Organizational responsiveness to anti-offshoring institutional pressures

•Introduce anti-offshoring institutional pressures to offshoring research.•Study factors that explain organizational responsiveness to such pressures.•Social legitimacy implications and mimetic influence increase responsiveness.•Uncertainty decreases responsiveness. Offshoring success is not significant.•Success weakens effect of social legitimacy and strengthens effect of uncertainty.

We explore the extent of organizational responsiveness to pressures from institutional constituents against offshoring of information technology and business process services. Drawing on a theoretical framework that integrates institutional and strategic explanations, we proposed that organizational responsiveness to anti-offshoring institutional pressures is a function of both the characteristics of such pressures as well as organizations’ prior success with offshoring. Results based on survey data from 84 offshoring client organizations indicate the following: Both greater organizational expectations of enhanced social legitimacy and mimetic influences from other organizations led to greater organizational responsiveness. Both conflict of institutional expectations with organizational goals and greater regulatory environment uncertainty reduced responsiveness. Organizational dependence on a key pressuring constituent had no effect. Surprisingly, organizational success with offshoring had no direct effect on responsiveness and we examine why this might be so. However, it attenuated the otherwise strong positive effect of social legitimacy and exacerbated the negative effect of regulatory environment uncertainty.