Role of quality management capabilities in developing market-based organisational learning capabilities: Case study evidence from four Indian business process outsourcing firms

a r t i c l e i n f o Keywords: Quality management capabilities Market orientation India Market-based organizational learning capabilities Business-to-business marketing Business-to-business marketing literature acknowledges the value firms, including business process outsourcing firms, realise through their supplier networks. Such value realisation is often possible through a dynamic exchange of complementary organisational capabilities between a firm and its network partners. However, little is known about how outsourcing firms develop these capabilities and thus realise value. This paper addresses an unexplored theoretical gap of developing market-based organisational learning capabilities in business process outsourcing firms. Using a capabilities lens, this study assesses the impact of quality management capabilities in developing market-based organisational learning capability. Findings from a case study of four business process outsourcing firms in India suggest that effective knowledge transfer, diffusion and the development of market-based organisational learning capabilities are contingent upon the strength of a firm's quality management capabilities. Implications for theory and practice are discussed. Of an estimated global expenditure of US$ 1.5 trillion on technology and related services, software, information technology and business process outsourcing services account for US$ 1.0 trillion (NASSCOM, 2010). Although there was a 3% decline in the total expenditure following the global financial crisis in 2008, industry estimates suggest a positive growth of between 3–4% in the 2010 to 2012 period (NASSCOM, 2010), a significant percentage of which is likely to come from developed countries. Although the USA and Western Europe account for nearly 80% of all IT spend, a significant proportion of IT and BPO services is being outsourced to offshore locations in developing Asian countries. India currently accounts for 51% of the global offshore market share, thought to be worth of about US$94 billion (NASSCOM, 2010), which is expected to grow at a rate of 7–9% in the 2010–12 period. Given the increasing incidence of outsourcing and the need to understand its nature and extent, management and business-to-business marketing journals have suggested frameworks and reported empirical studies on outsourcing (see for example Special Issues on outsourcing in the Journal of Management Studies, 2010 and Industrial Marketing Management, 2009). Recent literature on business-to-business marketing acknowledges the value firms realise through their network of suppliers in an outsourcing relationship (Ahearne & Kothandaraman, 2009). Such value realisation is made possible through a dynamic exchange of complementary organisational capabilities between a firm and its network partners (Banerjee, 2004). However, little research has been …