Resumo

An emerging stream of literature in strategic management is dealing with the strategies of subsidiary managers of multinational enterprises. In recent years, it has been observed an increasing trend for firms to realize their strategic aspiration through outsourcing initiatives. Organizations have turned to local and international outsourcing to improve performance. They first started outsourcing part of their business to third-party providers but, thanks to the globalization process, some advanced activities have been outsourced in order to maintain or acquire further competitive advantages.

Strategic management of outsourcing can be the most powerful tool in management and the outsourcing of innovation is its frontier. What seems less clear is whether outsourcing will be done on a holistic basis or more opportunistically. Therefore, the research question is arose: The level of innovation influence the type of outsourced activity? The main objective of this paper is to analyze if there are relations between the global and local innovation regarding the outsourcing practices of basic and advanced activities, as a process innovation strategy.

Process innovations are central to improving a firm’s productivity and contributing to efficiency and gross domestic product growth. Innovation allows a company to stay competitive in the market. However, most corporate innovative processes may take long time, high cost, and more resources to be implemented. Innovation outsourcing can be an option for this matter, and it is described as any company that seeks external effort to support part of its work. This paper analyses the outsourcing of activities made by enterprises as process innovation in the local and global environment.

The approach adopted in this research is a quantitative character, through the use of primary data survey collection method. The sample is formed by 172 multinational companies’ subsidiaries located in Brazil. To test the hypotheses of the study, it was used the data analysis technique from structural equations modeling (SEM) estimated using Smart PLS software. These hypotheses are: Hypothesis 1: The local innovation is positively associated to outsourcing of basic activities. Hypothesis 2: The global innovation is positively related to outsourcing of advanced activities.

The results show that the local innovation is not associated with outsourcing basic activities, nor with advanced activities. However the global innovation has influence on both outsourcing of basic and advanced activities. Furthermore, the associations between local innovation and global innovation were significant, as the association between outsourcing basic and advanced activities as well. So, these two not proposed but tested associations seem to walk together when they are recognized as a following step of one another.

This study intended to show that the level of innovation used by companies can influence the outsourcing of basic or advanced activities as a process innovation strategy. Organizations have turned to local and international outsourcing to improve their accomplishments. Therefore, the main contribution of this study is to make the correlation between the level of innovation (local or global) with the type of outsourced activities (basic or advanced). Looking to outsourcing of basic and advanced activities as process innovation can enable firms to gain business performance.

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