Viewing engineering offshoring in a network perspective: addressing and managing risks

Abstract

Purpose Companies are increasingly engaged with global engineering networks through offshoring of product development activities from R&D to production. This creates many new challenges as operations get physically and culturally decoupled. The purpose of this paper is to improve understanding of how to effectively manage engineering offshoring activities in a context of global engineering networks. The main research question, therefore, is: “Can offshoring of engineering tasks be explained and managed using the concept of Global Engineering Networks (GEN)?” Effective approaches to handling the associated risks of engineering offshoring will be a key area of the investigation. Design/methodology/approach The research approach is based on the engineering design research methodology developed by Blessing and Chakrabarti, including a descriptive phase and a prescriptive phase. Four case studies of large multinational corporations in Denmark were carried out. Data gathering was mainly documentary studies and interviews. The main data analysis approaches were coding (Strauss and Corbin) and pattern‐matching (Yin). The dataset was analysed using the GEN framework suggested by Zhang et al. and Zhang and Gregory. Findings Engineering offshoring presents companies with challenges related to communication and knowledge sharing which is addressed through formal and informal mechanisms as well as a more streamlined operation. However, this did not remove the challenges. The GEN framework suggests a systematic approach to understanding global engineering networks through investigating their contextual features, critical capabilities to compete in a particular contextual circumstance, and configuration characteristics to deliver the capabilities. Using the GEN framework, the challenges faced by companies and the risks associated with their engineering offshoring activities can be explained as a mismatch between the required capabilities and the companies' ability to deliver these capabilities. Originality/value This paper provides new theoretical insight into both engineering offshoring and GEN theories by extending the GEN framework to address complications within engineering offshoring. This strengthens both academic fields, and will be able to help engineering managers to develop appropriate engineering network configurations for offshore engineering operations.

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