COLLABORATION ACROSS DISTRIBUTED SITES: APPLYING WORLD-SYSTEM THEORY TO GLOBALLY-INTEGRATED WORK

First Information Systems Workshop on Global Sourcing: Services, Knowledge and Innovation Val d'Isère, France 13-15 March 2007

JIT 06-191

COLLABORATION ACROSS DISTRIBUTED SITES:

APPLYING WORLD-SYSTEM THEORY TO GLOBALLY-INTEGRATED WORK

Gary C. David1,*

E-mail: [email protected]

João Resende-Santos1


Donald Chand1

E:mail: [email protected]

Sue Newell1


1Bentley College

175 Forest Street

Waltham, MA 02452

USA

* Corresponding author

mailto:[email protected]




COLLABORATION ACROSS DISTRIBUTED SITES:

APPLYING WORLD-SYSTEM THEORY TO GLOBALLY-INTEGRATED WORK

ABSTRACT

The primary challenge of globally distributed work is minimizing the perceived social distance

such that people at distributed sites who might never meet one another can work together in a

collaborative way. This paper draws from World Systems Theory, originally developed by

Immauel Wallerstein (1974), to examine how the model of core and periphery can be used to

understand the structural impediments to developing these collaborative relationships. We use

this framework to examine the distributed site relationships in an IT/IS company which we refer

to as GLOBALIS. The paper demonstrates that national boundaries should not be considered as

the primary unit of analysis. Rather, it is important to look at all of the distributed sites in

relation to the central site, and how the arrangement of these locations within a global politico-

organizational framework can inform our understanding of the social relationships that emerge in

and through the work they do. By changing the unit of analysis from the specific sites to the

entire system, the paper provides a new approach to examining globally-distributed collaborative

work.

Keywords: World Systems Theory, Global Collaboration, Offshoring, Virtual Communities

INTRODUCTION

Companies trying to address the challenges of managing globally-distributed sites and teams

primarily have done so through an array of information and communication technologies (ICTs).

Increasingly, however, companies are coming to the realization that an advanced technological

infrastructure is only part of the equation leading to globally-distributed success. Another equally

(or perhaps more) important factor is the managing of social dynamics across sites. The “social

side” of distributed work perhaps is not a new realization. However, the question of social

dynamics generally is framed through the lens of cultural difference. Attempts to address cultural

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“issues” thus take the form of cultural training aimed at increasing an awareness of difference

and appreciation of diversity. While well-intended as a pro-active measure by management, such

an approach has two negative consequences. First, such training programs can give rise to

sophisticated stereotypes (Osland, Bird et al. 2000), which results in the reification of

stereotypical views through the presentation of materials underlining differences between

national groups. These sophisticated stereotypes thereby become the framing mechanisms

through which all group-based work is viewed and interpreted.

Second, by focusing attention on national boundaries, national boundaries becomes the most

salient factor framing the relationship. As a result, the sense is created that sites are separate and

discrete entities. In other words, by talking about the characteristics of the national cultures of

each site, people start to see these sites as stand-alone units whose behaviors and attitudes are

reducible to the units themselves. What this view misses is the importance of dynamics that

occur between sites, which in the end create a globally-distributed system of workplace

relationships.

Rather than focus on the individual sites as the unit of analysis, this paper argues for a re-

orientation to see the unit of analysis as the distributed organization itself. To conduct this

analysis, this paper draws from World Systems Theory, originated by Immauel Wallerstein

(1974). While Wallerstein’s approach focused primarily on the historical global economic and

social relationships among regions of the world within the structure of capitalism, this paper

demonstrates the applicability of this perspective to understanding the emergent social and

political relationships among globally-distributed sites within the same organization.

We use this framework to examine the distributed site relationships in an IT/IS company referred

to as GLOBALIS (for “Global IS”) in the rest of the paper. Based on the basic elements of

world-systems theory, we see a number of potential applications of the theory to the emergence

of globally-distributed IT/IS teams who are supposed to work in an integrated and collaborative

fashion. It is important here to emphasize that our analysis is directed toward organizations that

are constructing their own distributed solution centers, rather than relying on third-party vendors.

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Third-party vendors by their very nature are on the periphery of the client organization. Their

role is not to become integrated to the point of complete inclusion into the client company.

Another important difference is the extent to which interactions among persons at the different

sites are mediated by a bridge team, or a group of workers who are employed by the third-party

vendor but are located in the client’s site. The role of this bridge team is to be the interface

between the workers at the client and vendor sites, thus playing the role of social brokers or

mediators. The integrated distribution model aims to have workers across site, but in the same

organization, work directly with one another as if they were located at the same site.

The paper demonstrates that national boundaries, while having some implication for social

relationships between sites, should not be considered as the primary unit of analysis. Rather, it is

important to look at all of the distributed sites in relation to the central site, and how the

arrangement of these locations within a global politico-organizational framework can inform our

understanding of the social relationships that emerge in and through the work that they do. By

changing the unit of analysis from the specific sites to the entire system, the paper provides a

new approach to examining globally-distributed collaborative work.

AN OVERVIEW OF WORLD SYSTEMS THEORY

This section provides a brief synopsis of world-systems analysis as formulated in political

science and historical sociology (see Wallerstein, 1974, 2005; Evans, 1979; Skocpol, 1977). The

discussion here also offers a brief summary of dependency theory which, like world-systems

theory, draws intellectual inspiration from Marxism and shares many of the same central

concepts. It is important to note, however, that there are different versions of world-systems

analysis and dependency theory. Wallerstein’s argument, as well as those who employ world-

systems theory, is exceedingly complex in its totality. We draw but one element from it: that in

order to fully understand the dynamic of collaboration within a distributed organization

(especially globally distributed organizations), you must treat the organization as a system rather

than focusing on the sites as discrete entities. Thus, we do not mean this analysis to be support

for or a refutation of world-system theory as it has originally been developed. Rather, we draw

inspiration from it as a basis for understanding globally-distributed collaborative work.

