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Dynamics of Outsourcing in Industrial Clusters: a Study of the Gujrat Fan Industry in Pakistan

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  • Arif Iqbal Rana
  • Jawaid Abdul Ghani

Abstract

Firms in industrial clusters outsource extensively. Factors influencing outsourcing de cisions are reviewed in the context of industrial clusters, characterized by high levels of specialization, low transaction costs, and technology diffusion. A framework for mak ing outsourcing decisions is developed and illustrated using a case study of outsourcing practices in the Gujrat fan cluster. Core competencies, together with outsourcing prac tices, were found to vary according to the size of the manufacturing firm. Given the extremely low cost of conducting transactions and the presence of highly specialized and efficient vendors, the decision that core activities should be retained and devel oped in-house is the key to survival in clusters.

Suggested Citation

  • Arif Iqbal Rana & Jawaid Abdul Ghani, 2004. "Dynamics of Outsourcing in Industrial Clusters: a Study of the Gujrat Fan Industry in Pakistan," Asian Journal of Management Cases, , vol. 1(1), pages 7-24, January.
    • Handle: RePEc:sae:anjomc:v:1:y:2004:i:1:p:7-24
    DOI: 10.1177/097282010400100103
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    References listed on IDEAS

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