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Sourcing Strategies of Manufacturing Firms: Transaction Cost Implications

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  • Hong Y. Park
  • C. Surender Reddy
  • Iksu Jurn
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    Abstract

    Developing the right sourcing strategy in managing the firmÕs supplies is critical for todayÕs managers. They realize the long-term impact of their sourcing strategies (make or buy, supply-base structure, and nature of customer-supplier relationship) on the profits and the efficient functioning of the organization. The study examines and evaluates changes in these strategic choices. The study revealed the following: small and lower labor productivity firms rate their internal suppliers better than external suppliers; obtaining supplies nationwide from a limited number of suppliers is the prevalent supply-base structure; and customersupplier relationship is deepening.

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    File URL: http://www.emeraldinsight.com/journals.htm?issn=1935-5181&volume=16&issue=2&articleid=1917802&show=abstract
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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal American Journal of Business.

    Volume (Year): 16 (2001)
    Issue (Month): 2 ()
    Pages: 11-20

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    Handle: RePEc:eme:ajbpps:v:16:y:2001:i:2:p:11-20

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    Related research

    Keywords: Customer-supplier Relationship; Make or Buy Strategy; Sourcing Strategies; Strategy Mix; Supply-base Structure; Transaction Cost;

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    References

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    1. Hong Y Park, 2000. "Foreign direct investment and global sourcing choices of firms in the US," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 211-221.
    2. Coase, Ronald H., 1991. "The Institutional Structure of Production," Nobel Prize in Economics documents 1991-1, Nobel Prize Committee.
    3. Demsetz, Harold, 1988. "The Theory of the Firm Revisited," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 141-61, Spring.
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