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The Capitalist World-Economy as the Unit of Analysis

As Skocpol (1977:1075) notes, “Immanuel Wallerstein’s The Modern World-System aims to

achieve a clean conceptual break with theories of ‘modernization’ and thus provide a new

theoretical paradigm to guide our investigations of the emergence and development of

capitalism, industrialism, and nation states.” World-systems theory borrows liberally from

dependency theory, its precursor originally formulated by Latin American sociologists and

historians in the early 1960s. Dependency theory was a kind of “protest” theory against the so-

called “modernization” theory of economic development dominant at the time. Dependistas

argued that “national” development cannot be understood without reference to the global

capitalist system of unequal exchange and exploitation. They too saw the world economy

functionally differentiated into core, semi-periphery, and periphery, each playing specified

functions and arranged hierarchically. The periphery was condemned to low cost, primary

materials production, which they sold to the core in return for high value added manufactured

goods. The long term (detrimental) consequences were obvious.

There are two foundational ideas in world-systems analysis that facilitate understanding of the

argument. The first is that world-systems analysis treats the entire world as a single (and the only

important) unit of analysis (thus the hyphen). The world-system is a self-contained social system,

with its own internal logic, mode of operation, unified and complete division of labor, and

internal exchange. Or, as Janowitz (1977:1091) observes in his analysis of Wallerstein, in world-

systems theory “it is necessary to analyze change in terms of the relations among nations, that is,

the ‘social system’ that is created by the linkages among nations.” An understanding of the

development of capitalism, industrialism, and even national-states is possible only by

considering these within the framework and operation of the world-system.

This is the theory’s first dissent from mainstream social science disciplines (political science,

economics, sociology, history), which it considers too wedded to individual states, societies, and

“national” economies. The capitalist world-economy can be treated an integrated system, a

whole, because it has a single division of labor. The world-economy is one large geographic

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zone with a single division of labor and internal exchange. The world-economy consists of

multiple polities and cultures. Yet it is a world-economy whose pillar institutions and division of

labor are driven by, and serve the ends of, international capitalism.

The second key idea in world-systems analysis refers to the system’s single division of labor.

Namely, the world-economy is functionally and hierarchically separated into core, periphery,

and semi-periphery. The world-economy is a hierarchy; a politico-economic hierarchy of power

and rewards. Each of the three sub-strata, or geo-political zones, plays a defined economic-

political role in the world-economy and the internal exchange. In common understanding of

world-system analysis, core, semi-periphery and periphery have been associated with countries,

ranked according to their economic-military weight. Thus, the rich and developed countries (US,

Europe, Japan) are viewed as the core, and the Third World the periphery.

Wallerstein cautions that the concepts of core and periphery, however, more properly refer to

production processes, not countries. To be sure, in each category of production function, or

location in the division of labor, in the world-economy, we find countries (states) occupying

those positions. But since production processes change and shift as a result of technology, it is

better to associate core and periphery with production. Thus, some countries occupy a location of

core-like production, or periphery-like production, etc. Put differently, countries can move up or

down the ladder; they can change positions over time. Profitability and level of technological

innovation define, or determine, type of production -- and its location. Core-like production are

highly profitable, involve new technologies, innovation, etc. For Wallerstein, core production --

better yet, profitability -- is determined by level of monopolization. Thus, core production is

characterized by quasi-monopolies. And the core maintains tight grip on the technological

innovation. Only after production becomes less profitable, does the production (technology) shift

to the periphery. Periphery production is, in contrast, characterized by free markets (low profits,

high competition).

A System of Unequal Exchange

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World-systems analysis is distinguished from mainstream theories of world politics and

international economics by its hallmark argument about the relationship between core and

periphery. Namely, the world-economy involves a process, or relationship, of unequal exchange

between core and periphery. The core produces and sells its higher value added, technology-

intensive products to the periphery, in exchange for the periphery’s lower value added goods.

The outcome is one where surplus value is transferred from the periphery to the core.

Furthermore, world-systems analysis claims that there is a direct inverse relationship between the

development of the core and periphery: the core’s development comes at the expense of, and

requires, the underdevelopment of the periphery. That is, the periphery’s structural role is to

provide for the development of the core. This creates a type of zero-sum game, where the gains

of one comes with the loss of the other. In this system, it is not possible for both to gain equally

or lose equally.

Core production is based on advanced technology and constant innovations. The core maintains

tight control over its leading edge technologies, however, and prevents its transfer to the

periphery. Leading technology gives the core its advantageous position of surplus appropriation

in the world-economy. It allows the core to become the “workshop” for the world, producing

high value added goods for the world market. Here Wallerstein appears to rely exclusively on

economic rationale for the core’s tight grip on its technology; the core has built-in profit

incentives to do so. More broadly, core production thus resembles quasi-monopolies -- protected

by a host of “legal” and institutional instruments (patents, political favors, etc). Each of the three

main zones of production in the world-economy has its own form of labor control -- skilled wage

labor in the core, share-cropping in the semi-periphery, and slave or forced labor in the periphery

in the early stages of its evolution.

