Behavioral factors in offshoring decisions: A qualitative analysis

Using the behavioral lens as a theoretical complement of rational models, I examine factors that influence decisions related to offshoring of business activities. A qualitative analysis of 22 cases of companies from six diverse industries provides evidence that besides the commonly acknowledged offshoring decision related factors, such as labor cost, risks, access to markets, and quality of talent, there are other important influences. These reflect decision makers' personal experiences, attitudes and emotions and cognitive limitations. I discuss findings in light of current theory and practice.