IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v44y2009i3p217-224.html
   My bibliography  Save this article

Governance decisions for the offshore outsourcing of new product development in technology intensive markets

Author

Listed:
  • Griffith, David A.
  • Harmancioglu, Nukhet
  • Droge, Cornelia

Abstract

This study addresses how buyers organize their offshore outsourcing new product development relationships. Building on transaction cost economics and resource dependence theories, we propose a model of the influence of key new product development offshore outsourcing factors on two important buyers' governance decisions (i.e., supply concentration and degree of supplier involvement). The antecedents, drawn from the marketing, management, and international business literatures, include: three sources of asset specificity (degree of modularity, strategic value of the project, and technology specificity) and two sources of uncertainty (cultural distance and technological discontinuity). The results, derived from an analysis of 200 offshore outsourcing new product development relationships, provide new insights for academics and practitioners.

Suggested Citation

  • Griffith, David A. & Harmancioglu, Nukhet & Droge, Cornelia, 2009. "Governance decisions for the offshore outsourcing of new product development in technology intensive markets," Journal of World Business, Elsevier, vol. 44(3), pages 217-224, July.
  • Handle: RePEc:eee:worbus:v:44:y:2009:i:3:p:217-224
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090951608000552
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    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. Mathews, John A. & Cho, Dong-Sung, 1999. "Combinative capabilities and organizational learning in latecomer firms: the case of the Korean semiconductor industry," Journal of World Business, Elsevier, vol. 34(2), pages 139-156, July.
    2. Oded Shenkar, 2001. "Cultural Distance Revisited: Towards a More Rigorous Conceptualization and Measurement of Cultural Differences," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 519-535, September.
    3. Ron Sanchez, 1995. "Strategic flexibility in product competition," Strategic Management Journal, Wiley Blackwell, vol. 16(S1), pages 135-159.
    4. 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.
    5. Kolbe, Richard H & Burnett, Melissa S, 1991. "Content-Analysis Research: An Examination of Applications with Directives for Improving Research Reliability and Objectivity," Journal of Consumer Research, Oxford University Press, vol. 18(2), pages 243-250, September.
    6. Keith D Brouthers, 2002. "Institutional, Cultural and Transaction Cost Influences on Entry Mode Choice and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 203-221, June.
    7. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(3), pages 411-432, September.
    8. Masaaki Kotabe & Janet Y Murray, 1990. "Linking Product and Process Innovations and Modes of International Sourcing in Global Competition: A Case of Foreign Multinational Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 21(3), pages 383-408, September.
    9. David J Sharp & Stephen B Salter, 1997. "Project Escalation and Sunk Costs: A test of the International Generalizability of Agency and Prospect Theories," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(1), pages 101-121, March.
    10. Erin Anderson, 1985. "The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis," Marketing Science, INFORMS, vol. 4(3), pages 234-254.
    11. Laszlo Tihanyi & David A Griffith & Craig J Russell, 2005. "The effect of cultural distance on entry mode choice, international diversification, and MNE performance: a meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 270-283, May.
    12. Shantanu Dutta & Allen M. Weiss, 1997. "The Relationship Between a Firm's Level of Technological Innovativeness and Its Pattern of Partnership Agreements," Management Science, INFORMS, vol. 43(3), pages 343-356, March.
    13. Raghu Garud & Arun Kumaraswamy, 1993. "Changing competitive dynamics in network industries: An exploration of sun microsystems' open systems strategy," Strategic Management Journal, Wiley Blackwell, vol. 14(5), pages 351-369, July.
