10.3 Theoretical synthesis | Global IT Outsourcing: Software Development across Borders

We have identified and developed six concepts (also referred to as ˜themes ) within the framework of the ˜model of and ˜model for metaphor to examine the empirical relation between the processes of GSA evolution and globalization:

Standardization
Identity
Space and place
Complexity of knowledge transfer
Power and control
Communication.

We discuss each of these themes in the framework of the three aspects of the synthesis outlined above.

Standardization

Key features

We first summarize in box 10.1 the key features of standardization.

Box 10.1 Key features of standardization

Takes place within and across the GSA at multiple levels of the organization, groups and individuals
Wide scope across physical, technical, managerial domains
Ongoing process of negotiation, resistance and redefinition surrounding the implementation of standards
Ongoing destabilization of standards by external events in the industry and global marketplace
Rising work levels require more sophisticated forms of standardization, and an associated hierarchy of standards
Systems of quantification play key role in the implementation of standards
Various explicit and implicit translation mechanisms used by managers to enable the implementation of standards

Standards are pervasive at multiple and inter-connected levels of the GSA relationship from inter-organization, organization, project, down to the individual. In the Sierra case, the management attempted to standardize at the inter-organization level, by creating a ˜little bit of Sierra in India that would identically mirror the UK operations at both the formal and informal level. The formal level included management practices such as using similar things as personnel appraisal forms in India and in the UK. At the informal level, attempts were made to construct in India a similar culture as in the UK: drinking and swearing were seen as active indicators of creativity, for example. The Gowing case (chapter 8) demonstrates how standardization can be played out at the organization level. Gowing UK consciously developed the ˜sociological experiment of bringing Indian programmers to the UK with the aim of introducing standardized methodologies for software development (and with it a discipline in their use) across the Gowing group of companies. Since many of the Gowing companies had been individually acquired , they reflected very different sub-cultures including styles for software development. A challenge for the Gowing management was to eliminate these differences and standardize the culture, in this case through the ˜rock of discipline that the Indian programmers provided. GlobTel s attempt to create the ˜Global manager (chapter 4) reflects a powerful attempt to standardize at the individual level by creating universal frameworks within which managerial action could be carried out and evaluated. Attempts to standardize accents of developers as described in the Sierra case reflect another complex individual-level attempt at standardization.

At these different inter-organization levels, the organization and the individual, the scope of standardization efforts is extremely wide and covers physical aspects, technical artefacts and managerial processes. Standards are never a given and an absolute, but are continuously negotiated, reinterpreted and redefined over time. These processes of implementation and negotiation can be seen as a series of translations, both explicitly and implicitly shaped by management action. Each translation involves the loss and gain of some part of the standard.

Inter-case and inter-theme comparisons

Standardization is related to a number of other themes, including knowledge transfer. During the early stages of the relationship it is product-related knowledge that needs to be primarily transferred. However, as work is upgraded, transfer of knowledge about processes and practices becomes increasingly important. Processes of globalization and GSW operate under implicit and explicit assumptions that knowledge can be seamlessly transferred across time, space and cultures. However as the cases in this book have emphasized , particularly the Sierra analysis, these processes of knowledge transfer are fraught with various complexities arising from the tacit nature of understanding, communication problems, varying competence levels and different socially constructed perspectives of knowledge.

Issues of standardization and knowledge transfer are also fundamentally linked to questions of identity . As work enters into more unstructured domains, largely dependent on the expertise and talent of key individuals, issues of identity become crucial. On the one hand, the evolution of work becomes dependent on whether these key individuals remain in the organization. On the other hand, as these individuals gain in expertise and knowledge, they become more attractive in the global marketplace. In trying to retain these individuals, companies such as GlobTel try to construct ˜Berlin Walls by inserting standard clauses into the contract to prevent movements of developers. The ways in which individuals respond to these restrictions are fundamentally linked to issues of identity and the issues that give them meaning and relevance “ issues that are inherently ˜non-standardizable . For example, it is extremely problematic to standardize accents by ˜ neutralizing them. Standardization is intimately connected to issues of power and control , as someone s standards are always being imposed over someone else s. This was highlighted in the GlobTel case where despite Witech s high-level standards of quality it was made to follow GlobTel s standards.

Contribution to social theory

Box 10.2 summarizes key inferences about the nature of the ˜model of and ˜model for relationship.

Box 10.2 ˜Model of and ˜model for relationship: standardization and globalization

Global separation drives the need for standards that create new conditions and perceptions of global separation
Global separation implies the need for structured and standardized work that over time with learning in a global environment enters into relatively unstructured domains; this creates new need for standards
Increasing diversity of global networks of GSAs by the entry of new countries and firms raises demands for new standards
The interesting question while operating in these global networks, is ˜What remains invariant in the process of translation?
We analyse this using the metaphor of ˜scaffolding

A key contribution arises from the analysis of the relation between work and standards reflected in the hierarchy of standards. During the initial stages of the relationship, when there is uncertainty about aspects of separation, the work externalized is often independent and relatively structured. To enable such work, standardization is focused primarily at the level of the physical and technical infrastructure such as buildings and the technical architecture. However, as work evolves and enters into more unstructured domains, processes become relatively interdependent. These processes increasingly involve issues of ownership and responsibility, both in letting go (by GlobTel, for example) and acceptance (by Witech, for example (chapter 4)). Under these circumstances, the standardization of management processes becomes crucial. Transfer of ownership raises the need for project management to be closely coordinated “ by standardizing the holding of weekly videoconference meetings to monitor progress, for example. These new forms of standards not only reflect the changing work processes, but also require actors to deal with separation differently. Analysis of the dynamics of work and standards relationship helps to develop insights into Giddens (1990) discussion on the role of disembedding mechanisms in globalization. While Giddens describes these mechanisms as being an important aspect of globalization, he does not elaborate on how these processes occur in situated practice. The micro-analysis of the structure of work and distance is an aid to understanding the role of standards in mediating this relationship over time.

