HSD: Intercultural Knowledge System Dynamics in Complex Services Outsourcing

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The globalization of complex engineering services is a component of a much broader trend in the globalization of services which has far reaching impacts on work practices, workforce, economy, and society. Offshore outsourcing, or offshoring as it is commonly described, involves engaging firms outside the United States to execute work that would otherwise be completed by a U.S. client organization. By some estimates, the United States represents as much as 80% of the market for importing outsourced services. Recently U.S. client engineering firms have begun to outsource services of much broader scope and higher complexity to international service providers. The complexity of offshoring this multifaceted design work combined with cultural differences across engineering teams can lead to knowledge system conflicts. Knowledge system conflicts are disagreements or incompatibilities in the expertise, insights, and routines across a working group. The outcomes of these knowledge system conflicts in the offshoring of complex services are unpredictable and provide the focus of this research project. This research project examines knowledge system conflicts longitudinally over the duration of three petrochemical plant design projects to understand and model intercultural knowledge system dynamics. The findings from this research will address a critical gap in understanding as more U.S. client engineering companies are evolving toward the offshore outsourcing of complex engineering services. This is particularly critical since the impact of many intercultural knowledge system conflicts are not governed by regulative standards and may create inefficient and unsafe facilities. This research will have a broad impact helping shape the policies, priorities, and investments for U.S. engineering firms and professionals.