Diasporas and Outsourcing: Evidence from oDesk and India

Ejaz  Ghani; William R. Kerr; Christopher  Stanton

Article | Management Science | July 2014

Diasporas and Outsourcing: Evidence from oDesk and India

by Ejaz Ghani, William R. Kerr and Christopher Stanton

Abstract

This study examines the role of the Indian diaspora in the outsourcing of work to India. Our data are taken from oDesk, the world's largest online platform for outsourced contracts, where India is the largest country in terms of contract volume. We use an ethnic name procedure to identify ethnic Indian users of oDesk in other countries around the world. We find very clear evidence that diaspora-based links matter on oDesk, with ethnic Indians in other countries 32% (9 percentage points) more likely to choose a worker in India. Yet, the size of the Indian diaspora on oDesk and the timing of its effects make clear that the Indian diaspora was not a very important factor in India becoming the leading country on oDesk for fulfilling work. In fact, multiple pieces of evidence suggest that diaspora use of oDesk increases with familiarity of the platform, rather than a scenario where diaspora connections serve to navigate uncertain environments. We further show that diaspora-based contracts mainly serve to lower costs for the company contacts outsourcing the work, as the workers in India are paid about the market wage for their work. These results and other observations lead to the conclusion that diaspora connections continue to be important even as online platforms provide many of the features that diaspora networks historically provided (e.g., information about potential workers, monitoring, and reputation foundations).

Keywords: Diaspora; outsourcing; oDesk; Networks; Job Cuts and Outsourcing; Diasporas; Online Technology; Ethnicity; Service Industry; South Asia; India;

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Citation:

Ghani, Ejaz, William R. Kerr, and Christopher Stanton. "Diasporas and Outsourcing: Evidence from oDesk and India." Management Science 60, no. 7 (July 2014): 1677–1697.

What prevents the spread of information among coworkers, and which management practices facilitate workplace knowledge flows? We conducted a field experiment in a sales company, addressing these questions with three active treatments. (1) Encouraging workers to talk about their sales techniques with a randomly chosen partner during short meetings substantially lifted average sales revenue during and after the experiment. The largest gains occurred for those matched with high-performing coworkers. (2) Worker-pairs given incentives to increase joint output increased sales during the experiment but not afterward. (3) Worker-pairs given both treatments had little improvement above the meetings treatment alone. Managerial interventions providing structured opportunities for workers to initiate conversations with peers resulted in knowledge exchange; incentives based on joint output gains were neither necessary nor sufficient for knowledge transmission.

Case | HBS Case Collection | September 2019 (Revised December 2019)

Google: To TVC or Not to TVC?

William R. Kerr and Carl Kreitzberg

In late 2018, evidence emerged that many of Google’s temporary help agency workers, vendors, and independent contractors (“TVCs”) were unhappy with the company. TVCs, who reportedly made up 49.95% of Google’s 170,000 person global workforce, had raised concerns of mistreatment, citing instances of pay inequity, social exclusion, and physical endangerment. “Flexible” workers, such as TVCs, were often seen as a key cog for Silicon Valley’s IT companies: they made workforces scalable, they helped firms get access to specialized knowledge for temporary projects, and they boosted innovation by creating “knowledge spillovers” between firms. But, at the same time, many onlookers worried that flexible work arrangements were aggravating social inequality and making more jobs precarious. Google employees, major media outlets, and politicians demanded that the company change its policies on TVCs. One suggestion was that Google convert all of its TVCs to full-time status by early 2020. As tensions reportedly escalated between Google’s workforce and its management team, some began to wonder if Google was still an employer of choice.

Keywords: workforce; independent contractors; talent management; Silicon Valley; google; employee attitude; Employee compensation; employee engagement; future of work; innovation; innovation and strategy; inequality; talent acquisition; Labor; Talent and Talent Management; Strategy; Technological Innovation; Employees; Attitudes; Innovation and Management; Human Resources; Equality and Inequality; Information Technology Industry; United States; San Francisco;

Citation:

Kerr, William R., and Carl Kreitzberg. "Google: To TVC or Not to TVC?" Harvard Business School Case 820-048, September 2019. (Revised December 2019.) View Details

Cite View Details Educators

Facing threats to its growth, digital marketing and sales company Clear Link Technologies, LLC (Clearlink) decides to run a field experiment to test strategies for improving sales productivity. Designed in collaboration with a team of academic researchers, the study compares the efficacy of two interventions: incentives and management-directed peer learning. In addition to providing an introduction to the call center industry and an overview of some of the cultural factors that make experimentation challenging in a business organization, the case also provides basic information about experimental design. Instructors may use the case to introduce students to fundamental concepts such as control, randomization, statistical power, and minimum detectable effect size. Students will consider best practices for experimental design, build skills for analyzing experimental findings, and explore strategies for implementation.

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Diasporas and Outsourcing: Evidence from oDesk and India

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