Offshoring, exit and voice: implications for organizational theory and practice

This paper seeks to explore the impact of corporate offshoring moves on the economic and psychological contracts between firms and their employees.

The paper draws upon literature from diverse social sciences to explore the phenomena of social contracts and offshoring. Especially deploying the exit‐voice theory of Alfred Hirschman, it is argued here that offshoring decreases the regenerative power promised both by exit and voice in helping organizations recover from decline.

Organizational systems and processes designed to deal with the “post‐offshoring worker” only serve to accentuate the sense of alienation felt by workers at the way they are regarded. This scenario poses a serious challenge to researchers and practitioners who need to make sense of these effects and deal with them accordingly.

This paper highlights, honors and legitimates everyday relations at the workplace on both sides of the offshoring divide, as sites of class struggle, of worker alienation, of intra‐organizational bargaining and, sometimes, of relations of imperialism and cultural dislocation. Understanding the complexity of this context and managing the actions arising out of this are important challenges facing the managers.