The hidden cost of knowledge transfer in the OS strategy from the manager’s lens

Abstract: Companies that engage in captive offshoring activities as part of their strategic decisions, experience “known and unknown” hidden costs during its implementation influencing a firm’s performance. In this sense, analyzing the hidden costs of the knowledge transfer from different managerial levels and perspectives contributes to conceptualize and enrich the OS literature from the experience of a case study. The purpose of this thesis is to explore the hidden costs in the knowledge transfer as part of the OS implementation from a multi-level managerial perspective. This research has a qualitative methodology and as a research strategy the authors choose interviews that were performed online. The interviews consists of 8 managers from different levels. The findings show that managers from different levels have identified key aspects of the “known and unknown” hidden costs in the knowledge transfer within the micro-level during the OS implementation towards improving outcomes expectations. Communication has been found as a critical factor for the knowledge flow representing the main constraint of an efficient transfer of tacit knowledge in which international projects are influenced by high cultural, language gaps, and geographical distance. Unknown hidden cost was reflected in an unexpected high turnover and limited time frame.