Technological Diffusion in World-System Theory

World-systems analysis and dependency theory share with some mainstream neoclassical

economic theory the idea that production (technology) has cycles. The most familiar works in

neoclassical economic theory in this area is called the product life cycle theory, closely identified

with the works of Ray Vernon (1966, 1979). To simplify, products go through three stages:

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1. Products (new technologies) are invented, produced and sold in the core;

2. Products are produced in the core, and sold in the periphery;

3. Products are produced and sold in the periphery.

However, the technology moves to the periphery only after it has become routinized, and savings

are possible only from cheap labor. For Wallerstein, a shift, or downgrading, does take place

over time, with production and technology moving to the periphery. That is, the quasi-

monopolies of the core become “self-liquidating;” they exhaust themselves, and their

profitability drops. Thus, production moves to the semi-periphery, and eventually to the

periphery in search of cost-savings from cheap labor.

In this process, the MNC’s position is guaranteed by: a) its quasi-monopoly status; b) its ability

to produce new products that no one else is producing; and c) monopolizing some new

technology or process. Thus, even though MNCs are global in operations and even production,

they keep the innovative side of the business at home in the core. New technologies, new

processes will not be relocated to the periphery. Secondly, though global in scope of activities,

strategic decision making is made in the core, not periphery. Local managers in the MNC’s

periphery production may be allowed to make operational decisions, but real decision making

power is reserved in the core (headquarters). In general, the MNC will gravitate toward

production and technologies designed for the core, and focus on low return, routine kinds of

production in the periphery.

World-systems analysis borrows from Marx the notion that political power serves and protects

economic interests. But it adds a twist. Note that Wallerstein is arguing that there is a single

capitalist world-economy, but it is also a social system that contains multiple “institutions” (i.e.,

national states) and cultural systems. Political power serves the needs of international capitalism.

Specifically, the international division of labor, including its system of unequal exchange and

expropriation, is maintained by political power -- by armies, international “rules,” etc.

Wallerstein argues that the evolution of the world-economy into core and periphery is paralleled

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by the emergence of strong and weak states, or state machineries. In sum, the differential

strength of states in the world-economy is crucial to the operation of the system (unequal

exchange), and crucial to the protection of the interests of the dominant classes.

The first point we want to draw from world-systems theory is its attention to the world-system as

the social system of analysis. In terms of what defines a world-system, we expand beyond the

political and economic definition of Wallerstein to the definition provided by Chase-Dunn and

Hall (1993:856), who state “We use the term world-system to refer to the actual social context in

which people live and the material networks that are important for everyday life.” They go on to

say, “The main issues regarding the world-system are the types of interaction, the frequency of

interaction that constitutes systemness, and the distances over which interactions have important

consequences” (p.859). In this way, a world-system approach to offshore development focuses

on the nature of relationships across the solution centers that are created in and through the daily

interactions between personnel at all levels of the organization. Also, distance matters no matter

the location of the sites (Olson and Olson, 2000). Thus, even though a site is located within the

US, it still may have a “peripheral” relationship with the core site(s).

This relates to the second point that is drawn from world-systems theory: the concept of core,

periphery, and semi-periphery. In terms of technological sophistication, “Core countries

monopolize high-tech, high profit enterprises” (McCormick, 1990:126), while the periphery

countries are underdeveloped. Another important point to consider is the extent to which the core

maintains control of technology up until the point that the technology becomes routinized. It is

at this point that new technologies might be transferred, made possible by advances in

technology, to the periphery in order to take advantage of the cheaper labor markets.

While it makes little sense for companies to limit technological infrastructure for their distributed

sites, technological sophistication is not the only element that determines where a site is located

in the production chain. It is not the technology itself, but how the technology is used or allowed

to be used. For example, any word processor can be used to create a unique work of literature, or

conversely used to transcribe the work of someone else without any changes. Furthermore, even

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though information technology may be meant to allow for the sharing of knowledge across an

organization, there is no guarantee that this will happen. Thus, while information sharing “is

based on electronic communication technologies, but it is not the technologies themselves which

count: what matters is the implementation of these technologies as culturally specific

accomplished social actions” (Knorr Cetina and Bruegger, 2001: 181). It is this point that we

examine in the following sections.

METHODOLOGY

Our study site, called GLOBALIS, is the IS organization of a large firm in the financial sector.

Its headquarters is in Boston, MA with multiple solution centers in the New England region.

Almost 15 years ago GLOBALIS established solution centers in Texas and Utah, and has had

two solution centers in Ireland for the last 10 years. Three years ago it launched its first solution

center near New Dehli, India and a year and a half ago began a full-services solution center in

Bangalore. Although GLOBALIS has considerable experience in establishing geographically

distributed solution centers and is well aware of industry’s best practices for dealing with issues

and problems of geographic dispersion, e.g., distance and time zone differences, cultural

differences, loss of communication richness, etc., its leadership is interested in gaining a better

understanding of how its workers engage in globally distributed collaborative work.

The project involved a multi-layered data collection process in order to develop a multi-

dimensional view of the projects and the subjects of the study. Over the past three years, our

team began observing the development of the GLOBALIS global delivery process in order to

provide GLOBALIS management an understanding of how its global workforce collaborates.

For the past twelve months our research team has been performing an ethnographic analysis of

four project teams using a workplace studies paradigm (see Luff, et al., 2000). This included

interviews, site visits, observations of video conference and conference calls, and frequent

discussions with and presentations to GLOBALIS personnel regarding the team’s findings. Thus,

the project was carried out in a quasi-Participatory Action Research (see Whyte 1990)

framework in that it was hoped that the findings of the project would be beneficial to workers,

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management, and the organizations in terms of developing better relationships among distributed

personnel resulting in higher quality work and a better global strategy.

