Innovative people management approaches from three software research and product development firms

In geographically dispersed networks, of which the offshore information technology (IT) service provision is a major part, integration and transfer of knowledge between users of a software product and the software development firm is critical to service delivery. In such offshore outsourcing IT firms, co-development of software work is carried out across borders and time zones leveraging the strengths of each co-development team. It is critical, therefore, to understand how the skills and human capital development formation occurs across co-development teams. The need to understand this is further accentuated by the inattention to skills development issues in the sector (Githens, Dirani, Gitonga and Teng, 2008; Lacity, Khan, Yan and Willcocks, 2010; Lacity, Solomon, Yan and Willcocks, 2011). Despite the timely contributions to the burgeoning body of knowledge on human resource (HR) and management practices in Indian firms, a quick review of special issues of Human Resource Management (2010), International Journal of Human Resource Management (2012), Journal of International Business Studies (2009), Journal of Management Studies (2010) and Journal of World Business (2012) reveals that little attention has been devoted to the mechanisms of skill formation in the Indian IT off shoring/ outsourcing industry. Research on human capital formation suggests that improvement in skill development and learning at a national level can be achieved by organisational level training provision (Cappelli, 1994; Porter, Schwab, Sala-i-Martin and Lopez-Claros, 2004). The relevance of HRM and skills development, therefore, needs to be understood in the context of where skills are applied, that is, in the organisation. An increasing body of literature is highlighting the need to look at the 'soft' HRM aspects of technology and software product development, including aspects such as culture, change and learning rather than the 'hard' planning and technological factors (Heaton, 1998; Jenkin and Chan, 2010). Organisations engaged in software and IT product development are not only the end users of skills, but they also exercise strategic choices with regards to skills development (Kochan, McKersie and Cappelli, 1984). The notion of strategic choice (Child, 1972; Kochan et al., 1984) is extremely relevant here as firms in the offshore IT outsourcing services sector have to balance the tensions between the key groups of dominant stakeholders such as the client, offshore product development subsidiary or provider and/or the parent organisation. It is through the interactions between the contractual and relational arrangements of key stakeholder groups that co-development of software and product development occurs. There has been a slow but steady stream of studies analysing the influence of client firms on the supplier firms' HRM practices covering a range of businesses from small and medium enterprises in manufacturing sectors (Rainnie, 1989; Valmasakis and Sprague, 200 I), for example, to knowledge intensive services firms such as IT outsourcing services (Grimshaw and Miozzo, 2006, 2009; Swart and Kinnie, 2003). While there is strong evidence of both direct and indirect forms of influence by client firms on supplier firms (Beaumont, Hunter and Sinclair, 1996), some researchers have highlighted the increasing role of the client's power (Harvard, Rorive and Sobczack, 2009) in shaping the HR practices of supplier firms. Still others have highlighted the need to reconceptualise the traditional concepts of 'actors in an industrial relations system' and rethink 'strategic choice' in these relationships by including clients and dispersed work teams as new actors in this new system of employment relations (Legault and Bellemare, 2008). To this end, this chapter argues that there exists negotiation between different stakeholder groups in determining an appropriate set of innovative HRM practices for carrying out outsourced/offshored IT and software development work. With this in mind, this chapter aims to answer the following research questions: 1. What are the key innovative HRM practices employed by software product development firms in India? 2. What are the key factors that impact on the development of these HRM practices? The rest of the chapter is organised as follows. First, a brief review of India's software product development, research and design development sector is offered. Second, the theoretical framing employed by the chapter relevant for product development environment is presented. This is followed by the methodological and analytical strategies, discussion and conclusion