Corporate Social and Environmental Responsibility in Global Outsourcing

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Corporate Social and Environmental Responsibility in Global Outsourcing

Ron Babin
Ryerson University
350 Victoria Street
Toronto, Canada
M5B 2K3

and Manchester Business School, UK
rbabin@ryerson.ca

Dr. Brian Nicholson
Manchester Business School
Booth Street West
Manchester, UK
M15 6PB

brian.nicholson@manchester.ac.uk

Corporate Social and Environmental Responsibility in Global Outsourcing

Abstract

The focus of this paper is on the intersection of Corporate Social and Environmental Responsibility (CSER) and global IT outsourcing. Offshore outsourcing of IT and IT enabled services is well established as a business practice towards reducing costs and improving performance. CSER is equally well recognized as a business strategy to define and defend an organization’s position in the marketplace. CSER is becoming increasingly important in global outsourcing in relation to environmental issues for example. The cost of energy has already increased dramatically and further increases appear likely. Sustainability issues related to carbon footprint and greenhouse gases are also becoming increasingly important. Thus responsible and economic energy management has become a critical business capability and an important social responsibility. Offshoring IT operations to a less energy efficient, less environmentally responsible organization may provide increased returns to shareholders, but may also become a CSER liability. The key question this paper seeks to answer is how do social and environmental responsibilities affect decisions to globally outsource IT? Drawing on preliminary fieldwork and an extensive literature search, we conclude that CSER issues will become important capabilities for outsourcers to demonstrate, as buyers are increasingly sensitive to their stakeholders’ social and environmental concerns.

Key words: Outsourcing, Offshoring, Corporate Social Environmental Responsibility

1. INTRODUCTION

This paper presents preliminary findings from research that seeks to improve our understanding of the impact of Corporate Social and Environmental Responsibility (CSER) in global IT outsourcing (GITO) decisions.

Lacity and Willcocks [1, p. 1] define outsourcing as “the handing over of assets, resources, activities and /or people to third party management to achieve agreed performance outcomes”. Sahay, Nicholson and Krishna [2, p. 1] describe global software and related IT services as “work undertaken at geographically separated locations across national boundaries in a coordinated fashion involving real time or asynchronous interaction”. For the purpose if this paper, global IT outsourcing refers to a third party management of IT assets and services, including people and knowledge content, which are delivered on a coordinated fashion across multiple national locations.

In contrast to GITO, corporate social and environmental responsibility is less clearly defined. As suggested by Crane, Matten and Spence [3, p. 5], “definitions of CSR abound, and there are as many definitions of CSR as there are disagreements over the appropriate role of the corporation in society.” Matten and Moon [3, p. 5] have provided the most current and comprehensive definition of CSR, including environmental issues: “CSR is a cluster concept which overlaps with such concepts as business ethics, corporate philosophy, corporate citizenship, sustainability and environmental responsibility.”

GITO is an accepted practice in many business organizations and even regarded by some, such as Thomas Friedman [4], as a fundamental business capability. A significant academic and practitioner literature has emerged over the last few years which has improved our understanding of the management of GITO outsourcing relationships. (Lacity and Willcocks [1,5], Sahay et al. [2], Lacity and Hirschheim [6], Feeney et al. [27]).

However, a gap in the current literature is related to how CSER affects ITO...
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