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Human Capital in the Indian IT / BPO Industry analyses human capital management in the Indian information technology (IT) and business process outsourcing (BPO) industry, which has created a new paradigm for organising global talent engaged in designing and delivering IT and BPO services.



1. Introduction

This research monograph is a result of a robust analysis of human capital management in the Indian information technology (IT) and business process outsourcing (BPO) industry, which has created a new paradigm for organising global talent engaged in designing and delivering IT and BPO services. This analysis is an extension of our decade-long programme of research focusing on the Indian IT/BPO sector. Incorporating themes from our previous work, recent publications and ongoing research, we present an integrated account of the numerous theoretical and research contexts that needed exploration, description and analysis before we could attempt to synthesise the key human capital management practices prevalent in the industry (Malik, 2009; Malik & Nilakant, 2011; Malik et al., 2012; Pereira & Anderson, 2012; Malik, 2013a, 2013b; Pereira & Budhwar, 2015; Pereira & Fontinha, 2014; Pereira & Scott, 2014; Malik & Rowley, 2015a; Pereira et al., 2015, 2016). While several authors, both in India and abroad, have scripted various aspects of the Indian IT industry’s spectacular growth, we believe that the evolution of innovative talent management strategies of these knowledge workers has received scant attention. Our book contributes by providing a rich theoretical grounding in managing human resources in the context of high-technology professional services firms, which the Indian IT/BPO sector typifies. We focus on the design and implementation of high-performance work systems (HPWS) in the context of Indian IT/BPO organisations.

Vijay Pereira, Ashish Malik

2. Global Offshore Outsourcing and the Indian IT/BPO Sector: Theoretical Perspectives

The main arguments in this chapter are as follows. For effectively managing human capital (HC) in the Indian IT/BPO sector, which typifies a business-to-business relational approach, one needs to accommodate both inward-looking and outward-looking approaches. Although transaction cost economics (TCE) can provide a good explanation for the initial motivation for organisations to offshore services to India, other aspects in an outsourcing relationship render the inclusion of additional theoretical lenses. This is coupled with high expectations of outsourcing firms when they offshore to the Indian BPO industry. However, it is not sufficient to explain why offshoring arrangements are sustained over the long term, as evidence here is scant. Similarly, while resource-based views (RBVs) and HC and operations management (OM) theories offer additional internal insights about the sources of, and strategies associated with, sustained performance levels required for IT/BPO business relationships, we argue that there is a need for understanding the phenomenon from an external perspective, as well as how organisations incorporate and pay specific attention to the dynamic requirements of its clients. We thus include market-based organisational learning theory for bringing balance into our analysis.

Vijay Pereira, Ashish Malik

3. The Role of Human Capital Management in Firm Performance and Change

The previous chapter provided the contextual and theoretical background of IT/BPO organisations, indicating the importance for these organisations of achieving sustained performance. It did so through the theoretical lenses of TCE, RBV, human capital theory, neo-human capital theory, quality management systems and market-based learning. This chapter focuses specifically on the role of human capital management as part of HPWS. In doing so, it identifies nine themes for future research.

Vijay Pereira, Ashish Malik

4. Theory-Building Through Case-Study Research

This book employs a comparative case-study design strategy and analyses primarily qualitative data from case-study organisations. Although our research program covers several case examinations from the Indian IT industry, in this book we focus on four organisations: two from the BPO sector (covering Recruitment Process and HR Outsourcing firms), and two firms from the IT sector (one each from IT software services and IT product development) for gaining a better understanding of human capital management practices in the India’s IT sector. We explain the variations in human capital management approaches due to the complex interaction between different variables. Given that an associated emphasis of this book is on theory-building and understanding the impact of important factors that shape human capital management in the IT/BPO industry, we follow Eisenhardt’s (1989) recommendation of implementing an inductive approach.

Vijay Pereira, Ashish Malik

5. Case-Study Analysis

In this chapter, we analyse the empirical data from four exemplary case organisations. For maintaining the anonymity of the case organisations, they have been labelled as follows: The IT software services firm is labelled as SOFTSERVThe IT software product development firm is labelled as PRODDEVThe BPO firm is labelled as BPOLAND and the rural BPO firm is labelled as BPOLAND 2 The case organisations are analysed in the above order. We begin with SOFTSERV.

Vijay Pereira, Ashish Malik

6. Discussion and Conclusions

In this final chapter, we review the contributions of various theoretical strands of literature included in this book and how these are integrated with the findings at a within- and cross-case analysis level. It also discusses the cross-case findings and develops two theoretical frameworks for understanding (1) the factors that shape employer-funded training decision-making in the context of the Indian IT/BPO industry and (2) human capital management practices in India’s IT/BPO sector. The chapter then concludes by proposing key explanations for variations in training and human capital management practices within the IT/BPO industry.

Vijay Pereira, Ashish Malik


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