Interviews were conducted with personnel at all levels of the project. These interviews occurred

in both individual and group format and most of the interviews happened in person. These

interviews were not tape recorded, but individual notes were kept by research team members

present for the interviews. These separate notes were then discussed and compared. These

interviews were semi-structured and conversational in nature, and they covered a range of topics

related to GLOBALIS, such as:

1. How project success is viewed and defined;

2. A comparison of planned use versus actual use of standardized software

development and project management processes;

3. How communication and information technologies are used;

4. What are the knowledge transfer and knowledge sharing processes;

5. What are the key challenges and how those challenges are addressed;

6. What, if any, are the processes to encourage the formation of social and personal

relationship.

Each interview lasted approximately one hour in length, and overall over forty organizational

employees were interviewed.

In order to get a more fully developed sense of the worksites, we made repeated visits to the

onshore and offshore sites associated with the project. During these visits, we also observed the

nature of the work associated with the project, especially meetings and other situations where

people from the various sites interact with one another. The Ireland sites were visited in 2003 for

one week, and again in 2006 for another week. The India sites were visited over ten days in

2006. During the course of the project, the sites in the New England area were visited

intermittently in order to attend meetings, conduct interviews, and deliver reports. No other sites

in the US were visited.

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GLOBALIS IN THE WORLD-SYSTEM CONTEXT

GLOBALIS likes to speak of developing a global workplace community in which each member

can contribute on equal footing. Toward this end, the company has tried to develop a global

delivery system meant to structure the integration of their distributed sites. Company

management also has tried to achieve a similar feel of the distributed sites by having similar

paint colors on the walls, floor layouts, company symbols, etc. As company executives have

repeatedly said to company personnel, “You can be in Bangalore and you could think that you

are in Boston.” This, of course, is not entirely true, but it speaks to the attempts of the company

to develop a unified workplace at least in appearance.

GLOBALIS has tried to use this “one company” approach to overcome its lack of name

recognition in the global marketplace. While GLOBALIS is very well-known in the US, it is less

recognizable overseas. This has created difficulties in GLOBALIS attracting talent to its

organization, especially since well-known companies like Sun Microsystems, Microsoft, IBM,

and the like are able to leverage their name to draw those who are looking to add such luminaries

to their resumes. To combat this, GLOBALIS has tried to sell itself to potential hires as a place

in which they will be working on complex projects, will develop their skills, and can build their

careers within the organization. The organization also tries to promote contributions by

distributed site personnel by promoting a team concept in the distributed projects. This means

actively working against a vendor-client mentality between the sites in which the distributed

locations see themselves as serving the central location.

At the same time, despite these explicit statements there are many subtle messages sent by the

organization and its personnel regarding how the distributed sites fit into the larger global

system. In the end, it is these messages that speak louder to workers and managers than the

proclamations of the organization and its leaders. Furthermore, it is these message and action that

create the core/periphery perception within the organization.

Ultimately, if the goal of an organization is to leverage the advantages of a distributed

workforce, it is important that their global strategy and the implementation of it allow for this to

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emerge through the development of its sites. In the next section, we discuss how the case of

GLOBALIS fits into this model, as well as how other globally-distributed organizations can be

viewed. We do this by provided a series of vignettes meant to illustrate these points. These

vignettes are based on our conversations with GLOBALIS personnel at a variety of

organizational levels, written and oral presentations to GLOBALIS management, and

observations of the workplaces during our sites visits.

Asymmetrical Interactions through Communication Technologies

GLOBALIS does not follow the third-party vendor model, opting to try and create a type of

integrated distribution. Thus, the work at GLOBALIS is not always modularized within sites,

meaning that pieces of a project are not done at individual sites with the final assembly being

done somewhere else (as can occur in manufacturing processes). This creates the need for

constant communication and coordination among the distributed sites. Thus, there is the

expectation that persons from different sites in essence will be working together to complete a

project. The use of information and communication technologies was meant to provide an

opportunity for distributed personnel to engage in a meaningful way in the conducting of work at

GLOBALIS. While the goal of the technology is to allow for team-based collaboration, but as

our observations indicated, this is not always the case. We refer to this issue generally as creating

“asymmetrical interactions”, meaning that the situated conditions of the encounters, as well as

the way in which the encounters are carried out, are not the same for everyone.

This was most clearly demonstrated in the regular video and tele-conferences held at

GLOBALIS. During our project we were able to observe video conference calls that took place

between all the sites. The most obvious asymmetry is the time at which the calls took place.

While much has been made of the time zone differences, not much has been discussed in terms

of the impact of being at different parts of one’s day has on the ability to work in an integrative

manner. For the most part, our location for these meetings was the main GLOBALIS office in

Boston. The meetings took place 8:00am Eastern Standard Time, which meant that it was

1:00pm in Ireland and 7:00pm in India. More importantly, this would mean that it was 7:00am in

Texas and 6:00am in Utah. This meant that while the people in the Eastern Standard Time zone

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were are the beginning of their normal work day, people in Utah would have just woken up.

Likewise, personnel in India would have to stay at work later than they typically would on a

normal workday. While seemingly a minor inconvenience, this is an initial item that contributes

to what ends up being a series of asymmetries.

While the meetings we attended were meant to provide a general report on employee allocations

and project status, they would become a more open discussion of future directions, strategies,

and project possibilities. We found that a shift took place during these moments. During the

report phase of the meetings, people at the distributed sites would report on the status and

progress of their projects. This often would be accompanied with papers that were previously

distributed to everyone in attendance. The person running the meeting from the Boston office

would call on people to begin their presentations. Typically speaking, people at the Boston site

would interrupt the presentations of the personnel at distributed sites to ask questions or ask for

clarification. In this way, conversational turns were dominated by the Boston site, creating

another asymmetry.

