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International Differences in the Business Practices and Productivity of Firms$
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Richard B. Freeman and Kathryn L. Shaw

Print publication date: 2009

Print ISBN-13: 9780226261942

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226261959.001.0001

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Measuring the Productivity of Software Development in a Globally Distributed Company

Measuring the Productivity of Software Development in a Globally Distributed Company

Chapter:
(p.193) 7 Measuring the Productivity of Software Development in a Globally Distributed Company
Source:
International Differences in the Business Practices and Productivity of Firms
Author(s):

Alec Levenson

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226261959.003.0008

This chapter analyzes the experience of one company that has moved extensively to take advantage of lower labor costs for technical talent by spreading its software research and development (R&D) works worldwide. The research issues addressed are: whether there are differences in performance between the company's software development sites in the United States, Western Europe, and other countries; the factors leading to those differences; the company's rationale for locating software development work in those locations; and the future prospects for software development work at those locations. The chapter has found evidence in favor of several conclusions: International differences in productivity do not appear to be a big factor in explaining cross-sectional patterns of software development work Location, to the extent that geographic dispersion, matters, and spreading work out to the point where there is no overlap in the standard workday may put limits on the productivity of individual team members. However, the teams as a whole appear capable of dealing with such pressures without significantly impacting the teams' overall effectiveness, and even though the data did not reveal average productivity differences across sites, this says nothing about marginal productivity differences.

Keywords:   productivity, software development, globally distributed companies, labor costs, technical talent

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