Underlying model of business process outsourcing (BPO) in India

In the new policy regime, the regionalization of economic activities has taken place at a pace ever than before. The new regime is characterized by an interesting dichotomy, i.e., free global mobility of capital coupled with restricted mobility of labour. This dichotomous behaviour, with information technology enabled services acting as a catalyst, has altered the age-old industrial organization. It has given rise to new production and marketing organization systems. Restricted global mobility of labour has compelled the big corporate houses to outsource many of their processes and functions to those parts of the globe where the specialization and comparative cost advantage exists. In this context, the work is an attempt to capture the structure and dynamics of business process outsourcing, with special reference to India. The analysis is based on financial statements of seventy five companies covering a period of ten years. The broad finding of the work is that the emerging model of business process outsourcing industry is a “high-risk quick-buck model” that needs immediate policy intervention to ensure its sustainability and transparency