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How does concurrent sourcing affect performance?

Niels Peter Mols (School of Economics and Management, University of Aarhus, Aarhus, Denmark)

Journal of Business & Industrial Marketing

ISSN: 0885-8624

Article publication date: 24 August 2010

1923

Abstract

Purpose

“Concurrent sourcing” is a term used by Parmigiani to describe the phenomenon where a firm simultaneously buys and makes the same good or service. The purpose of this paper is to develop propositions that suggest how concurrent sourcing affects performance.

Design/methodology/approach

Based on transaction cost, agency, neoclassical economic, knowledge‐based, and resource‐based theory, it is proposed to show how concurrent sourcing affects performance.

Findings

The paper argues that concurrent sourcing improves performance when firms face a combination of volume uncertainty, technological uncertainty, performance uncertainty, non‐decomposability, transaction‐specific investments, and strong internal and external capabilities.

Research limitations/implications

The paper maps the relationships between concurrent sourcing and performance and discusses how these relationships can be modelled. The propositions and discussion offer researchers a starting‐point for further research.

Practical implications

The propositions that are developed suggest that managers should consider using concurrent sourcing when they face problems caused by volume uncertainty, technological uncertainty, performance uncertainty, non‐decomposability, and asset specificity. Concurrent sourcing can also be a way to exploit both strong internal capabilities and external suppliers' strong capabilities.

Originality/value

The main contribution is a number of propositions, explanations, and discussions regarding how concurrent sourcing affects performance of the market and the hierarchy.

Keywords

Citation

Mols, N.P. (2010), "How does concurrent sourcing affect performance?", Journal of Business & Industrial Marketing, Vol. 25 No. 7, pp. 525-534. https://doi.org/10.1108/08858621011077754

Publisher

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Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited

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