Furthermore, whenever the conversations would transition to become brainstorming sessions, the

conversation would generally center on the room in Boston, where around ten people would be

seated. While the other sites could hear and see what was going on, they were by no means able

to engage in these conversations as easily as people in the Boston site. Conversational turns

would be exchanged within the Boston location, with gaze being directed at those people who

were seated at the table. Thus, the people at the distributed sites were not as able to engage in

these important discussions as they occurred, but would have to pick up on these themes “off-

line”, which means after the meeting had taken place and through some other communication

medium.

We also had the occasion to witness video conferences from sites outside of the central site, once

from Ireland and once from India. Both instances revealed interesting patterns of communication

that were occurring underneath the primary interaction of the meeting. For instance, during our

observations in Ireland, we were able to witness personnel in Ireland text-messaging an Irish

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colleague who happened to be at the core site when this meeting occurred. While the meeting

was taking place, this “subversive” communication was occurring simultaneously. When we

relayed this story to other people in the organization who worked at distributed sites, they told us

that they routinely engage in this type of activity to send messages to another “under the radar”

so to speak. Also, while the meeting is taking place people at the distributed sites often will put

their speakers on “mute” in order to avoid being heard by the site in Boston (or any other site for

that matter). This allows people to talk about a topic without the content being available for

everyone at the meeting. The core site, of course, does not have this luxury as it is the site that is

“driving” the meeting and is responsible for the business of the meeting being accomplished.

Finally, our observations of the India site demonstrated that, despite the communication

technology, much of the information was not getting through to the people in the India office.

Anecdotally speaking, about 40-50 percent of what was said during the brainstorming moments

of the meeting was picked up on by the India site. Beyond that, the Indian personnel were not

able to enter into the conversational stream as well as people who were co-located in the central

site. Thus, the video conference was good for basic reporting of organizational activity, but when

it became more of an open-ended conversation about important directions for the organization,

the distributed sites were at a disadvantage.

Distribution of “Knowledges” in GLOBALIS

The results of our study indicate that there are four areas of knowledge and that in each case this

knowledge is distributed hierarchically, limiting the extent to which the organization can achieve

its goal of being an integrated organization. In today’s organization, knowledge is the new capital

and primary resource. The lack of knowledge in the distributed “periphery” sites in each of these

areas means their development in the production chain will be impeded. By the “core” site

maintaining their ownership of these types of knowledge, they in essence will be able to maintain

their own monopoly over the production process. We do not mean knowledge in an abstract

sense. Rather, we refer to knowledge in the following ways:

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1) Domain knowledge refers to knowledge of the functionality of the system and the context

in which the system being designed will be used. Programmers are not typically subject

matter experts, and the further the team member is away from the context of use, the more

difficult it will be for them to function in an autonomous way.

2) Product knowledge refers to the knowledge associated with a system or product that

develops over time. Newly opened solution centers will be staffed with personnel who may

not have any previous experience working with a particular product, thereby putting them at

a disadvantage vis-à-vis those team members at other sites who have experience. Thus, these

new personnel may not be able to put forward recommendations as effectively, and may not

be familiar with opportunities for innovation, both of which can be the sole domain of those

at the core site.

3) Organizational process knowledge refers to knowledge of the processes and/or

methodologies employed in the organization for the production cycle. Because of this lack of

knowledge, workers at newly developed solution centers have to spend much of their time

learning “how things are explicitly supposed to be done.” Again, this can hinder their

individual and site development.

4) Network knowledge refers to knowledge of the social and expertise networks. Knowing

who to contact is fundamentally important in any organizational context since it is rare that

an individual will have access to all the knowledge needed to complete assigned work tasks.

If a site that has these types of knowledge can retain it, or at least impede its dissemination, then

it will be at a decided advantage relative to sites that do not possess it. In this way, knowledge

can be the resource that determines the ability of sites to develop, and contributes to a

hierarchical distributed workplace.

In many ways, the distributed sites are at a structural disadvantage when it comes to the

possession of the requisite “knowledges” to facilitate the development of their sites. Part of this

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disadvantage is based on factors outside of individual control, while another part is related to

unwillingness to knowledge share with the distributed sites. This problem is increased when

considering the offshore sites versus the onshore distributed sites.

In terms of domain knowledge, the sites outside of the US can be disadvantaged by a lack of

understanding of the context in which the applications and products they work on will be used.

In typical offshore outsourcing arrangements, offshore workers generally are not familiar with

the vertical / application domains, technical platforms and technology environments, standards,

and work culture of the customer/client firm. But in an offshoring model such as the one

employed by GLOBALIS, we found that the quality management process and expectations,

development standards knowledge and company culture knowledge was diffused across all its

distributed sites. Yet, transfer of application domain knowledge and systems knowledge

remained problematic.

1) Domain Knowledge Transfer

While the transfer of knowledge generally is thought to be a technology issue (e.g. more

bandwidth equals better collaboration), it became clear during our research that it is more of a

relationship and experience issue. For example, one of the four projects we tracked was a nine

months long human resources and payroll application project that GLOBALIS developed for an

external customer. It was the largest projected attempted by GLOBALIS. The business analysts

and systems testers were located at a site outside of Boston, the project management and half of

the development team resided in one of the Ireland sites, and the other half of the development

team was recruited and located in Bangalore, India. The Irish team has prior domain knowledge

on the project, and understood the requirements of the project quite well. The Indian employees,

many of whom were new to the organization (and some new workers in the field) had no domain

knowledge. Thus, the issue of transferring knowledge and building up the Indian team’s

capacities became a paramount issue. Despite this challenge, the project was successfully

completed on time and within budget, and exceeded the quality standards of GLOBALIS.

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A major component of the project was to focus on the interpersonal skills of the team members,

and attention to relationship development across the sites. During an interview with the Irish

management team of the project, we were told how they conducted interviews with prospective

Indian team members using conference calls. Besides the obvious issue of distance, the other

main reason for doing so was to ascertain the person’s ability to interact through technology.

