The Effects of Culture when Transferring Knowledge in Offshoring Projects : - A case study conducted between IBM Nordic and IBM India

Abstract: Increasingly, MNC’s transfer parts of their operation to low wage countries in order to cut costs. The theory refers to this as to ‘offshoring’. The transfer of knowledge is a critical part of a successful offshoring project. In cross-boarder projects culture will influence the work. Thus, the aim of this paper is to deepen our understanding of the effects of culture and to reveal unexplored areas in the existing theories, through that the paper contributes with implications for how cultural challenges can be dealt with in an operational context. By connecting leading theories on knowledge transfer, offshoring and culture, a theoretical framework has been created. In order to expand the existing the theories a case study was conducted at IBM, studying two offshoring projects to India. The case study was conducted through eight qualitative interviews with six different respondents. All respondents were managers in IBM Nordic and IBM India. The interviews were conducted individually and as focus groups and carried out as discussions. The empirical data presented in the study also consists of information derived from strategy documents,provided to us by IBM. We found a number of factors to be considered in offshoring projects, which were not part of the theoretical framework,e.g. responsibilities for governance of the project should be decided and that the HR department should be involved from the start. Furthermore we found some areas of the process, which were more influenced by culture than others, such as what creates motivation and trust.