Outsourcing, subcontracting-in and radical innovativeness: The moderating effect of manufacturing strategy

Abstract

Purpose

The authors aim to develop and test hypotheses that link outsourcing and subcontracting-in activities of small high-tech firms to their radical innovativeness. In addition, they seek to investigate how a firm's strategy moderates the associations between their outsourcing and subcontracting-in activities and radical innovativeness.

Design/methodology/approach

The authors utilized regression analytical technique and categorical moderation analytical technique to test their hypotheses on survey data of 579 firms.

Findings

Results show that outsourcing has a positive association with radical innovativeness. In contrast, subcontracting-in shows a negative association with radical innovativeness. Finally, the influence of both outsourcing and subcontracting-in activities on radical innovativeness are contingent upon a firm's manufacturing strategy.

Research limitations/implications

There are potential limitations relating to the authors' use of secondary data. There is a need to investigate the processes through which outsourcing and subcontracting-in relate to innovation performance.

Practical implications

An implication of this study is that in order to develop radical innovativeness, firms need to consider their strategic or competitive inclination when evaluating their outsourcing and subcontracting-in decisions and activities.

Social implications

There are also social implications since outsourcing and subcontracting-in activities involve social relationships.

Originality/value

Linking boundary spanning activities of firms to innovation performance represents a contribution to the literature. Further, establishing that the effectiveness of such boundary activities depends on a firm's specific manufacturing strategy represents a contribution.

Citation

Oke, A. and Onwuegbuzie, H. (2013), "Outsourcing, subcontracting-in and radical innovativeness: The moderating effect of manufacturing strategy", Journal of Manufacturing Technology Management, Vol. 24 No. 4, pp. 511-535. https://doi.org/10.1108/17410381311327387