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Many manufacturing firms (e.g. Apple and Nike) now outsource some or all of their manufacturing activities to independent suppliers rather than continuing to undertake…
Many manufacturing firms (e.g. Apple and Nike) now outsource some or all of their manufacturing activities to independent suppliers rather than continuing to undertake them in-house. Clearly these firms perceive this externalisation of production to be a performance-enhancing strategy, but what are the performance consequences in practice? In this chapter, we review and critique the extant academic literature on the performance consequences of manufacturing outsourcing, and note that the empirical findings have yielded mixed results. We argue that outsourcing has potential impacts upon a number of ‘performance’ outcomes, including inter alia financial performance, productivity/efficiency, sales/market share, costs of production, business performance and innovation. We further argue that many of the empirical studies have flawed designs, and make a series of methodological recommendations to guide future empirical work.
Despite servitization being widely regarded as an essential catalyst to improve manufacturing firms' survival and competitiveness, how to attain servitization remains…
Despite servitization being widely regarded as an essential catalyst to improve manufacturing firms' survival and competitiveness, how to attain servitization remains debatable. The primary objective of this research is to explore whether or not, how, and when the dynamic capabilities affect servitization in the digital economy background. This research investigates the relationships between servitization and dynamic capabilities by incorporating firm ownership, firm lifecycle stage, digital economy level and environmental uncertainty as contingency factors in the research framework.
This research develops and verifies a conceptual framework for manufacturing servitization by employing the fuzzy-set qualitative comparative analysis (fsQCA) in analyzing the secondary longitudinal data from 148 China-listed manufacturing firms involved in servitization from 2015 to 2020.
The analytical results of fsQCA identify several configurational solutions for the success of manufacturing servitization. Each factor can be an enabler for servitization success despite none of the factors discovered as an absolute condition. Manufacturing servitization success within the digital economy depends on the interactions between dynamic capabilities and contingency factors such as digital economy level, environmental uncertainty, firm ownership, and lifecycle stage.
All of the construct's measurements in this research adopt secondary data, and further investigation calls for primary data (e.g. survey) for higher validity.
This research extends the current view of servitization by proposing an integrative conceptual framework, allowing manufacturing servitization to be examined more pertinently and comprehensively. Second, the research is an initial attempt that adopts fsQCA in servitization studies. The study sheds light on the mechanisms of attaining servitization by revealing the importance of dynamic capabilities and their interactions with the contingency factors. Third, the research extends the application scopes of dynamic capability theory, firm lifecycle theory, contingency theory, and institutional theory. Fourth, the research findings enrich the understanding of servitization in the digital economy and give business practitioners insights on leveraging dynamic capabilities in different conditions to attain successful servitization under the current circumstances.