Service Offshoring and Cultural Differences: Evidence from a US Financial Services Multinational’s Operations in Three EU Countries

The growing phenomenon 'service offshoring' has attracted increasing attention from the popular media, policy-makers and academic researchers. Cross-national cultural differences have been identified as a potentially significant influence on the location and effective performance of offshored services but this issue has received only limited treatment in the literature to date. To contribute to the emerging literature on service offshoring, this paper investigates the existence, nature and extent of differences in the culturally-determined work-related values of staff working at a US financial services multinational in Europe. Specifically, Hofstede's values survey module questionnaire was completed by staff working in this firm's 'retirement service centres' in Ireland, Portugal and Germany, which were involved in existing or potential bilateral intra-firm work offshoring relationships. The study identified significant differences in work-related values between the three country groups on several of the Hofstede dimensions. However, some of the results were surprising in that they contradicted the anticipated direction of cultural differences based on the published Hofstede country dimension scores. Some potential implications of these findings for the firm in question, for managerial practice more generally, and for policy-makers in different national contexts are discussed.