The purpose of this paper is first, to investigate the effective governance structure in early stage of offshore business process outsourcing (BPO), especially in the case where service provider's language is different from client's language, and second, to explore some of the conditions at the adoption of BPO that are likely to influence the shape of the governance structure.
Ground theory building methodology that builds theory in a grounded and inductive fashion is used for this study. First, a genetic framework to analyze offshore BPO governance structure is derived from extant literature. Then, the framework is applied to an exploratory case analysis to explore an effective form of the governance mechanism.
The hybrid governance structure consists of inter‐organizational coordination mechanisms, inter‐organizational systems and social control. Companies that wish to offshore their business process should select the service providers that can facilitate setting up such hybrid governance structure.
As offshore BPO is expected to be booming in the next few years, this study helps both academics and practitioners to understand the effective governance structure of offshore BPO.