Organizations, by virtue of the very global networks in which they are situated, reflect the informational capitalism that Castells (1996) describes as characterizing modern life. By virtue of these dynamic networks, GSA relationships are never stable: they require an ongoing process of revision and implementation of new standards. For example, as discussed earlier, Japanese managers did not appreciate the ISO 9000 type of methodologies used by the Indians. The global marketplace and the turbulent technological environment within which GSAs are situated make existing standards extremely vulnerable to destabilization and continuously raise the need for new standards. The proliferation of the Internet in the domain of software development for telecommunications, for example, brings with it the need for new tools and development methodologies situated within different frameworks of standards. Within these global networks, standards are continuously being changed or reinforced. The interesting question concerns ˜What remains invariant? The ˜scaffolding metaphor helps to examine this question and build insights into the nature of the evolution of the GSA process. The hierarchy of standards sensitizes us to the question of the risks that are associated with applying different standards. This aids our understanding of Beck s (1992) notion of ˜redistribution of risk , since application of standards can be seen as ˜risky business despite the intention to eliminate both risks and uncertainty.

Identity

Key features

We first summarize in box 10.3 some of the key features of identity.

Box 10.3 Key features of identity

Organizational culture, identity and image are inextricably intertwined and conceptualized through a structurational and self-referential process
Agency that shapes identity can be seen as constructed through situated practice and mediated by its linkage with organizational culture and image
Identity is shaped as a function of the membership actors have in multiple social systems, including Indian society, global high-tech business, the academic community and the firm
Transformations in identity take place in an extremely dynamic manner that is magnified in a global and turbulent marketplace and industry; identity is crucial in shaping different stages of the GSA process
Global networks in which GSAs are situated lead to a hybridization of identity

Features of identity concern the process of its construction, including the different sources of identification, and its role in shaping GSA relationships. Identity is constructed in structurational processes, shaped by the membership of managers in multiple social systems, including those related to society, high-tech business, the academic community and the firm itself. The structurational process contributes to developing agency that is directed both internally, helping to shape the biographies and careers of individuals , and externally, helping to define the firm s image . In the GlobTel case, Ghosh and Paul, despite having lived away from India for many years , still retained a strong sense of identification with Indian society. This identification became an important reason for the GlobTel programme being initiated in India in the first place. In the Sierra case, the country manager Mitra, despite having the same roots by birth as Ghosh and Paul, did not share a similar sense of identification and attachment to Indian society. There was thus a lower threshold level of tolerance and understanding in dealing with the complexities associated with working there. The nature of technology and associated work that finds its definition in the structure of the ˜global high-tech business provide another important source of identification. Developers, especially the younger ones, seek avenues where they can work with cutting- edge technologies and new products. Working with legacy-type technologies has negative implications for developers self-worth and their sense of relevance in the global marketplace.

Identity plays a key role in shaping various stages of the GSA process from the inception of relationship to its growth and its stabilization or breakdown. A key thrust of the Sierra management was to create an identity of its India office that would mirror the UK operations. When it became apparent that ˜sameness was not possible, the resulting disillusionment was instrumental in closing down the operations in less than three years. In Gowing, a key initial motivation of working with India was to create a coherent identity in the UK operations. The Gowing CEO believed that the Indian developers could provide the ˜rock of discipline and coherence in a previously fragmented identity made up of the diverse sub-cultures that came as a legacy of acquisition. However, while the Indians provided coherence in identification with the UK office, they themselves often experienced an alienation and ˜placelessness when residing in the UK owing to feelings of loneliness and uncertainty about where they belonged. Their loss or fragmentation of identity often contributed to their departure from the organization. This caused problems in project management, as there was no buffer available on-site to deal with the contingencies of the loss of key staff. In the MCI case (chapter 6), as the relationship stabilized and MCI was left primarily with the burden of legacy work, the management felt that it had compromised its ˜MCI identity in trying to come ˜too close to GlobTel. This realization of the need to reassert its ˜true identity would be key in defining how the relationship shapes up in the future.

Inter-case and inter-theme analysis

Issues of identity are linked to processes of standardization. To prevent attrition, management standardizes HR practices, such as specifying the minimum number of years a developer should work, thereby curtailing their sense of freedom. The issue of knowledge transfer is also intimately linked to issues of identity. As in the MCI case, the developers in GlobTel and MCI had very different frames of reference, of telecommunications and software, through which their identity was defined. Telecommunications knowledge is gained and stabilized after many years, in contrast to the overall software industry trends where the focus is on acquiring skills (for example, Java or C++) required for a fast-changing marketplace. These different temporal frames within the industry were important in shaping identity and had implications for building differing interpretations of attrition.

Issues of identity are also connected with questions of power and control, particularly over whose frame of reference will be used as a ˜template in defining identity. GlobTel s ˜global manager initiative emphasized the power they wielded over the Indian firms as it defined its identity. However, these attempts are never without resistance and negotiation. As the Sierra case emphasizes, the attempt to develop a ˜little bit of the UK in India was never realized, which led to a disappointing closure of the India operations. The identity of developers is fundamentally bound up in issues of ˜place , and ˜space-like issues have significant implications for identity. Over time, intimacy can be developed with different domains, such as the Indians feeling comfortable in Japan, and new and hybridized forms of identity can thereby be constructed.

Contributions to social theory

In box 10.4, we first outline some of the ˜model of and ˜model for features that help us to infer contributions to social theory.

