Beyond the Headquarters : Exploring Operational Challenges in Captive Offshoring

In recent decades, captive offshoring has emerged as a strategic practice that goes beyond the rudimentary objective of cost arbitrage, aiming instead to access international talent, facilitate innovation, and enhance operational flexibility. Among various offshoring destinations, India has gained a distinct position, particularly in the services segment, offering information technology (IT), software, and knowledge services that demand advanced skill sets. However, captive offshore centers in India, now increasingly referred to as Global Capability Centers (GCCs), continue to face operational challenges that require closer examination to ensure long- term success. This thesis explores two central research questions: (1) What key challenges do Global Capability Centers (GCCs) in India currently face? and (2) How do these challenges shape performance outcomes within Global Capability Centers (GCCs)? To address these questions, the study adopts a qualitative approach, utilizing open-ended questionnaires and interviews with twelve senior-level executives working in GCCs in India across IT, software, and investment banking services. The findings reveal that without adequate nurturing by the parent multinational enterprise (MNE), sufficient autonomy, and involvement in corporate decision making, GCCs risk underperforming and becoming misaligned with the strategic objectives of their headquarters. This research contributes to the understanding of the evolving role of GCCs as innovation- driven centers of excellence and highlights the importance of strategic integration between headquarters and offshore entities.