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Environmental uncertainty and cross-buying in logistics outsourcing arrangements: a resource dependence perspective

Adriana Rossiter Hofer (Department of Supply Chain Management, University of Arkansas, Fayetteville, Arkansas, USA)
Yao Henry Jin (Department of Management, Miami University, Oxford, Ohio, USA)
A. Michael Knemeyer (Department of Marketing and Logistics, The Ohio State University, Columbus, Ohio, USA)

International Journal of Physical Distribution & Logistics Management

ISSN: 0960-0035

Article publication date: 24 December 2020

Issue publication date: 2 April 2021

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Abstract

Purpose

This study follows the tenets of the resource dependence theory (RDT) to investigate the effects of four dimensions of industry-level environmental uncertainty – munificence, dynamism, complexity and innovative intensity – on a shipper's cross-buying (i.e. outsourcing across multiple service categories) in logistics outsourcing arrangements.

Design/methodology/approach

Negative binomial regression was used to test the hypotheses with a sample of US manufacturers. Measures were developed through information acquired from a proprietary database of 3PL companies obtained through Armstrong and Associates, Inc. and publicly available industry measures from the US Manufacturing Census and Compustat.

Findings

The findings indicate that individual dimensions of environmental uncertainty exhibit distinct influences on shippers' cross-buying in their logistics outsourcing arrangements. Specifically, the growth and initial innovative intensity of shippers' industries lead to an increased number of logistics service categories outsourced to 3PLs, while industry dynamism and exceptionally high innovative intensity drive the opposite effect.

Practical implications

These findings provide valuable guidance to 3PLs with respect to decisions related to the acquisition of specialized transportation, storage, information systems and personnel assets to serve specific industries. The findings highlight industry conditions that are more likely to lead shippers to outsource across a wider array of logistics service categories and, as a result, potentially yield higher customer retention and profit margins.

Originality/value

While extant 3PL literature posits that shippers' individual strategic orientations and capabilities impact their outsourcing strategy, this study contributes to the literature by providing a theoretical-based empirical examination of the industry-level influencers of such behavior.

Keywords

Acknowledgements

The authors are indebted to Armstrong & Associates, Inc. for kindly providing access to the Who's Who in Logistics database. This study would not have been possible without their support. The authors would also like to thank the Editor, Dr. Chee Yew Wong, and the anonymous reviewers for the thoughtful and constructive insights throughout the review process.

Citation

Hofer, A.R., Jin, Y.H. and Knemeyer, A.M. (2021), "Environmental uncertainty and cross-buying in logistics outsourcing arrangements: a resource dependence perspective", International Journal of Physical Distribution & Logistics Management, Vol. 51 No. 3, pp. 236-258. https://doi.org/10.1108/IJPDLM-04-2019-0121

Publisher

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Emerald Publishing Limited

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