Abstract
This paper contributes to theory building efforts around the concept of knowledge connectivity and its relevance in buyer-supplier relationships in global value chains. We use the Pakistani IT industry as our study context. Pakistan suffered a significant adverse perception bias following terror attacks in 2008-09. We based our illustration on the experiences of 12 Pakistani offshore service providers (OSPs) who succeeded in offsetting the negative implications of the country’s adverse political environment. The case firms link into two distinct value chain configurations. In each configuration, we observe a distinct course of strategic action, which we term step-up and break-out, respectively. While these observations emerged from the Pakistani context, the implications of the resulting dynamic framework for theory and practice go beyond this particular adverse country setting.
Highlights
The present paper sets out to investigate how 12 Pakistani offshore service providers (OSPs) linking into two distinct value chain configurations survive and grow despite their adverse home country context
The findings part of the paper comprises two parts: First, we demonstrate how the Pakistani software industry fits into the offshore services global value chain (GVC) and how the local institutional setting shapes the conditions for and constraints on connectivity
This paper investigated how 12 Pakistani OSPs had survived and grown despite their adverse home country context
Summary
The present paper sets out to investigate how 12 Pakistani offshore service providers (OSPs) linking into two distinct value chain configurations survive and grow despite their adverse home country context. Does Pakistan belong to the category of traditional emerging markets due to the low level of development of its factor markets and institutions (Bilgili et al 2016; Hoskisson et al 2013), but the uncertainty which stems from significant security threats makes it an adverse environment. This heightened uncertainty and unpredictability creates fear and affects the way individuals and organisations make economic decisions and interact. The constraints imposed on incumbent firms by their adverse environment are far greater than those in mid-range or newly industrialised economies (Bilgili et al 2016)
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