Managing Risks in Offshore Outsourcing Relationships with China: A Relational View

<p>Over the past two decades, offshore outsourcing to emerging economies, such as China, has been viewed by firms as an efficient way to gain competitive advantage. Literature indicates that offshore outsourcing can enhance firms’ competitiveness and efficiency by reducing costs, expanding relational ties, freeing up scarce resources, and leveraging capabilities. However, the research relating to risk management of offshore outsourcing relationships has not been widely reflected in extant literature. This study addresses this research gap by developing a conceptual model that examines the association between management approaches and the risks in offshore outsourcing relationships. This study applies two types of risks being relational risk and performance risk, as dependent variables. Based on social exchange theory and transaction cost theory, this study proposes two management approaches to minimise risks in offshore outsourcing relationships, which are the relational approach and the transactional approach. Empirical testing of the conceptual model employed a quantitative approach using an online survey of 41 managers from Australia and New Zealand. The survey data was analysed using a multiple regression technique, which revealed four valuable findings. Firstly, a higher level of relational risk leads to a higher level of performance risk. Secondly, the relational approach, based on interdependence of outsourcing exchange firms, can reduce performance risk. Thirdly, an increased level of relationship-specific investments contributes to the rise of performance risk. More importantly, the survey results show that relational risk plays a mediating role between relational factors and performance risk. This study recommends that offshore outsourcing firms employ the relational approach to manage performance risk. The mediating role of relational risk also indicates that firms should not just concentrate on minimising the performance risks of offshore outsourcing relationships, but should also manage relational risks due to uncooperative behaviours such as opportunism.</p>

Managing Risks in Offshore Outsourcing Relationships with China: A Relational View

<p>Over the past two decades, offshore outsourcing to emerging economies, such as China, has been viewed by firms as an efficient way to gain competitive advantage. Literature indicates that offshore outsourcing can enhance firms’ competitiveness and efficiency by reducing costs, expanding relational ties, freeing up scarce resources, and leveraging capabilities. However, the research relating to risk management of offshore outsourcing relationships has not been widely reflected in extant literature. This study addresses this research gap by developing a conceptual model that examines the association between management approaches and the risks in offshore outsourcing relationships. This study applies two types of risks being relational risk and performance risk, as dependent variables. Based on social exchange theory and transaction cost theory, this study proposes two management approaches to minimise risks in offshore outsourcing relationships, which are the relational approach and the transactional approach. Empirical testing of the conceptual model employed a quantitative approach using an online survey of 41 managers from Australia and New Zealand. The survey data was analysed using a multiple regression technique, which revealed four valuable findings. Firstly, a higher level of relational risk leads to a higher level of performance risk. Secondly, the relational approach, based on interdependence of outsourcing exchange firms, can reduce performance risk. Thirdly, an increased level of relationship-specific investments contributes to the rise of performance risk. More importantly, the survey results show that relational risk plays a mediating role between relational factors and performance risk. This study recommends that offshore outsourcing firms employ the relational approach to manage performance risk. The mediating role of relational risk also indicates that firms should not just concentrate on minimising the performance risks of offshore outsourcing relationships, but should also manage relational risks due to uncooperative behaviours such as opportunism.</p>

Longitudinal Risk Profiles for Physical, Psychological, and Sexual Dating Aggression: a Latent Profile Analysis with Spanish Adolescents

Introduction Understanding the specific risk profile for distinct forms of dating aggression (DA) is very informative to define cross-cutting interventions. The study aims to evaluate whether specific profiles of risk defined using a person-oriented approach predicted physical, sexual, and psychological DA after 6 months. Methods Eight hundred sixty-six Spanish adolescents were interviewed at two time points (50.5% male; average age = 15.04). Latent profile analysis at T1 was used to delineate profiles of individual and relational risk. Results A three-class model best represents the data: a “normative” class (N = 768; 88%); a “highly aggressive” class characterized by acceptance of violent norms, bullying behaviors, and anger dysregulation (N = 13, 1.5%); a “jealous-conflictual” class characterized by cognitive and emotional jealousy, negative couple quality, and anger dysregulation (N = 85, 10%). Controlling for age, sex, and longitudinal stability, physical DA was predicted significantly by the “highly aggressive” profile (β = .11; p < .05), psychological DA by the “jealous-conflictual” profile (β = .16; p < .01), and sexual DA by the “jealous-conflictual” (β = .20; p < .001) and “highly aggressive” profile as a trend (β = .08; p = .071). Conclusions Specific risk profiles differentially predict risk for physical, sexual, and psychological DA perpetration. A general aggressive pattern predicts physical DA and sexual DA weakly, whereas psychological and sexual DA are associated with a couple of risks, where the dimension of jealousy, control, and conflict characterizes the dynamic between partners. Policy Implications Findings suggested that physical DA, and at a lower level sexual DA, should be prevented using cross-cutting strategies on general aggression. Psychological and sexual DA might require more contextually based interventions.

