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Are logistics outsourcing partners more integrated in a more volatile environment?

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  • Yang, Qian
  • Zhao, Xiande

Abstract

This study examines how integration, an emerging innovative approach in inter-firm relationship management, between the vendor and the client in logistics outsourcing relationships is influenced by environmental uncertainties. Building on transaction cost theory, we develop the hypothesis that integration decreases to cope with supply volatility and technology uncertainty, and increases to cope with demand volatility and legal unenforceability. These four interrelated yet distinct characteristics jointly describe environmental uncertainties in a logistics outsourcing relationship. Our analysis of 264 such relationships suggests that integration does decrease with supply volatility and technology uncertainty and increase with demand volatility and legal unenforceability. By enhancing operational performance, integration improves outsourcing performance in terms of both financial performance and overall satisfaction. Lastly, operational performance also contributes to financial performance.

Suggested Citation

  • Yang, Qian & Zhao, Xiande, 2016. "Are logistics outsourcing partners more integrated in a more volatile environment?," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 211-220.
    • Handle: RePEc:eee:proeco:v:171:y:2016:i:p2:p:211-220
    DOI: 10.1016/j.ijpe.2015.09.036
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    7. Abdalla, Sara Siddig Ali, 2021. "Logistics innovation and integration: Impact on supply chain adaptability," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Ringle, Christian M. & Blecker, Thorsten (ed.), Adapting to the Future: How Digitalization Shapes Sustainable Logistics and Resilient Supply Chain Management. Proceedings of the Hamburg Internationa, volume 31, pages 639-661, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    8. Ameknassi, Lhoussaine & Aït-Kadi, Daoud & Rezg, Nidhal, 2016. "Integration of logistics outsourcing decisions in a green supply chain design: A stochastic multi-objective multi-period multi-product programming model," International Journal of Production Economics, Elsevier, vol. 182(C), pages 165-184.
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    13. Yang, Qian & Zhao, Xiande & Yeung, Hoi Yan Jeff & Liu, Yanping, 2016. "Improving logistics outsourcing performance through transactional and relational mechanisms under transaction uncertainties: Evidence from China," International Journal of Production Economics, Elsevier, vol. 175(C), pages 12-23.

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