IDEAS home Printed from https://ideas.repec.org/a/spr/opmare/v9y2016i3d10.1007_s12063-016-0113-0.html
   My bibliography  Save this article

Exploring the reshoring and insourcing decision making process: toward an agenda for future research

Author

Listed:
  • Lydia Bals

    (University of Applied Sciences Mainz - School of Business
    Copenhagen Business School)

  • Jon F. Kirchoff

    (East Carolina University)

  • Kai Foerstl

    (German Graduate School of Management & Law (GGS))

Abstract

The topics of reshoring and insourcing have recently become more widely discussed among operations management and international business scholars and managers, as some firms are revoking their offshoring and outsourcing decisions. This research focuses on and clarifies the decision making processes related to the two distinct, yet closely related phenomena of reshoring and insourcing. It presents a conceptual framework of all theoretically possible reshoring and insourcing decisions, illustrated in its applicability by a review of the United States and German business press. Then four future research avenues are developed as part of an overall decision making framework together with an overview of specific research questions for this emergent field. Further research avenues include the need to differentiate between reshoring/insourcing as strategic direction or reaction to failure, studying organizational readiness in addition to decision drivers, improve coverage of the implementation stage and explore further contingency factors such as technological advancement as well as to focus on decision makers as the unit of analysis.

Suggested Citation

  • Lydia Bals & Jon F. Kirchoff & Kai Foerstl, 2016. "Exploring the reshoring and insourcing decision making process: toward an agenda for future research," Operations Management Research, Springer, vol. 9(3), pages 102-116, December.
  • Handle: RePEc:spr:opmare:v:9:y:2016:i:3:d:10.1007_s12063-016-0113-0
    DOI: 10.1007/s12063-016-0113-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12063-016-0113-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s12063-016-0113-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gabriel R. G. Benito & Bent Petersen & Lawrence S. Welch, 2011. "Mode Combinations and International Operations," Management International Review, Springer, vol. 51(6), pages 803-820, December.
    2. Arie Y Lewin & Silvia Massini & Carine Peeters, 2009. "Why are companies offshoring innovation? The emerging global race for talent," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(8), pages 1406-1406, October.
    3. Mukherjee, Debmalya & Gaur, Ajai S. & Datta, Avimanyu, 2013. "Creating value through offshore outsourcing: An integrative framework," Journal of International Management, Elsevier, vol. 19(4), pages 377-389.
    4. Cabral , Sandro & Quelin, Bertrand V. & Maia , Walmir, 2013. "Outsourcing Failure and Reintegration: The Influence of Contractual and External Factors," HEC Research Papers Series 991, HEC Paris.
    5. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    6. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    7. Arie Lewin & Silvia Massini & Carine Peeters, 2008. "Why are companies offshoring innovation ?the emerging global race for talent," Working Papers CEB 08-009, ULB -- Universite Libre de Bruxelles.
    8. Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-325, May.
    9. Steven Tadelis & Oliver E.Williamson, 2012. "Transaction Cost Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    10. Peter Maskell & Torben Pedersen & Bent Petersen & Jens Dick-Nielsen, 2007. "Learning Paths to Offshore Outsourcing: From Cost Reduction to Knowledge Seeking," Industry and Innovation, Taylor & Francis Journals, vol. 14(3), pages 239-257.
    11. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    12. Lilach Nachum & Srilata Zaheer, 2005. "The persistence of distance? The impact of technology on MNE motivations for foreign investment," Strategic Management Journal, Wiley Blackwell, vol. 26(8), pages 747-767, August.
    13. Jensen, Peter D. Ørberg & Larsen, Marcus M. & Pedersen, Torben, 2013. "The organizational design of offshoring: Taking stock and moving forward," Journal of International Management, Elsevier, vol. 19(4), pages 315-323.