    14. Bruce Kogut & Nalin Kulatilaka, 1994. "Operating Flexibility, Global Manufacturing, and the Option Value of a Multinational Network," Management Science, INFORMS, vol. 40(1), pages 123-139, January.
    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. Albertoni, Filippo & Elia, Stefano & Massini, Silvia & Piscitello, Lucia, 2017. "The reshoring of business services: Reaction to failure or persistent strategy?," Journal of World Business, Elsevier, vol. 52(3), pages 417-430.
    2. Srivastava, Saurabh & Singh, Shiwangi & Dhir, Sanjay, 2020. "Culture and International business research: A review and research agenda," International Business Review, Elsevier, vol. 29(4).
    3. Weng, David H. & Peng, Mike W., 2018. "Home bitter home: How labor protection influences firm offshoring," Journal of World Business, Elsevier, vol. 53(5), pages 632-640.
    4. Michael A Sartor & Paul W Beamish, 2018. "Host market government corruption and the equity-based foreign entry strategies of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(3), pages 346-370, April.
    5. Zahoor, Nadia & Khan, Zaheer & Shenkar, Oded, 2023. "International vertical alliances within the international business field: A systematic literature review and future research agenda," Journal of World Business, Elsevier, vol. 58(1).
    6. Thakur-Wernz, Pooja & Bruyaka, Olga & Contractor, Farok, 2020. "Antecedents and relative performance of sourcing choices for new product development projects," Technovation, Elsevier, vol. 90.
    7. Steven Dahlquist & David Griffith, 2015. "A framework for the formation of governance portfolios in international interfirm marketing collaborations," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 5(1), pages 45-59, June.
    8. Ju, Min & Murray, Janet Y. & Gao, Gerald Yong & Kotabe, Masaaki, 2019. "Concurrent sourcing strategy of multinational firms in China: Drivers and performance implications," Journal of World Business, Elsevier, vol. 54(6), pages 1-1.
    9. Steven H. Dahlquist & David A. Griffith, 2015. "A framework for the formation of governance portfolios in international interfirm marketing collaborations," AMS Review, Springer;Academy of Marketing Science, vol. 5(1), pages 45-59, June.
    10. Xiaoqing Li & Yu Zheng & Catherine L. Wang, 2016. "Inter-firm collaboration in new product development in Chinese pharmaceutical companies," Asia Pacific Journal of Management, Springer, vol. 33(1), pages 165-193, March.
    11. Martinez-Noya, Andrea & Garcia-Canal, Esteban & Guillen, Mauro F., 2012. "International R&D service outsourcing by technology-intensive firms: Whether and where?," Journal of International Management, Elsevier, vol. 18(1), pages 18-37.
    12. Hitt, Michael A. & Li, Dan & Xu, Kai, 2016. "International strategy: From local to global and beyond," Journal of World Business, Elsevier, vol. 51(1), pages 58-73.
    13. 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.
    14. Athreye, Suma & Batsakis, Georgios & Singh, Satwinder, 2016. "Local, global, and internal knowledge sourcing: The trilemma of foreign-based R&D subsidiaries," Journal of Business Research, Elsevier, vol. 69(12), pages 5694-5702.
    15. George O. White & Orhun Guldiken & Thomas A. Hemphill & Wu He & Mehdi Sharifi Khoobdeh, 2016. "Trends in International Strategic Management Research From 2000 to 2013: Text Mining and Bibliometric Analyses," Management International Review, Springer, vol. 56(1), pages 35-65, February.
    16. Nukhet Harmancioglu & Stefan Wuyts & Peren Ozturan, 2021. "Governance implications of modularity in sourcing relationships," Journal of the Academy of Marketing Science, Springer, vol. 49(3), pages 601-625, May.
    17. Xu, Kai & Hitt, Michael A. & Brock, David & Pisano, Vincenzo & Huang, Lulu S.R., 2021. "Country institutional environments and international strategy: A review and analysis of the research," Journal of International Management, Elsevier, vol. 27(1).
    18. Li, Yi & Zhang, Banruo & Fan, Di & Li, Zijie, 2021. "Digital media, control of corruption, and emerging multinational enterprise’s FDI entry mode choice," Journal of Business Research, Elsevier, vol. 130(C), pages 247-259.
    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.