Box 10.4 ˜Model of and ˜model for relationship: identity and globalization

Global imperatives of cost saving achieved through retention of bright developers, requiring individualized care; as a result, the constantly increasing costs of doing work are in conflict with cost saving imperatives through distance
Managing the ˜openness and ˜closedness of the organization operating in the global marketplace is shaped by, and also shapes, questions of identity
To prevent attrition in a global marketplace, management attempts to standardize HR practices, which in turn frustrates the worker and encourages movement
Creating ˜sameness in knowledge workers conflicts with their quest for individual creativity
Choices of workers are shaped within standardized ˜templates of reward and recognition defined within a capitalist framework of economic and political rules

For the proponents of the neo- liberal ideology that characterizes globalization, GSAs serve as a ˜model of this marketplace with developers and firms supposedly possessing ˜free choices on where and with whom they want to work. This global mobility of developers is in tension with the organizational need to retain the most talented programmers ( classified as ˜key resources ) by providing them with individual attention and care. This individualized attention adds to the salary bill, and steadily conflicts with the cost saving objectives of distance work. While management draws on the aspect of identity in an attempt to retain and motivate staff, individuals try to affirm their identity and seek new opportunities. As firms operate in new global networks, they are implicated in ongoing revisions of identity. The linkage between culture, image and identity helps us to understand complexities inherent in this process of revision. The ongoing transformations of identities that occur in GSAs supports Castells (2001) argument that social structures are not inevitable: they change depending on what social actors do in particular situations.

Analysis of the process of ongoing revisions of identity provides insights into the question of what Castells describes as ˜resistance identity and the conditions under which it becomes ˜project identity . ˜Resistance identity refers to the different pockets of resistance that arise in relation to globalization “ for example, the protest against the WTO meeting in Seattle in 1998. Such resistance can take the form of a ˜project identity if it coalesces with other organizations and their forms of protest to create institutional structures that reflect new forms of governance. This process of conversion, Castells argues, is extremely complex and poorly understood . While Castells argument is made primarily with relation to social movements, it has relevant implications for GSAs. For example, to deal with attrition (which can be seen as an expression of ˜resistance identity ), firms may set up new structures for compensation and reward/recognition. Institutionalization of these structures provides the firm with a different basis for governance, and a new form of ˜project identity . The conditions and form in which this conversion takes place is an empirical question for further IS research.

Creating ˜sameness in knowledge workers as a strategy of management to stem attrition conflicts with their quest for individual creativity. This conflict relates to Beck s (1992) discussion on the tension between individualization and standardization . While individuals have a range of individual choices on where to work, these choices are shaped within standardized ˜templates of reward and recognition of a capitalist-defined economic and political framework. Breakdowns in these frameworks were reflected in the US dotcom crisis and further magnified by the 11 September attacks, thereby making individuals and firms increasingly vulnerable. Attempts to reassert identities have come with Indian firms trying to enter different geographical regions (such as Scandinavia) and new technological domains (such as e-commerce). This switching of identities and image is difficult to accomplish in practice because of historical and geographical realities. When Indian firms try to assert their presence in Scandinavia, a geographical area largely unknown to them, for example, they draw upon an identity shaped largely through their earlier North American experience. The Scandinavian managers often feel uncomfortable dealing with this expression of a North American style; they show instead a preference for Russian outsourcing firms with a more compatible ˜European identity .

In the discussion on identity, we extend the work of Castells and Giddens by reinforcing their emphasis on identity, and broadening the discussion to the business organization, a level previously largely ignored. Castells (2001) argues that work itself may be declining as a source of identity, even though people work longer hours and more intensely than before. Castells argues that consumption is not the dominant source of identity, because meaning is not obtained from the act of consumption itself but from some external cultural codes that give consumption meaning (gay culture or body piercing, for example). In GSAs, the primary source of meaning can be seen to come not from the work itself but more through the cultural codes of the global and high-tech business in which GSAs are situated.

Space and place

Key features

We outline in box 10.5, the key features of space and place.

Box 10.5 Key features of space and place

Space and place serve as ˜root metaphors to analyse the relationship between social practices and the physical and electronic domains in which they occur
These metaphors need to be integrated with the material and geographical realities of GSAs
While space is an arena in which universalized activities occur, place is associated with particularity; space is associated with ˜becoming and growth, and place with ˜being and local experiences
The dialectical interplay between space and place helps to shape social interactions and the nature of work, and with it the process of growth of a GSA
Dialectics are not viewed as a deterministic logic but as an interpretive approach representing various arguments and concepts
Principles of totality, change and contradiction help to interrogate the dialectical processes.

Given the fundamental role that geography plays in GSAs, space and place can be seen as ˜root metaphors to understand the relation between the work processes of GSAs and the physical and electronic domains in which they occur. Place is associated with proximity, particularity and ˜being , but space represents distance, universality and ˜becoming . The metaphors of space and place, as Harvey (1996) argues, need to be integrated with the material and geographical realities of capital and distance. This integration is developed in the MCI case (chapter 6) through the analysis of the intricate and ongoing relationship between work, telecommunication infrastructure and space/place. While certain kinds of work can be done effectively in ˜spaces , with the passage of time, and as stability is attained at a certain level of work, expectations change on the kind of work to be done. The changes in expectations create varying needs for proximity and inclusion, which are always contested and negotiated . We have argued that such tensions can be conceptualized in a dialectical frame of reasoning, where dialectics are not viewed in terms of a deterministic logic but in an interpretive sense consisting of a process of argumentation and concepts.

Inter-case and inter-theme comparison

The metaphors of space and place help us to gain deeper insights into issues such as standardization. To deal with conditions of separation, organizations develop various forms of standards. Firms often standardize project management practices by scheduling weekly videoconferencing meetings, for instance, on Monday mornings, the agenda for which is exchanged in advance on the previous Friday afternoon. Such standardization in the use of time, space, technologies and procedures, although helping to deal with project management complexities arising through separation, also helps to create new meanings of ˜distance among the actors. Excessive use of videoconference meetings can make developers feel as if they are being ˜micro-managed by their GSA partners , for example. This leads to resistance, and proposals for alternative control structures. Some organizations attempt to deal with distance by outsourcing only mature and structured technologies, the idea being that well-specified problems can be worked on in ˜spaces enabled by the use of standard software development methodologies. New technologies, however, require more ˜place -like understanding. With time, learning occurs about how to deal more effectively with distance in GSW. This learning allows a confidence and trust to develop in entering into more unstructured domains such as new product design. Working in new unstructured domains raises the need for new types of standards, for example relating to communication processes (making accents ˜neutral , for example) to help avoid the problems of (mis)interpreting requirements, especially over the electronic media of phone and videoconference.

