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Outsourcing or restructuring: The dynamic choice

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  • Antelo, Manel
  • Bru, Lluis

Abstract

This paper examines the role of outsourcing when a firm attempts to establish its true level of production costs in an uncertain context. Outsourcing may provide additional information to the firm about the efficiency of its organizational structure. The information flow that outsourcing gives to the firm creates a real option by delaying the final decision relating to its definitive organizational mode, so that temporarily outsourcing and then resuming operations may be the optimal management decision for the firm.

Suggested Citation

  • Antelo, Manel & Bru, Lluis, 2010. "Outsourcing or restructuring: The dynamic choice," International Journal of Production Economics, Elsevier, vol. 123(1), pages 1-7, January.
  • Handle: RePEc:eee:proeco:v:123:y:2010:i:1:p:1-7
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    References listed on IDEAS

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    5. Wang, Li Ming & Liu, Li Wen & Wang, Yong Jie, 2007. "Capacity decisions and supply price games under flexibility of backward integration," International Journal of Production Economics, Elsevier, vol. 110(1-2), pages 85-96, October.
    6. Brown, Clair & Linden, Greg, 2005. "Offshoring in the Semiconductor Industry: Historical Perspectives," Institute for Research on Labor and Employment, Working Paper Series qt0wv0k78t, Institute of Industrial Relations, UC Berkeley.
    7. Bengtsson, Jens, 2001. "Manufacturing flexibility and real options: A review," International Journal of Production Economics, Elsevier, vol. 74(1-3), pages 213-224, December.
    8. Bacchetta, Philippe & Dellas, Harris, 1997. "Firm Restructuring and the Optimal Speed of Trade Reform," Oxford Economic Papers, Oxford University Press, vol. 49(2), pages 291-306, April.
    9. Alvarez, Luis H.R. & Stenbacka, Rune, 2007. "Partial outsourcing: A real options perspective," International Journal of Industrial Organization, Elsevier, vol. 25(1), pages 91-102, February.
    10. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, March.
    11. Bardhan, Ashok Deo & Kroll, Cynthia, 2003. "The New Wave of Outsourcing," Fisher Center for Real Estate & Urban Economics, Research Reports qt02f8z392, Fisher Center for Real Estate & Urban Economics, UC Berkeley.
    12. Grubbstrom, Robert W. & Olhager, Jan, 1997. "Productivity and flexibility: Fundamental relations between two major properties and performance measures of the production system," International Journal of Production Economics, Elsevier, vol. 52(1-2), pages 73-82, October.
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    Cited by:

    1. Lewis Evans & Graeme Guthrie & Neil Quigley, 2012. "Contemporary Microeconomic Foundations for the Structure and Management of the Public Sector," Treasury Working Paper Series 12/01, New Zealand Treasury.
    2. repec:spr:joptap:v:161:y:2014:i:2:d:10.1007_s10957-013-0415-4 is not listed on IDEAS
    3. Bustinza, O.F. & Arias-Aranda, D. & Gutierrez-Gutierrez, L., 2010. "Outsourcing, competitive capabilities and performance: an empirical study in service firms," International Journal of Production Economics, Elsevier, vol. 126(2), pages 276-288, August.
    4. Xu, Su Xiu & Lu, Qiang & Huang, George Q. & Zhang, Ting, 2013. "Scope economies, market information, and make-or-buy decision under asymmetric information," International Journal of Production Economics, Elsevier, vol. 145(1), pages 339-348.
    5. Feng, Bo & Fan, Zhi-Ping & Li, Yanzhi, 2011. "A decision method for supplier selection in multi-service outsourcing," International Journal of Production Economics, Elsevier, vol. 132(2), pages 240-250, August.
    6. repec:eee:ejores:v:270:y:2018:i:1:p:1-24 is not listed on IDEAS

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