People that were found to be “easy to talk to” over the phone were rated higher than those who

were not. In fact, when asked what they rated higher, technological competence or interactional

competence, the management team said they would rather have someone who could talk easily

with others because the technological competence could be taught more easily. The managers

also initiated a rotating buddy system where workers at the distributed sites in Ireland and India

would be teamed together to get to know each other. Thus, the project was rooted in a type of

virtual workplace community. This community allowed for the development team in Ireland to

transfer their domain knowledge more easily to their Indian counterparts, who had no prior

domain knowledge. This provided an interesting example of how shared knowledge within a

virtual workplace community could provide very positive results.

2) Organizational and Product Knowledge Gap

While the previous exampple shows how a relationship-based integrated environment can help

contribute to collaborative work, there were more examples of how the distributed sites were

disadvantaged when working with the central sites. For developers, it can be very important to

understand how an organizational process works in order to build software systems that support

this processes. This leads to one of the main problems identified in the software development

literature: that IT people do not understand the business processes they are developing software

to support so that the requirements analysis is flawed, meaning the system will be poorly

designed.

We found that the employees at the distributed sites are particularly disadvantaged in this respect

as they have no contact with the actual users of the software, except through intermediaries

typically based at HQ. We had numerous interviewees at the Ireland and India sites telling us

about their frustrations in not really understanding the underlying business processes that they

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were supposedly working on. This is exacerbated by the fact that the company’s products are not

available in either India or Ireland so that these employees remain largely ignorant even of the

final product that they are developing software to support. People who we interviewed at the

main site told us that people at the distributed sites only needed to know the part of the project

that they were working on to do their job effectively. However, people at the distributed sites

said that it would be helpful if they could fully understand the context in which the product

would be used.

This gap in organizational process knowledge was exacerbated by how new the distributed

workers generally were in the GLOBALIS organization itself. Workers who are newly hired into

the organization are also at a disadvantage in terms of not having the detailed familiarity with the

products on which they are working. This can lead to an inhibition in terms of offering

suggestions or modifications to the product. In situations where there is a new team member, this

problem can be diffused since other team members can have the necessary experience to engage

constructively on the product. However, since the Indian sites are much more recent than the

other sites, this can be a wide-spread problem there. In tracking another project, we saw the

impact of this incongruence first-hand. In our discussions with team members in India, one team

in particular was tasked with working on a product that was approximately 10 years in

development. Some of the persons with which they working had been engaged with this product

from its inception, giving the sense that the product was like one of their children. The Indian

team members were hesitant to critique the product for the same reasons that one might be

hesitant to critique the performance of another person’s child. Beyond this hesitancy was a

general lack of familiarity with the product and the intricacies of the code. Together, this meant

that the persons at the Indian site in particular were not able to engage in the production of the

product in the same way was others on the team.

3) Network Knowledge Gap

Related to all of this is the importance of network knowledge in the production process. Any new

hire or new person to a project team is at a disadvantage in terms of knowledge. However,

having the necessary networks in place to fill these knowledge gaps can allow for the person to

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quickly develop into a more competent member of the team. A lack of these networks likewise

can impede development. This can be compounded when a site lacks access to these networks, as

we have seen with some of the distributed sites in GLOBALIS.

In one situation, we heard from Irish workers that they had difficulty contacting their American

counterparts in the New England area because an unwillingness to answer their phone calls or

emails. All workers had a “caller ID” function that showed who was making the call. If the call

was international in origin, workers would not answer. The workers in Ireland then used other

relationships with American workers to circumvent this obstacle. They literally had to call the

American workers that they knew (had a network with) ask them to transfer their calls to the

other American workers who would not pick up the phone in order to make contact. A similar

strategy was used by Indian employees. When they were not able to raise their American

counterparts in the New England area on the phone, they would call Irish workers with whom

they had a relationship and ask them if they had the needed information. Generally speaking,

workers at the distributed sites (especially those outside of the New England corridor) relied on

each other to fill network gaps, creating a network of support among “periphery” sites.

Another aspect of network knowledge is not knowing when to call. An example of this involves

a set of instructions given to an Indian team being managed from a site in the US. The project

manager told his Indian workers “Call me at anytime if anything happens.” To an inexperienced

and uncertain team member, such instructions are extremely vague, with no concrete sense of

what constitutes “anything happens.” Also, while “anytime” seems to denote the person can be

contacted at any moment in a day, whether a person can be awoken from a sleep, for instance, is

dependent on the severity of the “anything” that “happened.” Thus, determinations of major and

minor “anythings” must be made such that one can feel it is appropriate to call at anytime. When

the fact that there is little trust between the workers is factored in, this can be an extremely

difficult exercise for offshore personnel. Related to this is a lack of knowledge of who to call.

Even though coverage can be explicitly provided in terms of a call list, other informal networks

are useful to find the needed information for a particular problem. Workers, especially recently

hired ones, might be hesitant to contact their project managers with a question or problem in fear

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of creating a sense of incompetence. If alternative networks are available, the workers can get the

required information without putting their reputations at risk. Not having those knowledge

networks puts workers at sites outside of the main location at a disadvantage in terms of

development.

Network knowledge then becomes important as a requirement for one to perform one’s task in a

manner that can be seen as competent. Not having access to these networks impedes

performance. Furthermore, distance is a barrier to forming these relationships because it is not

only through work that relationships are developed. The spaces before and after meetings,

walking to and from the building, standing in an elevator, sitting in the lunch room, hearing idle

chatter, etc. all provide opportunities to develop personal relationships, which can then transform

into professional networks. Not having the opportunity to develop these networks means that

workers, and indeed sites, can remain on the outside looking in.