The assumption that place does not matter in GSAs breaks down with different kinds and levels of work and varying stages of the relationship. These breakdowns are manifested in problems relating to various themes such as knowledge transfer and identity. In the Sierra case, we discussed a number of communication issues relating to transferring knowledge such as different accents and difficulties in expressing concrete information about encultured and tacit knowledge. These issues are also illustrated in the Japanese case in chapter 9. Processes of knowledge transfer and communication are intimately linked to place-based and contextualized understandings that cannot be developed through the use of ICTs. These insights emphasize the need to distinguish carefully between knowledge that is space- or place-dependent, and to develop different strategies to deal with their transfer.

Contributions to social theory

We first outline in box 10.6 various features of the ˜model of and ˜model for relationship between space “place and globalization.

Box 10.6 ˜Model of and ˜model for relationship: space “place and globalization

Promised growth and cost saving through distance work is in conflict with the proximity needs of managers which come with such work; these processes are inherently contradictory and self-destructive
Working in space requires large-scale standardization but these standards cannot work without having a ˜place -like understanding; this interplay leads to redefinition of the standards in play
Telecommunication links help to create spaces for distance work; increasing bandwidth enables more interdependent work potentially to take place which, however, raises the need for a more ˜place kind of understanding

The ability to carry out distance work, universality and the associated economic growth are the underlying arguments for globalization, which GSAs serve as a ˜model of . Under such conditions, firms assume that they can have software developed in India or China or Russia using similar business strategies and large-scale standardization. For such standardization efforts to work in practice, however, a ˜place -like understanding is presupposed. Managers express varying reasons for proximity: gaining a comfort level or increased visibility, tighter control and the development of tacit understanding are all needs for proximity. The tensions that arise lead to changes in the nature of work outsourced, redefinitions in the meaning of autonomy and control and shifts in the patterns of communication. These micro-level dynamics in relation to space and place help to develop insights into macro-level social theory.

Castells (1996) emphasizes the importance of the ˜power of flows over the ˜flows of power in the network society. However, the ˜space and place metaphor, when integrated with the material and geographical realities, helps us further to understand how the relationship between power and flows rolls out in practice. Beck (2000) describes the ˜despatialization of the social as a key contour of the ˜brave new world of work . This is characterized by the increasing interdependence between nations, growing importance of transnational institutions and actors and the growth of multi-cultural identities. Beck argues that, as contrasted with the earlier ˜simple globalization , in current conditions of reflexive modernization relations are changing not only externally between transnational actors but also internally .What goes to make up the ˜organization or its culture or politics becomes inherently questionable because of the breakdown of the principle of territoriality that guided the past. The ˜space and place analytical focus helps to clarify some of these processes that enable the ˜deterritorialization of the social : understanding is aided by examining not only the simultaneous occurrence of events between organizations in different countries linked by a GSA, but also those in the same place. Not only are the remote and alien coming together in a GSA but also, as Appadurai (1996) notes, there is an increased cultural distance between fellow citizens and neighbours. In an Indian firm providing GSW services, there will be employees working with Japanese or North American clients; these clients have very different work patterns (time “space conditions), security conditions that restrict mutual interaction and a separate technological and market focus. These different groups to a large extent function like ˜islands , distant from each other, and in many cases find a greater sense of identification with their alliance partners in the foreign land than with their fellow employees located physically next door.

In outlining this new world of work, Beck argues that ˜capital is global, work is local (2000: 27) and economic processes lose their fixed spatial attachment, as was the case in the industrial society:

Geographical distance thus loses much of its significance as a ˜natural limit to competition between different production sites. In the ˜distanceless space of computer technology, every location in the world now potentially competes with all others for scarce capital investment and chief supplies of labour. (2000: 27)

A dialectical perspective of space “place makes us question such a generalization. Our case studies have emphasized that even in work situations such as GSW, the need for proximity and place cannot be eliminated and geographical distance reaches its ˜natural limits with certain kinds of work and stages of the relationship. The growth in the phenomenon of ˜nearsourcing discussed in chapter 1 also emphasizes the economic argument made by firms which proposes software development in conditions of ˜nearness rather than ˜remoteness . Firms in Mexico and the Caribbean are thus basing their management strategy on emphasizing their geographical ˜nearness to the USA. Firms in India, however, are stressing lower costs owing to distance. These differences demonstrate that economic arguments cannot be formulated based only on cost of production and labour but need to include a number of other issues such as management overheads for dealing with distance and the direct marketing and opportunity costs of operating remotely from potential end-users. The use of ˜space and place as metaphors to understand globalization is incomplete and needs to be integrated with the material realities of geography, history, politics and economics.

Complexity of knowledge transfer

Key features

In box 10.7 we first summarize the key features relating to knowledge transfer.

Box 10.7 Key features of knowledge transfer

GSW can be conceptualized as reflecting ˜knowledge work , including knowledge about products, processes and practices that is being articulated , transferred and interpreted by actors within a ˜community of practice
Knowledge issues shape the GSA process issues, including the onshore “offshore mix of developers
Reflexivity of knowledge and the processes of its intensification
Dependence of knowledge workers
Knowledge issues need to be analysed within a temporal dimension

Through the discussion of knowledge transfer in the Sierra case, and also from the other cases, we extend the critique of the view that knowledge can be treated as a ˜commodity that can be codified, formalized and seamlessly be transferred across time and space. The extension has come by way of discussing knowledge transfer issues in the context of GSW where additional dimensions of time, space and cultures need to be taken into account. These dimensions raise additional complexities owing to the tacit nature of certain forms of knowledge and its embeddedness in the practice of actors carrying out their everyday work. These complexities have been discussed at length in the Sierra case, and also emphasized in the Japanese case in chapter 9 with the discussion on ˜professional and ˜organizational knowledge and its implications for shaping communication practices. The temporal perspective emphasizes how varying needs for knowledge emerge at different stages of the project, and how different kinds of complexity arise as a result. We have argued that some of these complexities can be better understood through the ˜community of practice perspective that focuses on the everyday practice of software developers and the contextual influences which shape them. The ˜community of practice perspective needs to be integrated, for example, with the issues of power and control that shape the context within which these practices are structured.

