In Pursuit of Institutional Legitimation: Structuration of an Offshoring Decision

Abstract

This article applies structuration theory and institutional theory to analyze the organizational dynamics behind a financial services company’s decision to initiate information technology services offshoring. The analysis finds the decision to have been an emergent one, crystallizing from interactions between upper management’s actions and an evolving structural context. Further, their actions were driven more by a legitimation-oriented desire to adhere to various institutional norms rather than purely rational considerations. These findings of isomorphism question the notion that offshoring decisions result from straightforward objectives such as cost savings or quality enhancement. Particularly under uncertainty, they may be subtly shaped by institutional influences in antecedent contexts. The implication is that the planning, execution, and evaluation of offshored projects must take into account the dynamic imperatives embedded in these contexts, and not be anchored solely to static expressions of short-term or long-term objectives.