    14. Lilach Nachum & Srilata Zaheer & Shulamith Gross, 2008. "Does It Matter Where Countries Are? Proximity to Knowledge, Markets and Resources, and MNE Location Choices," Management Science, INFORMS, vol. 54(7), pages 1252-1265, July.
    15. John Dunning, 1981. "Explaining the international direct investment position of countries: Towards a dynamic or developmental approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 117(1), pages 30-64, March.
    16. Chan, David, 1996. "Cognitive Misfit of Problem-Solving Style at Work: A Facet of Person-Organization Fit," Organizational Behavior and Human Decision Processes, Elsevier, vol. 68(3), pages 194-207, December.
    17. Freytag, Per V. & Clarke, Ann H. & Evald, Majbritt R., 2012. "Reconsidering outsourcing solutions," European Management Journal, Elsevier, vol. 30(2), pages 99-110.
    18. Alan M. Rugman & Alain Verbeke & Quyen T. K. Nguyen, 2011. "Fifty Years of International Business Theory and Beyond," Management International Review, Springer, vol. 51(6), pages 755-786, December.
    19. Schmeisser, Bjoern, 2013. "A Systematic Review of Literature on Offshoring of Value Chain Activities," Journal of International Management, Elsevier, vol. 19(4), pages 390-406.
    20. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    21. Lewin, Arie Y. & Volberda, Henk W., 2011. "Co-evolution of global sourcing: The need to understand the underlying mechanisms of firm-decisions to offshore," International Business Review, Elsevier, vol. 20(3), pages 241-251, June.
    22. Michael Gibbert & Winfried Ruigrok & Barbara Wicki, 2008. "What passes as a rigorous case study?," Strategic Management Journal, Wiley Blackwell, vol. 29(13), pages 1465-1474, December.
    23. Farok J. Contractor & Vikas Kumar & Sumit K. Kundu & Torben Pedersen, 2010. "Reconceptualizing the Firm in a World of Outsourcing and Offshoring: The Organizational and Geographical Relocation of High‐Value Company Functions," Journal of Management Studies, Wiley Blackwell, vol. 47(8), pages 1417-1433, December.
    24. Tate, Wendy L. & Ellram, Lisa M. & Bals, Lydia & Hartmann, Evi, 2009. "Offshore outsourcing of services: An evolutionary perspective," International Journal of Production Economics, Elsevier, vol. 120(2), pages 512-524, August.
    25. John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(1), pages 9-31, March.
    26. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(1), pages 1-31, March.
    27. Farok J. Contractor & Vikas Kumar & Sumit K. Kundu & Torben Pedersen, 2010. "Reconceptualizing the Firm in a World of Outsourcing and Offshoring: The Organizational and Geographical Relocation of High-Value Company Functions," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1417-1433, December.
    28. Juan Alcácer, 2006. "Location Choices Across the Value Chain: How Activity and Capability Influence Collocation," Management Science, INFORMS, vol. 52(10), pages 1457-1471, October.
    29. Hätönen, Jussi & Eriksson, Taina, 2009. "30+Â years of research and practice of outsourcing - Exploring the past and anticipating the future," Journal of International Management, Elsevier, vol. 15(2), pages 142-155, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pourya Pourhejazy & Alison Ashby, 2021. "Reshoring Decisions for Adjusting Supply Chains in a Changing World: A Case Study from the Apparel Industry," IJERPH, MDPI, vol. 18(9), pages 1-13, May.
    2. Dachs, Bernhard & Kinkel, Steffen & Jäger, Angela, 2019. "Bringing it all back home? Backshoring of manufacturing activities and the adoption of Industry 4.0 technologies," Journal of World Business, Elsevier, vol. 54(6), pages 1-1.
    3. Mohamed M. Dhiaf & Osama F. Atayah & Nohade Nasrallah & Guilherme F. Frederico, 2021. "Thirteen years of Operations Management Research (OMR) journal: a bibliometric analysis and future research directions," Operations Management Research, Springer, vol. 14(3), pages 235-255, December.
    4. Henrik Brynthe Lund & Markus Steen, 2019. "Make at home or abroad? Manufacturing reshoring through a GPN lens," PEGIS geo-disc-2019_09, Institute for Economic Geography and GIScience, Department of Socioeconomics, Vienna University of Economics and Business.
    5. Bart Kamp & Juan José Gibaja, 2021. "Adoption of digital technologies and backshoring decisions: is there a link?," Operations Management Research, Springer, vol. 14(3), pages 380-402, December.