One important aspect of dealing with complexity has been the quest of the firms involved to develop an appropriate mix between on-site and offshore work . While placing developers on-site adds to cost, it provides the potential to deal with some of the complexities of knowledge transfer. This mix varies with the temporal stage of the project, the kind of technology work that is being carried out and the professional/personal experiences of the people involved. These issues shape how much of a shared understanding exists between the two sides on what needs to be done and how, and the potential of ICTs to bridge the gaps in understanding. Balancing these two issues of cost and knowledge is a key challenge, especially in understanding how much work can be moved offshore and under what conditions. There are ongoing tensions and negotiations during this process of finding a balance, with significant implications for shaping the GSA process.

The conduct of knowledge work is fundamentally dependent on the capability and stability of knowledge workers. These issues have been raised in the cases such as GlobTel, who throughout the relationship were struggling with the issue of attrition. The Sierra case demonstrated the problems that a small firm has in attracting and retaining high- quality staff in the light of competition from the large and more glamorous MNCs. The case analyses also show not only the reflexivity of knowledge but also the intensified speed through which it occurs. This aspect is seen in Sierra s move to e-commerce or GlobTel s ˜right-angle turn , as well as ComSoft s move into the telecommunications domain as compared to their previous EDA focus. What is most interesting in all these cases is the speed and suddenness with which the change took place, and the significant implications this had for various process at multiple levels of the relationship.

Inter-case and inter-theme comparison

Issues of knowledge transfer are fundamentally implicated in all aspects of GSW, including standardization, identity, communication, space/place and power and control. Standardization of knowledge systems takes place in many ways, such as through the use of certified software development methodologies, development of universal ˜templates for management and the implementation of various forms of global ˜best practices . Implementation of these standards is never unproblematic and the resistance that develops as a result of any attempts is key to understanding the evolution of the GSA process. Standardization of knowledge systems is inextricably linked up with issues of power and control, as it reflects whose standards are imposed upon whom. In the Gowing case, for example, Eron developers were made to use specified structured methodologies for software development; this requirement served as an instrument to bring control and discipline within the Gowing structure.

Knowledge issues are fundamentally implicated in questions of identity since developers, as discussed in the ComSoft case, are seen to find meaning and relevance in the kind of technologies with which they work. As the GlobTel case demonstrates, working with legacy systems has negative implications on the self-worth of developers, often leading to their flight from the organization. The temporal perspective on GSAs also emphasizes how the relation between knowledge and identity evolves and is redefined over time. At the early stage of the relationship, when the developers are new to the technology domain, they do not mind working with the more routine tasks of bugfixing and testing. However, with time as the developers increasingly gain knowledge their expectations also change; they expect higher-value work and better conditions. As the GlobTel case demonstrates, if these changing expectations are not met, frustration and resistance develops. This relation between nature of work and expectations is not determinate and industry developments can add new opportunities and challenges. This is demonstrated with GlobTel s ˜right-angle turn when the advent of the Internet redefined the focus from the need for knowledge about GlobTel s telecommunication products to an emphasis on data and the Internet. The Indians believed that this shift in knowledge focus placed them on a ˜level playing field with GlobTel, as it reduced some of the earlier knowledge differentials. However, the advantage of this ˜level playing field was offset by the fact that the Indians were considered to be too remote, in ˜space , from the end-users of these new technologies which were primarily located in North America and Europe. Proximity to the end-users and the need for a ˜place-like understanding was seen a basic precondition for the development of new Internet-based technologies.

Contributions to social theory

In box 10.8 we first summarize some key features of the ˜model of and ˜model for relationship between knowledge transfer and globalization before discussing specific contributions to macro-theory on globalization.

Box 10.8 ˜Model of and ˜model for relationship: knowledge transfer and globalization

Global opportunities for knowledge work enable movement of developers, which in turn leads to variability of knowledge quality, with project-level implications
Despite the attempts to standardize knowledge systems at one end, there is still a strong dependence on individuals
While technologies such as videoconference provide the potential for disembedded knowledge systems globally, they depend on the local situation to make them work
Prior experience of work in global contexts (UK and USA) shapes norms of work in particular conditions and through work in different contexts new norms are developed
Ability to be effective in the global marketplace is still dependent on the effectiveness of local networks “ to be able to recruit from quality educational institutions, for example
˜Born global firms are at a disadvantage in the light of the brand name and infrastructure of large MNCs
Applying universal criteria to define forms of knowledge varies with cultural contexts
Globalization intensifies processes of reflexivity

Knowledge, knowledge work and knowledge workers are key themes surrounding contemporary discussions of globalization and the information society, as well as the digital divide. These discussions are visible in different domains including business organizations as ˜knowledge management and international development as the ˜digital divide . The global importance of this issue of knowledge can be gauged from the fact that the World Bank Annual Report (1998) was titled Knowledge for Development . The basic assumption made in contemporary debates is that the commodity ˜knowledge can be codified, formalized and torn away from its local context and rearticulated across other time, space and cultural domains. This process of knowledge rearticulation is emphasized by Giddens (1990) through his concepts of ˜disembedding mechanisms and ˜time “space distanciation . Giddens argues that these are key dynamics of contemporary globalization: for example, the assumption underlying distance education initiatives is that the knowledge exchanged between the teacher and student in the setting of a classroom can be formalized as commodities representing ˜course materials and through ICTs distributed to students all over the world.

The debates around the ˜digital divide primarily concern the issue of inequity in access to knowledge, and the question of whose knowledge is being transferred to whom and the appropriateness of it. While we have not directly touched upon these issues, we have discussed a related issue of intellectual property (IP) that raises some similar concerns. For the Indian firms to continue to move up the value chain, they believe that they should in the longer run gain some IP ownership. They thus seek to change the pricing models from one based on ˜time and material in which they get paid for their labour , to one based on royalties or licenses where they are compensated for the knowledge and value they bring into the process. However, as we have seen, this ambition is rarely realized. The knowledge differential is difficult to bridge and ownership continues to remain with the sourcing company. The Indian firms often feel resentment and seek alternative opportunities in the global marketplace, such as in Japan.

