What is it about?

Companies from countries which suffer from terrorism and an adverse institutional country bias, connecting with international buyers and participating in global value chains is difficult. In this paper we look at the Pakistani IT industry to see what can be done to overcome country and institutional problems. What makes some of these companies perform well, against all odds?

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Why is it important?

Successful companies from adverse country contexts seem to pursue essentially two strategies, they either “step-up” their strategies of connecting with global value chain partners or the “break-out” and build up alternative connectivity capacity.

Perspectives

Pakistan suffered a significant adverse perception bias following terror attacks in 2008-09. For Pakistani software firms, securing and maintaining relations with foreign clients proved rather challenging. In this paper we identify stratgies that help firms secure and retain business. While these observations emerged from the Pakistan context, the implications of the resulting dynamic framework for theory and practice go beyond this particular adverse country setting.

Professor Rudolf R Sinkovics
University of Glasgow

Unlike manufacturing sectors, it is difficult to draw differences between production activities and design activities in software services sector. The client’s specific needs emerge through a process of communication between the software developer and the client. Therefore, it is important for the clients to continuously engage, discuss plans of action and ensure progress. However, when software development firms are operating under risk-prone conditions, they face challenges to developing effective coordination and communication channels that support relationship development with their existing clients. This is because travel to clients’ countries is frequently constrained through visa restrictions. At the same time, the fear of threat to physical security reduces the clients’ willingness to travel. In addition to convincing clients that they have sufficient capabilities to carry out their projects, software firms operating in risk-prone countries need to overcome the negative country image in terms of physical security. In this paper, we found two strategies at play that are helping firms secure and retain business, which we term as ‘step-up’ and ‘break-out. The step-up strategy involved firms acknowledging the issues clients may have when considering doing business with a Pakistan-based firm and working to mitigate or remove these concerns. This included adapting their working practices to align to the customers, improving client engagement to understand and respond quickly to their requirements to build trust quickly and using technology to host web conference calls to negate the need for staff to travel to the country or sort visas. Firms involved in a ‘break-out’ strategy OSPs’ desire to become independent and focus on the development of their own products once they had built up the necessary skills and financial capital. Both strategies require OSPs to have a strong focus on ensuring they understand the rules and conventions of the supply chain they are entering, rather than just working to their own internal, or national, working styles.

Dr Umair Shafi Choksy
University of Kent

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This page is a summary of: Knowledge Connectivity in an Adverse Context: Global Value Chains and Pakistani Offshore Service Providers, Management International Review, February 2019, Springer Science + Business Media, DOI: 10.1007/s11575-018-0372-0.
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