    6. Silvia Cosimato & Roberto Vona, 2021. "Digital Innovation for the Sustainability of Reshoring Strategies: A Literature Review," Sustainability, MDPI, vol. 13(14), pages 1-16, July.
    7. Amy V. Benstead & Mark Stevenson & Linda C. Hendry, 2017. "Why and how do firms reshore? A contingency-based conceptual framework," Operations Management Research, Springer, vol. 10(3), pages 85-103, December.
    8. Barbieri, Paolo & Boffelli, Albachiara & Elia, Stefano & Fratocchi, Luciano & Kalchschmidt, Matteo, 2022. "How does Industry 4.0 affect international exposure? The interplay between firm innovation and home-country policies in post-offshoring relocation decisions," International Business Review, Elsevier, vol. 31(4).
    9. Młody Michał & Stępień Beata, 2020. "Principles of reshoring development in luxury goods sector," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(2), pages 140-158, June.
    10. Piatanesi, Benedetta & Arauzo Carod, Josep Maria, 2019. "An Analysis about reverse offshoring," Working Papers 2072/376030, Universitat Rovira i Virgili, Department of Economics.
    11. Lahiri, Somnath & Karna, Amit & Chittaranjan Kalubandi, Sai & Edacherian, Saneesh, 2022. "Performance implications of outsourcing: A meta-analysis," Journal of Business Research, Elsevier, vol. 139(C), pages 1303-1316.
    12. Albachiara Boffelli & Luciano Fratocchi & Matteo Kalchschmidt & Susana Cristina Lima da Costa e Silva, 2021. "Doing the right thing or doing things right: what is better for a successful manufacturing reshoring?," Operations Management Research, Springer, vol. 14(1), pages 1-16, June.
    13. Stentoft, Jan & Mikkelsen, Ole Stegmann & Jensen, Jesper Kronborg & Rajkumar, Christopher, 2018. "Performance outcomes of offshoring, backshoring and staying at home manufacturing," International Journal of Production Economics, Elsevier, vol. 199(C), pages 199-208.
    14. Albachiara Boffelli & Malin Johansson, 2020. "What do we want to know about reshoring? Towards a comprehensive framework based on a meta-synthesis," Operations Management Research, Springer, vol. 13(1), pages 53-69, June.
    15. Młody Michał & Stępień Beata, 2020. "Principles of reshoring development in luxury goods sector," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(2), pages 140-158, June.
    16. Godfrey Mugurusi & Lydia Bals, 2017. "A processual analysis of the purchasing and supply organization in transition: the impact of offshoring," Operations Management Research, Springer, vol. 10(1), pages 64-83, June.
    17. Henkel, Malin & Boffelli, Albachiara & Olhager, Jan & Kalchschmidt, Matteo, 2022. "A case survey of offshoring–backshoring cases: The influence of contingency factors," International Journal of Production Economics, Elsevier, vol. 253(C).
    18. Fernando Merino & Cristina Di Stefano & Luciano Fratocchi, 2021. "Back-shoring vs near-shoring: a comparative exploratory study in the footwear industry," Operations Management Research, Springer, vol. 14(1), pages 17-37, June.
    19. McIvor, Ronan & Bals, Lydia, 2021. "A multi-theory framework for understanding the reshoring decision," International Business Review, Elsevier, vol. 30(6).
    20. Movin Sequeira & Anders Adlemo & Per Hilletofth, 2023. "A hybrid fuzzy-AHP-TOPSIS model for evaluation of manufacturing relocation decisions," Operations Management Research, Springer, vol. 16(1), pages 164-191, March.
    21. Paolo Barbieri & Albachiara Boffelli & Stefano Elia & Luciano Fratocchi & Matteo Kalchschmidt & Danny Samson, 2020. "What can we learn about reshoring after Covid-19?," Operations Management Research, Springer, vol. 13(3), pages 131-136, December.
    22. Paolo Barbieri & Clio Dosi & Matteo Vignoli, 2023. "Implementing reshoring: insights and principles from a longitudinal case study in the e-bike industry," Operations Management Research, Springer, vol. 16(2), pages 555-573, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Niccolò Pisani & Joan Enric Ricart, 2016. "Offshoring of Services: A Review of the Literature and Organizing Framework," Management International Review, Springer, vol. 56(3), pages 385-424, June.
    2. Yi-Ju Lo & Tung Hung, 2015. "Structure offshoring and returns on offshoring," Asia Pacific Journal of Management, Springer, vol. 32(2), pages 443-479, June.