    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. Del Bosco, Barbara & Cristina Bettinelli, 2020. "How Do Family SMEs Control Their Investments Abroad? The Role of Distance and Family Control," Management International Review, Springer, vol. 60(1), pages 1-35, February.
    2. Anna Marie Dyhr Ulrich & Svend Hollensen & Britta Boyd, 2014. "Entry Mode Strategies into the Brazil, Russia, India and China (BRIC) Markets," Global Business Review, International Management Institute, vol. 15(3), pages 423-445, September.
    3. Xanthippe Adamoglou & Dimitris Kyrkilis, 2020. "MNEs Entry Strategies through a Distance Framework: A New Perspective," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 70(3-4), pages 83-105, July-Dece.
    4. Seok Jin Ko, 2019. "The Differing Foreign Entry Mode Choices for Sales and Production Subsidiaries of Multinational Corporations in the Manufacturing Industry," Sustainability, MDPI, vol. 11(15), pages 1-18, July.
    5. de Jong, Gjalt & van Houten, Jerry, 2014. "The impact of MNE cultural diversity on the internationalization-performance relationship," International Business Review, Elsevier, vol. 23(1), pages 313-326.
    6. Weber, Clarissa E. & Chahabadi, Dominik & Maurer, Indre, 2020. "Antecedents and performance effect of managerial misperception of institutional differences," Journal of World Business, Elsevier, vol. 55(1).
    7. García-Muiña, Fernando E. & Romero-Martínez, Ana M. & Kabbara, Diala, 2020. "Does religion influence location choice in the hotel industry?," International Business Review, Elsevier, vol. 29(2).
    8. Trąpczyński, Piotr & Halaszovich, Tilo F. & Piaskowska, Dorota, 2020. "The role of perceived institutional distance in foreign ownership level decisions of new MNEs," Journal of Business Research, Elsevier, vol. 108(C), pages 435-449.
    9. Cristina López-Duarte & Marta M. Vidal-Suárez & Belén González-Díaz & Nuno Rosa Reis, 2016. "Understanding the relevance of national culture in international business research: a quantitative analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 108(3), pages 1553-1590, September.
    10. Youngok Kim & Sidney Gray, 2009. "An assessment of alternative empirical measures of cultural distance: Evidence from the Republic of Korea," Asia Pacific Journal of Management, Springer, vol. 26(1), pages 55-74, March.
    11. Ana M. Romero-Martínez & Fernando E. García-Muiña & Agnieszka Chidlow & Jorma Larimo, 2019. "Formal and Informal Institutional Differences Between Home and Host Country and Location Choice: Evidence from the Spanish Hotel Industry," Management International Review, Springer, vol. 59(1), pages 41-65, February.
    12. Hernández, Virginia & Nieto, María Jesús, 2015. "The effect of the magnitude and direction of institutional distance on the choice of international entry modes," Journal of World Business, Elsevier, vol. 50(1), pages 122-132.
    13. Chikhouni, Abdulrahman & Edwards, Gwyneth & Farashahi, Mehdi, 2017. "Psychic distance and ownership in acquisitions: Direction matters," Journal of International Management, Elsevier, vol. 23(1), pages 32-42.
    14. Hitt, Michael A. & Li, Dan & Xu, Kai, 2016. "International strategy: From local to global and beyond," Journal of World Business, Elsevier, vol. 51(1), pages 58-73.
    15. Sjoerd Beugelsdijk & Björn Ambos & Phillip C Nell, 2018. "Conceptualizing and measuring distance in international business research: Recurring questions and best practice guidelines," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(9), pages 1113-1137, December.
    16. Sangcheol Song, 2014. "Entry mode irreversibility, host market uncertainty, and foreign subsidiary exits," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 455-471, June.
    17. Dow, Douglas & Ferencikova, Sonia, 2010. "More than just national cultural distance: Testing new distance scales on FDI in Slovakia," International Business Review, Elsevier, vol. 19(1), pages 46-58, February.
    18. Caterina Moschieri & Roberto Ragozzino & Jose Manuel Campa, 2014. "Does Regional Integration Change the Effects of Country-Level Institutional Barriers on M&A? The Case of the European Union," Management International Review, Springer, vol. 54(6), pages 853-877, December.
    19. Rosalie L Tung & Günter K Stahl, 2018. "The tortuous evolution of the role of culture in IB research: What we know, what we don’t know, and where we are headed," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(9), pages 1167-1189, December.
    20. Shi, Wei & Tang, Yinuo, 2015. "Cultural similarity as in-group favoritism: The impact of religious and ethnic similarities on alliance formation and announcement returns," Journal of Corporate Finance, Elsevier, vol. 34(C), pages 32-46.

    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:eee:worbus:v:44:y:2009:i:3:p:217-224. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

    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.