Task Complexity, Project Ownership and Routinization of Work

One of the major complaints from persons at the offshore distributed sites was the level of

complexity of the tasks they were given was relatively low. From the perspective of team

members in Ireland and India, there was a perception that they were only given work that their

US colleagues did not want (i.e., very low level, mundane work) or work that was problematic in

some sense. For example, the first project to be owned by a team in Ireland was a security

project. The researchers were told by team members that when they first took the project over,

there were significant problems with the project as the clients were not at all happy with the

service that was being delivered. In this case they nevertheless managed to turn the project

around and improve customer satisfaction by putting in a tremendous effort to build a center of

excellence around security knowledge. It was then assumed that all future security work would

come to Ireland.

However, the COO of the Irish organization recalled how he had been dismayed recently when

he had found that some new security work had been assigned to a team in a US location, rather

than to the Ireland office. This deepened the sense of “otherness” by creating the perception that

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distributed sites only receive the “low hanging fruit” or “grunt work” that American workers did

not want. There was the sense among the Irish workers that as long as work was either not

wanted by the American sites, or was in such disarray that it was a no lose proposition,

ownership of projects could be sent overseas. However, once that work stabilized and was

wanted by the American sites, it could be brought back. This feeling of only being worthy of low

level and low skill work decreased worker satisfaction and commitment in the off-shore sites.

Within the organization, we were told repeatedly that personal relationships were important in

the decision regarding not only where work was sent, but also where the project was “owned.”

Sometimes this was referred to as “politics,” meaning that backchannels were used to influence

the decision making process (thus giving the practice a negative connotation). Other times the

phrase “personal relationships” was used, meaning that the movement of work is facilitated by

prior knowledge and trust (giving the practice a positive connotation). It was very difficult to

ascertain the extent to which these claims affect the distribution of work. Regardless, we heard

this point enough to notice the impact it can have on the global working relationship.

Essentially, the sense that work is driven by factors that are surreptitious is very divisive in the

global environment, undercutting attempts to develop a cohesive global workforce. We were told

that GLOBALIS as an organization is a competitive environment, where competition between

business units is encouraged. While competition brings with it certain advantages, there are also

a number of disadvantages associated with competition where the rules are perceived to shift on

the basis of connections. We were told repeatedly that the sites stand more to gain by working

together than against one another. At the same time, the culture of the organization can result in

the emergence of working against rather than working with. Of course, it is very difficult to

create a unified workforce when members of this workforce are working under the assumption

that they need to compete with one another.

Project Innovation, Accountability, and Blame

In our conversations with GLOBALIS personnel, problems that occurred in a project were

commonly framed in the context of the entire site. Thus, if a problem was perceived to occur at

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one of the Indian sites, “India” was said to be a problem. The same can be said for the other

distributed sites as well. The extent to which the other sites were seen to comprise a separate

“out-group” correlated to how the problems were framed and attributions made. Of course, this is

a two-way street, with the distributed sites seeing the central site as comprising its own out-

group. But, the ramifications for the distributed sites are much greater. In other words, power is

not evenly distributed such that failures will be handled in the same way no matter where they

occur. Given the importance for the distributed sites, especially the newer sites in India, to create

a positive image in terms of their competency, any attribution of blame assigned to the entire site

can be very detrimental to its development.

Furthermore, we were told that within the organization, “You are free to innovate and take risks,

as long as you don’t fail.” Such a philosophy is conducive to neither innovation nor risk taking

no matter where a person is situated geographically. However, the consequences of “failure” can

increase depending upon where a person is located. Important in this is how perceptions of a

group can affect the evaluation of their work. In our interviews with GLOBALIS personnel at

distributed sites, we were told that there was a hesitancy to take risks because of the potential

harm that could be done to the whole site. There was this sense of hesitancy at a variety of levels

in the organization. This created a type of conflict within persons. Namely, while they wanted to

innovate and show what they could do, they were concerned that any failures would be more

harshly met than if one was located in closer proximity to the main site. This was exacerbated by

the age and experience discrepancies that existed between sites, where the sites located in Ireland

and India were much younger and less experienced on average than the US sites.

Research on social attribution indicates that when people see each other as members of a shared

group (or in-group), they are more likely to extend the benefit of the doubt regarding any social

transgressions (see Pettigrew 1979). For instance, Taylor and Jaggi (1974) found that in-group

members evaluated the same behaviors very differently when committed by fellow in-group

members or by out-group members. Therefore, competency is not just about how well a job is

done; it is about how well a job is perceived to be done as well. The natural distinctions in a

distributed organization are based on the location with which one is affiliated. When these sites

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are located in another nation, the boundaries are seen as being more fixed and rigid. The more

different the site and nation is perceived to be, the larger the perceived social distance between

sites. This ultimately means that the gulf between sites, and as a result the ways in which

accountability and blame are formulated, become more drastic in terms of being based on group-

level perceptions.

CONCLUSION

In this paper, we have provided an overview of how world-systems theory can be applied to

offshore development within a single organization. In doing so, we have demonstrated that the

core/periphery model provides a new understanding into organizational dynamics and

performance in a globally-distributed yet integrated framework. The primary challenge of

globally distributed work is minimizing the perceived social distance such that people at

distributed sites who might never meet one another can work together in a collaborative way,

with all being part of the core. This is at odds with the prevailing conditions created by

contemporary globalization which are more likely, as in GLOBALIS, to consist of a core and

periphery. Some of the conditions that pull towards this core/periphery dynamic include the ways

that globalization of work can increase. Our case study showed an increased uncertainty and

unease among workers who reside in the location from where the work is moving, with the result

that these core workers develop tactics to hold on to their power by undermining their periphery

team-mates, for example by not answering their phone. Likewise, there is uncertainty and unease

among the distributed locations that are not close enough to “headquarters” to sustain the

personal relationships seen to be necessary to get work of an increasingly complex nature,

reinforcing their role as periphery workers. Thus, uncertainty and unease prevail in a globally

distributed work environment and fuel the core/periphery separation.

