Performance of low-cost country sourcing projects – Conceptual model & empirical analysis

Several of the firms have failed to achieve targeted performance in their low-cost country sourcing (LCCS) projects. A clear need exists to understand what drives the performance of LCCS projects and how they can be worked around for achieving the targeted performance. In this study, we evaluate the impact of LCCS project's characteristics on their performance using contingency theory. We collected data from 177 professionals directly involved in LCCS projects in automotive industry and used structural equation modeling for conducting the analysis. Our results convey that LCCS Project characteristics, namely Skill Management, Target Management and Structure Management positively impacts Process Management of LCCS project, which in turn positively drives the Performance of LCCS project. We also find that LCCS project's Strategic Alignment positively impacts Skill Management, Target Management and Structure Management. Results from the analysis have implications for researchers and practitioners attempting to understand and improve the performance of LCCS projects.