A strategic needs perspective on operations outsourcing and other inter-firm relationships
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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bruce Kogut, 1991. "Joint Ventures and the Option to Expand and Acquire," Management Science, INFORMS, vol. 37(1), pages 19-33, January.
- Keith W. Glaister, 1996. "Strategic Motives For International Alliance Formation," Journal of Management Studies, Wiley Blackwell, vol. 33(3), pages 301-332, 05.
- Shepherd, Dean A. & Douglas, Evan J. & Shanley, Mark, 2000. "New venture survival: Ignorance, external shocks, and risk reduction strategies," Journal of Business Venturing, Elsevier, vol. 15(5-6), pages 393-410.
- Duysters, Geert & Vanhaverbeke, Wim & Vrande, Vareska van de, 2007.
"External technology sourcing: The effect of uncertainty on governance mode choice,"
MERIT Working Papers
019, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- van de Vrande, Vareska & Vanhaverbeke, Wim & Duysters, Geert, 2009. "External technology sourcing: The effect of uncertainty on governance mode choice," Journal of Business Venturing, Elsevier, vol. 24(1), pages 62-80, January.
- Luo, Yadong, 2007. "From foreign investors to strategic insiders: Shifting parameters, prescriptions and paradigms for MNCs in China," Journal of World Business, Elsevier, vol. 42(1), pages 14-34, March.
- repec:hal:journl:hal-00424512 is not listed on IDEAS
- Mellat-Parast, Mahour & Digman, Lester A., 2008. "Learning: The interface of quality management and strategic alliances," International Journal of Production Economics, Elsevier, vol. 114(2), pages 820-829, August.
- Dean Elmuti, 2003. "The Perceived Impact of Outsourcing on Organizational Performance," American Journal of Business, Emerald Group Publishing, vol. 18(2), pages 33-42.
- Robert Axelrod & Will Mitchell & Robert E. Thomas & D. Scott Bennett & Erhard Bruderer, 1995. "Coalition Formation in Standard-Setting Alliances," Management Science, INFORMS, vol. 41(9), pages 1493-1508, September.
- 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 233-61, October.
- Susan M. Mudambi & Stephen Tallman, 2010. "Make, Buy or Ally? Theoretical Perspectives on Knowledge Process Outsourcing through Alliances," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1434-1456, December.
- Lee, Peter K.C. & Yeung, Andy C.L. & Edwin Cheng, T.C., 2009. "Supplier alliances and environmental uncertainty: An empirical study," International Journal of Production Economics, Elsevier, vol. 120(1), pages 190-204, July.
- Nilsson, Carl-Henric, 1997. "Strategic alliances, trick or treat? the case of Scania," International Journal of Production Economics, Elsevier, vol. 52(1-2), pages 147-160, October.
- Perry, Marcia & Sohal, Amrik S. & Rumpf, Peter, 1999. "Quick Response supply chain alliances in the Australian textiles, clothing and footwear industry," International Journal of Production Economics, Elsevier, vol. 62(1-2), pages 119-132, May.
- Chen, Homin & Chen, Tain-Jy, 2003. "Governance structures in strategic alliances: transaction cost versus resource-based perspective," Journal of World Business, Elsevier, vol. 38(1), pages 1-14, February.
- Si, Steven X. & Bruton, Garry D., 2005. "Knowledge acquisition, cost savings, and strategic positioning: effects on Sino-American IJV performance," Journal of Business Research, Elsevier, vol. 58(11), pages 1465-1473, November.
- Inkpen, Andrew, 1998. "Learning, knowledge acquisition, and strategic alliances," European Management Journal, Elsevier, vol. 16(2), pages 223-229, April.
- 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.
- Oxley, Joanne E, 1997. "Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach," Journal of Law, Economics and Organization, Oxford University Press, vol. 13(2), pages 387-409, October.
- Contractor, Farok J. & Ra, Wonchan, 2002. "How knowledge attributes influence alliance governance choices: A theory development note," Journal of International Management, Elsevier, vol. 8(1), pages 11-27.
- 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.
- Richard Williams, 2006. "Generalized ordered logit/partial proportional odds models for ordinal dependent variables," Stata Journal, StataCorp LP, vol. 6(1), pages 58-82, March.
- Contractor, F. J. & Lorange, P., 2002. "The growth of alliances in the knowledge-based economy," International Business Review, Elsevier, vol. 11(4), pages 485-502, August.
- Buckley, Peter J., 2009. "Internalisation thinking: From the multinational enterprise to the global factory," International Business Review, Elsevier, vol. 18(3), pages 224-235, June.
- McCarthy, Ian & Anagnostou, Angela, 2004. "The impact of outsourcing on the transaction costs and boundaries of manufacturing," International Journal of Production Economics, Elsevier, vol. 88(1), pages 61-71, March.
- Narasimhan, Ram & Nair, Anand, 2005. "The antecedent role of quality, information sharing and supply chain proximity on strategic alliance formation and performance," International Journal of Production Economics, Elsevier, vol. 96(3), pages 301-313, June.
- Mehmet Demirbag & Keith W. Glaister, 2010. "Factors Determining Offshore Location Choice for R&D Projects: A Comparative Study of Developed and Emerging Regions," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1534-1560, December.
- Hagedoorn, John, 2002. "Inter-firm R&D partnerships: an overview of major trends and patterns since 1960," Research Policy, Elsevier, vol. 31(4), pages 477-492, May.
- Jongwook Kim & Joseph T. Mahoney, 2005. "Property rights theory, transaction costs theory, and agency theory: an organizational economics approach to strategic management," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 223-242.
- McIvor, R. & Humphreys, P., 2004. "Early supplier involvement in the design process: lessons from the electronics industry," Omega, Elsevier, vol. 32(3), pages 179-199, June.
When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:144:y:2013:i:1:p:256-267. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.