Also related to the core/periphery concept is the division of labor that can exist within an

organization. Colclough and Tolbert (1992:14) speak of a technical division of labor, where the

distribution of tasks within an organization “is contingent upon industrial structure and social

relations of production in which corporate leaders decide how and where the production process

will be organized.” They also discuss the social division of labor, which “consists of the

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segmentation of the labor force along racial, gender, and ethnic lines.” The less power a group

has within an organization, the less power they will have to ask for and receive higher skill tasks

and ownership over work. Like in world-system theory, development is not a process that sites

have equal access to; it can be a very uneven process based on unequal distribution of

opportunity. Riain (2000:206) notes, “Globalization is as much a political question as an

economic one, and the politics of globalization are particularly crucial given their implications

for local political possibilities.” We can see the potential for development of distributed sites to

be political as much as economic as well.

There is also the issue of ownership of resources as an element in defining core versus periphery,

as well as impacting development. Along with knowledge being a resource that can be owned, so

can customer relationships and projects be owned. For offshore sites, they get their task

assignments from those sites that are able to interact directly with the customer. Also, project

ownership often comes with customer relationships. In both ways, ownership of customer

relations and projects is an important component in developing the skills and expertise, as well as

organizational legitimacy, of a site. Most frequently, both customer relationships and projects are

owned by sites that can be considered to be the “core” while the “periphery” sites are those that

provide services to the core in the maintenance of relationships and projects.

Finally, sites can have different levels of accountability in terms of how much blame is assigned

for project difficulties and/or how conflicts are handled between sites. Again, this is similar to

the dynamics between nations within a world-systems context. Borg (1992:262) argued, “(1) that

the status of nations within the world-system at a particular time is correlated with the primary

strategy they use for conflict management and (2) that the strategy used may affect the nation’s

subsequent rank.” Likewise, we can look at how such problematic instances are handled within a

global organization to determine how the sites are positioned relative to one another. Or, to

paraphrase George Orwell, while all team members may be equal, some are more equal than

others. The result of this is that while culpability may be shared for project difficulties, blame

often is not.

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Managing interdependence reciprocally implies some give and take and learning from and

adapting to the ‘other’. This implies moving beyond a “multinational” model to a “transnational”

model of distributed work. Bartlett and Ghoshal (1988:66) describes a multinational company as

one that “operates as [a] decentralized federation of units”, versus a transnational company that

has “the ability to manage across national boundaries, retaining local flexibility while achieving

global integration.” This means organizations have to evolve their global strategies beyond a

subservient subsidiary structure to a collaborative structure that is integrated vertically as well as

horizontally. The very phrases of “on-shore” and “off-shore” underline the separation of the

organization into different groups. Furthermore, to achieve more effective productivity, these

distributed units need to counter a competitive impulse in order to achieve cooperation and

decrease social distance despite the presence of physical distance (Bettencourt, et al. 1992).

Ghoshal (2005) has challenged the “radical individualism” that has been the basis of

management decisions, whereby competition and individual attainment was assumed to be the

foundation for organizational success. Global organization likewise must challenge these

assumptions which can be counterproductive in achieving integrated distributed work.

In essence, for global companies to achieve transnational integration, there needs to exist an

opportunity for equal exchange and reciprocal relationships. Norms of reciprocity imply that we

are obligated to future repayments of favors, gifts, invitations etc. received from others

(Gouldner 1960). Anthropologist Marcel Mauss (1967) found that “primitive” societies establish

reciprocal social relations and solidarity through gift exchange. This is different from a straight-

forward exchange, based on a market transaction, since the returned favor is not explicitly

specified. Rather, the favor implies a diffuse, generalized obligation for reciprocity sometime in

the future. In other words, it is important that some act results in the production of an in kind

subsequent act. Encouraging such reciprocal relationships in a distributed setting will require

attention to the development of a social community, just as it does in face-to-face settings. Yet,

as we have seen, the technology can get in the way of the development of social cohesion (as in

the video conferences described above) and reinforce, rather than negate, the core/periphery

perceptions. This suggests that in a distributed setting more, rather than less, attention needs to

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be given to fostering social relationships and encouraging the ‘small talk’ that is automatic in

non-virtual settings.

More importantly, distributed sites, especially those located outside of the national boundaries of

the core site, need to be provided the opportunity to develop in order to cast-off their periphery

status. As this paper indicates, lack of development is not just a matter of site-based deficiencies,

although they undoubtedly contribute. Managers and researchers need to look at the world-

system dynamics within the organization, including the explicit organizational structure and tacit

messages that give rise to the dichotomization of sites into more developed and less developed

(core and periphery). Failure to do so will lead to a loss in productive capacity, worker morale,

and competitiveness in the global market. Future research needs to examine this model in more

case scenarios, as well as the impact of organizational interventions meant to bridge social

distance and establish global workplace communities, both in their virtual and face-to-face

forms. Despite the challenges demonstrated here, we have seen tremendous potential, and in

parts the realization of this potential, for the development of globally distributed collaborative

work where all are part of the core. It is vital that organizations contribute to, rather than impede,

this development.

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COLLABORATION ACROSS DISTRIBUTED SITES: APPLYING WORLD-SYSTEM THEORY TO GLOBALLY-INTEGRATED WORK

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