    3. Valle, Sandra & García, Francisco & Avella, Lucía, 2015. "Offshoring Intermediate Manufacturing: Boost or Hindrance to Firm Innovation?," Journal of International Management, Elsevier, vol. 21(2), pages 117-134.
    4. Mukherjee, Debmalya & Kumar, Satish & Pandey, Nitesh & Lahiri, Somnath, 2023. "Is offshoring dead? A multidisciplinary review and future directions," Journal of International Management, Elsevier, vol. 29(3).
    5. Schmeisser, Bjoern, 2013. "A Systematic Review of Literature on Offshoring of Value Chain Activities," Journal of International Management, Elsevier, vol. 19(4), pages 390-406.
    6. Jensen, Peter D. Ørberg, 2012. "A passage to India: A dual case study of activities, processes and resources in offshore outsourcing of advanced services," Journal of World Business, Elsevier, vol. 47(2), pages 311-326.
    7. Caniato, Federico & Elia, Stefano & Luzzini, Davide & Piscitello, Lucia & Ronchi, Stefano, 2015. "Location drivers, governance model and performance in service offshoring," International Journal of Production Economics, Elsevier, vol. 163(C), pages 189-199.
    8. Wieland, Andreas & Bals, Lydia & Mol, Michael J. & Handfield, Robert B., 2020. "Overcoming blind spots in global sourcing research: Exploiting the cross-sections between supply chain management and international business," Journal of International Management, Elsevier, vol. 26(1).
    9. Nidthida Lin, 2020. "Designing Global Sourcing Strategy for Cost Savings and Innovation: A Configurational Approach," Management International Review, Springer, vol. 60(5), pages 723-753, October.
    10. Dachs, Bernhard & Kinkel, Steffen & Jäger, Angela, 2019. "Bringing it all back home? Backshoring of manufacturing activities and the adoption of Industry 4.0 technologies," Journal of World Business, Elsevier, vol. 54(6), pages 1-1.
    11. Schubert, Torben & Baier, Elisabeth & Rammer, Christian, 2016. "Technological capabilities, technological dynamism and innovation offshoring," ZEW Discussion Papers 16-044, ZEW - Leibniz Centre for European Economic Research.
    12. Amendolagine, Vito & Capolupo, Rosa & Ferri, Giovanni, 2014. "Innovativeness, offshoring and black economy decisions. Evidence from Italian manufacturing firms," International Business Review, Elsevier, vol. 23(6), pages 1153-1166.
    13. Driffield, Nigel & Pereira, Vijay & Temouri, Yama, 2019. "Does offshore outsourcing impact home employment? Evidence from service multinationals," Journal of Business Research, Elsevier, vol. 103(C), pages 448-459.
    14. Zimmermann, Angelika & Ravishankar, M.N., 2016. "A systems perspective on offshoring strategy and motivational drivers amongst onshore and offshore employees," Journal of World Business, Elsevier, vol. 51(4), pages 548-567.
    15. Martinez-Noya, Andrea & Narula, Rajneesh, 2018. "What more can we learn from R&D alliances? : A review and research agenda," MERIT Working Papers 2018-022, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Torben Schubert & Elisabeth Baier & Christian Rammer, 2018. "Firm capabilities, technological dynamism and the internationalisation of innovation: A behavioural approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(1), pages 70-95, January.
    17. Christopher L. Erickson & Peter Norlander, 2022. "How the past of outsourcing and offshoring is the future of post‐pandemic remote work: A typology, a model and a review," Industrial Relations Journal, Wiley Blackwell, vol. 53(1), pages 71-89, January.
    18. Martina Musteen & Mujtaba Ahsan & Taekyung Park, 2017. "SMEs, Intellectual Capital, and Offshoring of Service Activities: An Empirical Investigation," Management International Review, Springer, vol. 57(4), pages 603-630, August.
    19. Baier, Elisabeth & Rammer, Christian & Schubert, Torben, 2015. "The Impact of Captive Innovation Offshoring on the Effectiveness of Organizational Adaptation," Journal of International Management, Elsevier, vol. 21(2), pages 150-165.
    20. Barbieri, Paolo & Boffelli, Albachiara & Elia, Stefano & Fratocchi, Luciano & Kalchschmidt, Matteo, 2022. "How does Industry 4.0 affect international exposure? The interplay between firm innovation and home-country policies in post-offshoring relocation decisions," International Business Review, Elsevier, vol. 31(4).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:opmare:v:9:y:2016:i:3:d:10.1007_s12063-016-0113-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.