Transforming capabilities in offshoring processes – Longitudinal development of organisational resources and routines in four Danish offshoring enterprises

Purpose This paper’s focus is on how organisational capabilities, enhancing the dynamic capability perspective, evolve during a more than five-year offshoring process in four Danish SMEs. The strategic decision to offshore some manufacturing activities meant that capabilities were ruptured and had to be rebuilt. Design/methodology/approach The empirical investigation took the form of qualitative case studies with a longitudinal orientation focusing in on a few events in the four cases (strategic change in the sourcing configuration) as a process research design (Pettigrew, 1990; Van de Ven, 2007). Interviews were transcribed and coded in NVivo. Findings The four cases followed distinct trajectories, but they all changed their routines regarding how to handle knowledge, including both technology and human resources. A need for specific human resources acting as boundary spanners arose, transforming both intraand inter-organisational practices in all four cases. More complex activities were moved offshore to enhance the dynamic capabilities of the companies regarding both product development as well as specific processes, thereby transforming/reconfiguring the organisational capabilities of the companies. However, in the two small-sized cases, more complex/less routinised activities were backsourced, demonstrating a significant problem over time with the development of sufficient organisational resources to maintain seizing and sensing capabilities within these companies in comparison with the two other medium-sized cases.