Relational Theory of Risk and Its Applications to Game Theory Problems of Non-Numerical Economics

The purpose of the work is to study the foundations of a general risk theory. To form a single formal concept of risk, a number of definitions of the term “risk” found in the literature have been analyzed. There is a certain redundancy in the number of entities involved in the definition of this term. The necessary attributes of the genesis of this concept have been identified. Based on the analysis, using the instrumentation of modern algebra, a new formal, mathematically strict definition of risk is built. In fact, the paper proposes a new relational theory of risk, attracting only two entities to define the concept of “risk”: set and order of preference, inducing on this set the minimum structure of a semilattice or family of semilattices. The paper also describes an approach for studying in theoretical-risk setting problems in which there is no risk, in the traditional sense, in which the preference relation does not induce a semilattice and/or is a preorder. It is shown that in this case, when identifying a suitable equivalence relation on a set of outcomes, the problem can be reduced to a classical theoretical-risk setting. The second part of the paper contains an example of the direct use of a new relational risk theory in the study of nonnumerical economies. The problem of analysis of the situation of confrontation between two technologically unequal countries in game-theoretical staging is considered. We are talking about a grandiose space program - the organization of manned flights to Mars. The scales of the object of confrontation, the impossibility of quantitative assessments of the consequences of the implementation of scenarios of this project, make any quantitative assessments impossible at the stage of preliminary analysis. Therefore, only expert estimates of preferences at multiple outcomes can be used as initial data for confrontation analysis. Under these conditions, the emergence of certain risks of the project implementation for both players was demonstrated. During the analysis of the example illustrating the application of the new relational risk theory, a number of optimality principles considered in game theory were extended to the case when only partial orders are given on a set of game outcomes. As the methodological basis of the research we used the achievements of modern algebra, in particular the theory of relational systems, as well as the concepts and methods of game theory, such as representing the game in normal form, selecting dominant and eliminating dominant strategies, choosing solutions from many cautious strategies, as well as from the set of Nash Equilibria. The main result of the paper is the substantiation of relational risk theory, the formation of its conceptual base, the demonstration of the constructive nature of the theory on the example of solving a specific problem of risk analysis in an economic system described in terms of non-numerical characteristics. The material presented in the article is of interest to researchers in the field of risk theory and game theory, as well as to practitioners engaged in socio-economic and political forecasting in conditions of lack of information.

Trust and R&D investments: evidence from OECD countries

This paper examines two potential mechanisms – access to credit and reduction in relational risks – through which social trust can affect R&D investments. Social trust can increase R&D investments by expanding firms' access to external finance with which they can use to fund promising R&D projects. It can also increase R&D investments by reducing relational risks that expose firms to ex-ante and ex-post holdups or expropriation risks. Using industry-level data on R&D investment intensities in 20 OECD countries, I test these mechanisms by evaluating whether more external finance dependent and relational risk vulnerable industries exhibit disproportional higher R&D investment intensities in trust intensive countries. The results indicate that external finance dependent industries and relational risks vulnerable industries experience relatively higher R&D investment intensities in trust-intensive countries. Therefore, the results underline access to external finance and reduction in relational risks as causal pathways linking social trust and R&D investments.

Testing structural and relational embeddedness in collaboration risk

The study investigates the effect of embeddedness, defined as a property of interdependent relations in which organizations are integrated in a network, on collaboration risk emerging from relational uncertainty. Despite efforts to understand the structural effects of network governance, embedded relationships and their influence on collaboration remain relatively unexplored. A case of intergovernmental collaboration for emergency management is used as a test bed to examine the role of embeddedness in disaster networks and to extend the knowledge of collaboration risk within the institutional collective action framework. We hypothesize and test the effect of relational and structural embeddedness on the level of collaboration risk that an organization perceives. Our analysis of 69 organizations engaged in emergency management operations in the Seoul Metropolitan Area, South Korea reveals that both structural and relational embeddedness facilitate organizations to mitigate perceived collaboration risk. The results suggest that reachability secures relief of relational risk, and that commitment relationships bind participants.

Antecedents of collaboration and drivers of relational risk in public safety networks

Purpose The purpose of this paper is to identify the inter-related impact of the antecedents of collaboration on the emergence of relational risk and the impact of relational risk on the effectiveness of collaboration in public safety networks (PSNs). Design/methodology/approach The research is based on desk research and a survey questionnaire. The analysis of the results was based on the modelling of structural equations. Findings The analyses indicate how the antecedents of collaboration influence relational risk in PSNs and the extent to which this risk, in turn, may affect the overall effectiveness of collaboration in the networks studied. The findings identify the antecedents that have the greatest impact on the emergence of relational risks, the drivers of relational risk in PSNs and the impact of the drivers of relational risk on collaboration in the networks. Originality/value The study of relational risk is rarely undertaken with little literature or research in the field of public safety. The added value is the identification of the causes of the relational risk among the antecedents of collaboration in PSNs and the analysis of the impact of this risk on the effectiveness of inter-organisational collaboration.