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The Trend Toward Outsourcing In New Product Development: Case Studies In Six Firms

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  • YUSHAN ZHAO

    (Department of Marketing, University of Wisconsin, Whitewater, USA)

  • ROGER J. CALANTONE

    (Department of Marketing and Supply Chain Management, The Eli Broad Graduate School of Management, Michigan State University, USA)

Abstract

In the constant drive for higher quality, lower cost, and faster-to-market products, many firms have begun to learn "how not to make things" — how to give some tasks to other firms who could make more efficiently. Examples from industries highlight the trend. Case studies were conducted in six firms and many insightful comments from prominent managers are incorporated.The case studies reveal a trend toward outsourcing some tasks in new product development. We use the transaction cost theory and the resource-based theory to explain the trend of outsourcing. This kind of outsourcing allows the firm to focus on core tasks and access resources and capabilities not available or not easily developed internally. NPD program performance can be greatly enhanced, and the R&D department can move away from routine administration toward a more strategic role. Many implications for managers are offered, and theoretical contributions are discussed.

Suggested Citation

  • Yushan Zhao & Roger J. Calantone, 2003. "The Trend Toward Outsourcing In New Product Development: Case Studies In Six Firms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 51-66.
    • Handle: RePEc:wsi:ijimxx:v:07:y:2003:i:01:n:s136391960300074x
    DOI: 10.1142/S136391960300074X
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    References listed on IDEAS

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    1. Peter J. Buckley & Mark Casson, 1991. "The Future of the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-21204-0.
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    Cited by:

    1. Hsieh, Sara H. & Chang, Aihwa, 2016. "The Psychological Mechanism of Brand Co-creation Engagement," Journal of Interactive Marketing, Elsevier, vol. 33(C), pages 13-26.
    2. K. Sivakumar & Subroto Roy, 2019. "Global new product development: moderating role of national culture on the link between buyer–seller interactions and innovation outcomes," AMS Review, Springer;Academy of Marketing Science, vol. 9(3), pages 205-229, December.
    3. da Silveira, Giovani J.C., 2014. "An empirical analysis of manufacturing competitive factors and offshoring," International Journal of Production Economics, Elsevier, vol. 150(C), pages 163-173.
    4. Luigi Cantone & Pierpaolo Testa & Svend Hollensen & Giuseppe Fabio Cantone, 2019. "Outsourcing New Product Development Fostered By Disruptive Technological Innovation: A Decision-Making Model," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(01), pages 1-45, January.
    5. Knoppen, Desirée & Sáenz, María Jesús, 2017. "Interorganizational teams in low-versus high-dependence contexts," International Journal of Production Economics, Elsevier, vol. 191(C), pages 15-25.
    6. Wenjing Wang, 2014. "Do specialists exit the firm outsourcing its R&D?," Economics Working Papers 2014-21, Department of Economics and Business Economics, Aarhus University.
    7. Pongelli, Claudia & Calabrò, Andrea & Basco, Rodrigo, 2019. "Family firms' international make-or-buy decisions: Captive offshoring, offshore outsourcing, and the role of home region focus," Journal of Business Research, Elsevier, vol. 103(C), pages 596-606.
    8. Dirk M. Boehe, 2010. "Captive Offshoring of New Product Development in Brazil," Management International Review, Springer, vol. 50(6), pages 747-773, December.
    9. Trott, Paul & Simms, Chris, 2017. "An examination of product innovation in low- and medium-technology industries: Cases from the UK packaged food sector," Research Policy, Elsevier, vol. 46(3), pages 605-623.
    10. Yuan Li & Zelong Wei & Yi Liu, 2010. "Strategic Orientations, Knowledge Acquisition, and Firm Performance: The Perspective of the Vendor in Cross-Border Outsourcing," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1457-1482, December.
    11. Hutzschenreuter, Thomas & Lewin, Arie Y. & Dresel, Stephan, 2011. "Governance modes for offshoring activities: A comparison of US and German firms," International Business Review, Elsevier, vol. 20(3), pages 291-313, June.
    12. Stanko, Michael A. & Olleros, Xavier, 2013. "Industry growth and the knowledge spillover regime: Does outsourcing harm innovativeness but help profit?," Journal of Business Research, Elsevier, vol. 66(10), pages 2007-2016.

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