Although attempts to standardize and universalize knowledge systems are a continuous quest of the sourcing company, limits are reached owing to particular local conditions. Videoconferencing provides the potential to disembed knowledge systems; however, much to the dismay of the Sierra management, it first found that it could not easily clear the equipment through Indian customs and later saw that power fluctuations negated the effectiveness of the videoconference meetings between staff in international locations. The original aim of Sierra was to have knowledge about development taking place in India transparent to all, including clients. However, because of the physical distance of the end-clients in the UK from the Sierra premises, the end-users could not easily participate in the videoconference sessions and therefore the aim of ˜opening up the black box of knowledge could not be fully realized. We also see how the attempt to universalize knowledge systems is paradoxically highly dependent on individuals like Mitra in Sierra (chapter 7), who did not seem to have the global vision that he was responsible for implementing. These examples demonstrate the way in which the global depends on the local. The converse is also true: small ˜born global firms like Sierra are at a disad- vantage when competing against the global brand names and financial power of large MNCs like GlobTel. Analysing these linkages between the local and global can provide valuable insights into various aspects of social theory, such as how disembedding occurs or how the dynamics of the ˜space of flows rolls out in practice.

Reflexivity of knowledge systems is another key feature of globalization (Beck, Giddens and Lash 1994). We have discussed various examples of how these needs for reflexivity arose from different global conditions and how firms responded to them at a micro level. Sierra, in response to the trends towards e-commerce, decided to shut down its India operations and move the developers to other Western countries. GlobTel, in response to the challenges raised by the Internet, decided to take a ˜right-angle turn , which had significant implications for their India relationship. ComSoft, responding to what it saw as declining business opportunities in North America, decided to focus primarily on Japan in the telecommunications domain. The processes of reflexivity and how firms and individuals respond, raise issues of unintended or side effects. GlobTel could not have envisaged that with the learning they provided the Indian firms would explore new avenues even at the cost of their relationship.

Power and control

Key features

We first present in box 10.9, some key features of power and control.

Box 10.9 Key features of power and control

A relational perspective to power is emphasized through links between power, culture and knowledge
Cultural norms help to define who can exercise power and how, and how much is acceptable
Another aspect of the relational perspective is the power “knowledge linkage, which helps to shape mechanisms for ˜control at a distance
Mechanisms for control at a distance include the making of ˜drilled individuals drawing upon regimes of truth encapsulated in ˜non-human actors such as software development methodologies and ICT-enabled project monitoring practices
The power “knowledge continuum is never static and varies with temporal stages of the relationship
Structures of power are a function of history and geography and thus extremely difficult to transcend, even through the use of ICTs
The ˜informating capacity of new ICTs introduces new dynamics of power, for example through the ability to ˜micro-manage project progress

We have emphasized a relational perspective to issues of power and control. These relationships are mediated through aspects of knowledge and culture; they play out in different domains. The power “culture relationship establishes who has the power to define norms of work, to what extent and for whom. Mitra was frustrated because of the norms of hierarchy that he felt existed among the Indian developers. He believed that a creative process should involve all people speaking freely ; in contrast, the Indians wanted him as the ˜boss to define the norms for them. The Japanese case in chapter 9 demonstrates very different norms at work where decisions are made by large- sized teams engaging in prolonged negotiations. The Indians, because of their prior North American experience, preferred a relatively individualized form of hierarchy and working; they were at times frustrated by the Japanese approach.

The power “knowledge relationship is another key element of the relational perspective that helps to shape the processes of ˜control at a distance . Individuals can also serve as instruments of their own control. They are ˜drilled through the use of standardized knowledge encapsulated in certified software development methodologies, well- specified and structured project management practices that are monitored through the use of various forms of ICTs (such as videoconferencing). ICTs, with the capacity to make visible action at a distance, can potentially also serve as instruments of control. Elaborately defined project management practices also serve to structure the work at a micro level and further ˜drill the individuals. So while ICTs provide a number of interesting possibilities for instantaneous and simultaneous coordination of software development activities across time and space, these possibilities are structured by the socio-political context of their use.

The use of these new ICTs, software development methodologies and project management practices are a function of history and geography. They can never, therefore, absolutely transcend or break down the power and control structures. Historically it has been the MNCs that have had the financial muscle and brand name to engage in global work. Over time, they have built up brand names and images that are difficult to compete with, especially for the smaller firms like Sierra. Sierra experienced this handicap while trying to recruit high-quality staff: it found that the developers preferred to work with the larger firms. The historical/colonial relationship that existed between the UK and India can still be seen in play: it is not a coincidence that it was Gowing UK, which attempted to ˜neutralize Indian accents rather than the other way around. Again, for videoconferencing to work, the meeting times of the two sides need to be synchronized; in the GlobTel case Indian developers resented that it was always ˜their time that was being compromised to accommodate the ˜GlobTel time . Meetings were typically scheduled at times that were late at night for the Indians so that the North Americans could walk in fresh with a cup of coffee while the tired Indians were waiting to go home. This example illustrates that geography cannot be eliminated by ICTs, but in fact needs to take into account the structures of control and power.

Inter-case and inter-theme comparison

Issues of power and control are linked with a number of other themes. As discussed in relation to standardization, power and control issues are fundamental as they concern who has the ability to impose what standards over whom. Standardized methodologies for software development and project management are themselves encapsulations of the power “knowledge relationship. However, the dialectic of power and control is always in operation, since there is inevitably a resistance and backlash to imposition of standards, and through negotiations standards will be revised. Communication involves the development of norms around the choice of technology used, the frequency of use and even the nature of the content of the messages. Issues of power and control shape whose norms are put in place. Even despite the Indians feeling excessively micro-managed, GlobTel decided to have weekly project-progress monitoring meetings on Monday mornings, and set up a structure that included minutes for the meeting agenda being exchanged on Friday before the meeting.

