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A strategic needs perspective on operations outsourcing and other inter-firm relationships

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  • Mazzola, Erica
  • Perrone, Giovanni

Abstract

This paper considers two issues: the formation of inter-firm relationships, and the choice of governance form. These have been widely investigated in both the strategic management and operations management fields. This paper contributes to the literature in three ways. First, we address why firms enter inter-firm relationships by hypothesizing that managers enter them to pursue three strategic needs, that is: efficiency/effectiveness, knowledge/learning, and global market access. Our first contribution evidences the relationship between the above strategic needs and a number of operational objectives that managers normally pursue in an inter-firm relationship. Second, we hypothesize how the achievement of the above strategic needs influences the choice of governance form. Third, we compare our framework with the operations management approach to strategic networks by evidencing similarities between the two approaches and showing that managers pursue a similar approach when they face inter-firm agreement issues, whether agreements are supply-chain- or strategy-oriented. We empirically test our framework using secondary data consisting of 95 inter-firm agreements. Our findings largely support the theoretical predictions, and also have important practical implications. First, our results offer managers “practice” suggestions on what kinds of objectives can be pursued together in inter-firm relationships to achieve specific strategic needs, and which governance form is most suitable, depending on the strategic need in question. Second, we consider the strategic reasoning concerning inter-firm relationship management, and some engineering issues, such as time and quality objectives, that, while largely considered in the operations management literature, are often neglected in the strategic management field.

Suggested Citation

  • Mazzola, Erica & Perrone, Giovanni, 2013. "A strategic needs perspective on operations outsourcing and other inter-firm relationships," International Journal of Production Economics, Elsevier, vol. 144(1), pages 256-267.
  • Handle: RePEc:eee:proeco:v:144:y:2013:i:1:p:256-267
    DOI: 10.1016/j.ijpe.2013.02.012
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    3. Cheng, Yang & Farooq, Sami, 2018. "The role of plants in manufacturing networks: A revisit and extension," International Journal of Production Economics, Elsevier, vol. 206(C), pages 15-32.
    4. Maurizio Cisi & Francesco Devicienti & Alessandro Manello & Davide Vannoni, 2016. "The Impact of Formal Networking on the Performance of SMEs," Working papers 039, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    5. Schoenherr, Tobias & Narayanan, Sriram & Narasimhan, Ram, 2015. "Trust formation in outsourcing relationships: A social exchange theoretic perspective," International Journal of Production Economics, Elsevier, vol. 169(C), pages 401-412.
    6. Maurizio Cisi & Francesco Devicienti & Alessandro Manello & Davide Vannoni, 2016. "The Impact of Formal Networking on the Performance of SMEs," Working papers 039, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    7. Mohammed BELAL UDDIN, 2017. "Evaluation Of Theoretical Paradigms Of Interfirm Relationship Formation," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(1), pages 106-114, May.
    8. Ancarani, Alessandro & Di Mauro, Carmela & Fratocchi, Luciano & Orzes, Guido & Sartor, Marco, 2015. "Prior to reshoring: A duration analysis of foreign manufacturing ventures," International Journal of Production Economics, Elsevier, vol. 169(C), pages 141-155.
    9. Schoenherr, Tobias & Wagner, Stephan M., 2016. "Supplier involvement in the fuzzy front end of new product development: An investigation of homophily, benevolence and market turbulence," International Journal of Production Economics, Elsevier, vol. 180(C), pages 101-113.
    10. Mazzola, Erica & Perrone, Giovanni & Kamuriwo, Dzidziso Samuel, 2016. "The interaction between inter-firm and interlocking directorate networks on firm's new product development outcomes," Journal of Business Research, Elsevier, vol. 69(2), pages 672-682.
    11. Roberto Gabriele & Andrea Mazzitelli & Giuseppe Espa & Maria Michela Dickson, 2019. "Capabilities and firm growth: the role of formal collaboration agreements," DEM Working Papers 2019/16, Department of Economics and Management.
    12. Mazzola, Erica & Perrone, Giovanni & Kamuriwo, Dzidziso Samuel, 2015. "Network embeddedness and new product development in the biopharmaceutical industry: The moderating role of open innovation flow," International Journal of Production Economics, Elsevier, vol. 160(C), pages 106-119.
    13. Bhattacharya, Ananya & Singh, Prakash J. & Nand, Alka Ashwini, 2015. "Antecedents of buyer opportunistic behavior in outsourcing relationships," International Journal of Production Economics, Elsevier, vol. 166(C), pages 258-268.
    14. Gmelin, Harald & Seuring, Stefan, 2014. "Achieving sustainable new product development by integrating product life-cycle management capabilities," International Journal of Production Economics, Elsevier, vol. 154(C), pages 166-177.
    15. Zeng, Jing & Anh Phan, Chi & Matsui, Yoshiki, 2015. "The impact of hard and soft quality management on quality and innovation performance: An empirical study," International Journal of Production Economics, Elsevier, vol. 162(C), pages 216-226.

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