outsourcing once again got renewed in 1990s and the various concepts and models of outsourcing evolved quietly. For instance in the first half of the 1990s the size of the information services outsourcing industry grew tenfold (Behara et al 1995). The basic compelling reason for any outsourcing activity is to focus more on core activities of any company. Core competence or core activities of the company are the basis of its competitive advantage in the marketplace (Prahalad and Hamel 1990).

India has a vibrant national innovation system in place supported by a fairly liberal trade and investment policy regime and needless to observe that India’s outsourcing industry has shifted in revenue composition to a more sophisticated and higher end value based service offerings like market and business risk analysis, business research and

(2005) puts up that a firm will necessarily compelled to outsource its business processes when transaction dimensions are cheaper. Unobtrusively there is also some evidence to suggest that findings from transaction cost theory in BPO are realtively less conclusive (Harrigan, 1986; Walker and Weber, 1987; Rindfleisch and Heide, 1997). Sumantra Ghoshal and Moran (1996) argues that the formal and detailed contract advocated by transaction cost theory may more likely to result in opportunism and distrust. Thus, there may not be an sincere effort in maintaining a fairness reputation due to the presence of a contract (Baker et al., 2002). Mehta et al. (2006:327) had also criticized transaction cost theory for being unduly over specific in fostering increased distrust and rigidity prevailing among