The metaphors of space and place, we have argued, need to be integrated into the material realities of economics, geography and politics. Power and control issues are fundamental to this integration. As in the MCI case, we described the negotiations that took place as MCI proposed establishing a proximity-development centre to develop a more place-based understanding of GlobTel s practices. However, GlobTel shot down the proposal on economic considerations. In contrast, when GlobTel proposed setting up its own offshore development centre in India, despite Indian resistance, the centre was set up a few years later. Questions of identity are also linked to issues of power and control. As discussed earlier, GlobTel s global manager initiative could at one level be seen as an exercise of power in defining its frame of reference for the construction of identity. Knowledge and power issues have been discussed extensively, especially as they relate to the development of mechanisms to facilitate control at a distance.

Contributions to social theory

We first summarize in box 10.10 the key features of the ˜model of and ˜model for relationship, and infer from it some key contributions to social theory.

Box 10.10 ˜Model of and ˜model for relationship: power and control and globalization

The assumption of ˜frictionless work in globalization is challenged by structures of power and control; through practice, new notions of GSW are constructed
Software development methodologies reflect universal knowledge systems on the one hand, and yet on the other are linked to local power structures; through the application and use of these methodologies, power relationships can be reconfigured
Changes in locally situated power structures can be seen as manifestations of the ˜reverse effects of globalization
The micro-level dynamics of the GSA process help to shape the relationship between ˜flows of power and the ˜power of flows
Division and commodification of labour can be an outcome of GSAs, but need to be differentiated with respect to the different kinds of work being done
GSW, while reducing some historical structures of power and control, also opens up new ones
While ˜control at a distance is a basic precondition for GSW, the mechanisms for control need proximity to be effective

The underlying assumptions of globalization that ˜geography is history and ˜distance does not matter are seriously challenged when we examine the micro-level dynamics of GSW and how they unfold over time. If, as we have argued, structures of power and control are a product of historical and geographical circumstances that can never be absolutely transcended, then the interesting questions are which aspects of history and geography can be transcended, how and under what conditions. It has been argued that in the ˜network society those firms which will reign supreme are those that fundamentally rely on knowledge, and have the capability to leverage this knowledge by strategically situating themselves in global informational networks. However, this is not unproblematic. It is still primarily the large firms that have the power to lobby with governments and hence the capability to make large investments in exclusive high-speed networks. In contrast, the smaller firms often need to rely on using networks and infrastructure that may be controlled and regulated by the state. Although in many countries these restrictions are being removed, it is safe to say that this will not be the case everywhere. Smaller firms are thus subject to greater delays in obtaining access to markets and find it relatively more difficult than larger firms to reach economies of scale. However, it is not the case that such handicaps are inevitable. Examples abound of small firms such as Hotmail which established themselves through the strategic development of extremely innovative products and alliances with larger firms. Such a nuanced understanding of how knowledge-based firms operate can be developed through the analysis of power and control issues. This can support efforts to gain deeper understanding of the dynamics in Castells ˜network society .

GSW, while providing the potential to break down to some extent historically created structures of power and control, can also help to open up new ones. Beck (2000) discusses relocation of work from Germany to parts of the world that MNCs find more cost effective for their operations. This reflects a breakdown of structures of bureaucracy: the bureaucracy in India has historically tried to control the entry of MNCs but the clustering of large MNCs in a city such as Bangalore creates other kinds of power structures, such as the development of an elite group of highly paid IT professionals in the city. This has broader societal implications for property prices and the cost of living, with adverse effects on people employed outside the IT sector. The German ˜green-card initiative has had implications for policies that have historically tried to restrict immigration . Giddens discusses such effects through the concept of ˜reverse globalization “ how not only local events are being shaped by global happenings but also the reverse: relocation of jobs to India may lead to issues of underemployment and unemployment in Philadelphia, USA. The ˜networked perspective that we have taken on GSAs helps us to understand the micro-level dynamics of how power- and control-related ˜reverse globalization effects can take place in practice.

The anti-globalization debate emphasizes the kind of dangers and risks that people perceive to exist with GSW arrangements. GSW fundamentally involves the breaking down of software development into discrete modules and then spreading it around the world where it can be done most efficiently . These different modules of development can be micro-managed through the use of ICTs and productivity based on ˜time and material can be measured and rewarded or punished according to the outputs. These characteristics of GSW represent Mowshowitz s (1994) vision of the future of work that involve the ˜switching of resources and ˜separation of the means and ends of production.

Switching of resources implies that global resources from different locations can be drawn upon and switched, implying the means and ends of software development work can clearly be separated from each other. Various authors have criticized such visions in the past. Braverman (1974) and the labour theorists have seen such ways of organizing work as a systematic progression in the development of mechanisms to control the work force. Ritzer (1996) has similarly critiqued the ˜McDonaldization of society through the increasing tendency towards scientific management or ˜Taylorization of work systems. In the same vein, Walsham (1994) has critiqued Mowshowitz s vision, arguing that it will lead to a dehumanization of the work force. While these critiques have to be seriously considered, we argue that a more nuanced vision of the effects of GSW needs to be taken. GSW includes a broad spectrum of task from running call centres in which Taylorist principles can be applied in near totality to higher-level new product design tasks where it may be counterproductive to apply them. In between, there are numerous shades of work amenable to Taylorist organization to a varying extent. It thus becomes important not to make sweeping generalizations about GSW, in either positive or negative terms, but instead to take a case-by-case approach.

Communication

Key features

We first outline in box 10.11 some key features of communication.

