Abstract

In IT outsourcing alliances, the service suppliers acquire significant capabilities through repeated interaction with a variety and multitude of clients. This learning process is especially critical for the survival and growth of suppliers that are in the early or expansionary stages of their lifecycle. This research focuses on the dynamic strategy process by which suppliers acquire capabilities in outsourcing alliances. Specifically, we conducted an interview-based qualitative case study of one of the largest Chinese IT service suppliers that had a diverse client portfolio including Japanese, Western, as well as domestic firms, and was actively expanding its business in the Western market. Drawing on the perspective of evolutionary economics, this research develops a theoretical model that conceptualizes the emergence and evolution of routines and capabilities within the suppliers.

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