Box 10.11 Key features of communication

Communication in GSAs is shaped by the stereotypes that actors have of other cultures and nations
The effectiveness (or not) of communication shapes various aspects of GSA, including the business model adopted to project management practices and to the development of social relationships
Effectiveness of communication is a key aspect to be considered when defining the mix of people to be on-site versus offshore
ICTs are necessary to enable communication in GSAs, but not sufficient to ensure efficient collaboration
Communication depends on various elements including understanding of language and knowledge of the meanings of words and phrases as they are used in different situations and contexts
Groups and cultures favour different styles of communication; ˜organizational or ˜professional approaches to knowledge involve communication styles that are ˜low - and ˜high -context, respectively

Various authors (for example, Couch 1989) have described communication to be fundamental in the shaping of social life. In GSAs, the significance and centrality of communication process is magnified since a large part of GSW takes place in conditions of separation where work- and non-work-related interaction occurs through the use of electronically mediated communication. Communication issues arising from the separation of time, space and cultures, coupled with complexities associated with the use of ICTs, help to shape various decisions related to the selection of the business model, the structuring of project management practices and the shaping of social relationships.

These complexities vary with different stages of the relationship as various norms are established, reflected and also redefined in and through ongoing communication. For example, an important norm concerns the amount of contextual information that is provided in messages. The Indian “Japanese analysis brings to the fore how approaches to communication vary with the extent of contextual information that actors reflect and also expect in their messages (verbal or written) that they transmit. Difference in expectations on these issues potentially can lead to communication dissonances .

It is often argued that analysing cross-cultural communication in terms of national stereotypes is limited, as it is static and tends to reduce the human agent to the status of a ˜cultural dope (Garfinkel 1967). However, a key implication of our analysis is that these national stereotypes cannot be dismissed since actors draw upon such conceptions in the course of developing communicative action. These stereotypes can in Giddens (1984) terms be described as ˜resources that actors draw upon in their everyday act of communication. For example, an Indian who sees Japanese in general to be ritualistic and taking a long time in making decisions writes few and short email messages and tries to address issues in face-to-face meetings to the maximum extent possible. However, these stereotypes are never static and are redefined or reinforced in and through the process of communication itself.

Inter-case and inter-theme comparisons

Communication is fundamentally implicated in other themes including space and place, standardization, identity, knowledge transfer and power and control. Gowing UK (chapter 8) made use of consultants to ˜neutralize the Indian accents so that the Indians could be understood more easily by the British personnel over the electronic medium. This reflects Gowing s power over the Indians rather than the other way around. GlobTel through their ˜global manager initiative tried to standardize communication competencies, such as who should discuss what with whom. We have in the discussion on standardization emphasized a hierarchy of socio-political standards in addition to technical standards and their relation to different levels of GSW. As work becomes higher-value (for example, involving design activities), the need for communication increases as compared to lower-level tasks of bug-fixing and maintenance that are less interdependent. Standardization of communication processes can thus be associated with higher-value work that requires a greater degree of interdependent activities.

Complexities of knowledge transfer are centrally associated with issues of communication. A key implication in this regard concerns the relation between approaches to knowledge and communication styles. Through the Japanese case in chapter 9 we analysed how different styles of communication (high- versus low-context) are related to varying approaches to understanding knowledge ( ˜organizational versus ˜professional ). Varying styles of communication cause complexities in knowledge transfer. The Sierra case demonstrated the difficulties in transferring and interpreting information about requirements analysis; such problems arise from issues of tacit knowledge and the lack of contextual understanding the Indians possessed of the domain about which requirements were being communicated. The greater the emphasis on knowledge that is ˜place - or context-dependent, the higher is the complexity in making communication effective over distance, mediated by ICTs in ˜space . The linkage between communication and space and place also has implications for identity. An Indian programmer in Sierra told us that he used two accents, one a British accent to speak to the UK clients (in space) and the other, a ˜South-Indian accent in his home (in place). Switching between these two accents raises broader existential questions relating to the individuals sense of belonging .

Contributions to social theory

In box 10.12 below we outline key features of the ˜model of and ˜model for relationship between communication and globalization.

Box 10.12 ˜Model of and ˜model for relationship: communication and globalization

The national and cultural stereotypes which actors have are key in shaping communication practices
The effectiveness (or not) of these processes helps to redefine our understanding of other cultures; this leads to new situated meanings of globalization
Working at a distance, a basic condition of globalization, meets its limits in the effectiveness or not of communication; this leads to revised understandings of the meaning of what it is to work at a distance, and with it the meaning of globalization
The assumption that ICT-enabled communication can ˜make geography history is problematic and actors realize the need to understand both geography and place in order to communicate effectively
The effectiveness of communication shapes decisions relating to what work can or cannot be outsourced, and with it the opportunities one has or does not have in the global marketplace

The focus on understanding communication processes in the GSW task helps to develop a number of contributions towards social theory, including the role of national stereo- types in shaping global work. We have argued that national stereotypes should not be dismissed on academic criteria as being inadequate, but should instead be treated seriously as resources that exist as memory traces in actors heads and which are drawn upon in shaping communication. In this way, we extend structuration theory by incorporating a micro-level understanding of the communication process and also incorporate in it the important cross-cultural dimension.

Giddens theories of modernity and globalization emphasize the role of disembedding and re-embedding mechanisms in shaping contemporary life. While this idea sensitizes us to the macro-level dynamics that are in play in globalization, it is limited in explaining how these dynamics roll out in practice. A focus on communication processes emphasizes the reasons why complexities in knowledge transfer occur. An analysis of the manner in which actors take one communication style and vocabulary from one cultural context to another also helps to understand how ˜hybridized models of globalization are created. In Japan, the Indians start with a dominant North American frame of reference, but over time start to introduce a Japanese flavour into their interactions.

We can also add to our understanding of the dynamics of Castells (1996) ˜space of flows . Castells discusses aspects of simultaneity and synchronicity of new ICTs and their potential to shape the flows of knowledge in space. However, situating the use of these ICTs for communication within a broader cross-cultural context helps us to understand what some of the inherent limits in the use of these technologies are.

In summary, we have attempted to develop a theoretical synthesis of the various themes that have been discussed in the book. These themes have been discussed in relation to their key features, their relation to other themes and the contributions that can be developed for social theory. The next section considers future extensions and limitations.