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The purpose of this paper is to consider the management of hazards arising from the make-buy choice in the face of radical technological change. This sourcing choice can lead to distinctive exchange and hierarchical hazards. This study’s main interest is in investigating the research question “How can firms reduce those distinctive exchange and hierarchical hazards arising from the make-buy sourcing strategy when dealing with radical technological change?”

The author develops hypotheses that the in-house retention of outsourced component knowledge will likely reduce exchange hazards arising from the buy strategy choice. And prior exploratory technological experience will likely reduce hierarchical hazards arising from the make strategy choice. The author explores the US mountain bicycle industry from 1980 to 1992 to test the developed hypotheses. For endogeneity arising from the make-buy sourcing decision, the author uses Heckman’s two-stage switching regression model.

The major findings are that the in-house retention of outsourced component knowledge and prior exploratory technological experience is distinctive moderating factors improving performance of a buy strategy and a make strategy, respectively.

Since the extant literature tends to focus on which of the two sourcing strategies provides the greatest performance advantages in the face of radical technological change, there is a strong implication to suggest that if a firm performs poorly with one sourcing decision, the firm should switch to an alternative one. Different from the expositions of the literature, this study elevates the understanding regarding how firms can improve the performance of their current sourcing orientation rather than whether they should switch from one sourcing strategy to another.

Illustrates that the make or buy is a strategic decision and has implications for the overall corporate strategy of the organization by describing a model which involves analysing a number of strategic factors. In recent years, many companies have been moving significantly away from “making” towards “buying”. However, research has revealed that make or buy decisions are rarely taken within a thoroughly strategic perspective. It has been shown that many firms adopt a short‐term perspective and are motivated primarily by the search for short‐term cost reductions. It is argued that make or buy decisions are made most frequently by default with little consideration for the long‐run competitiveness of the organization. Presents an outline of three key problems encountered by companies in their efforts to formulate an effective make or buy decision to illustrate the weaknesses in current make or buy practice. The make or buy model described in this article attempts to overcome these problems by offering an organization a conceptual framework to follow in the sourcing decision.

The purpose of this paper is to investigate the behavioral tendencies of supply managers when they are faced with uncertainty in making multi-tier sourcing decisions.

This paper uses the literature on multi-tier supply chains and behavioral decision making to develop a theoretical framework for examining factors influencing a supply manager’s decision to retain control over sourcing in the multi-tier context. An experimental vignette methodology is used to gather data from 259 supply managers.

Results suggest that supply managers choose to exert less multi-tier control when they have high levels of interpersonal trust in the tier-1 supplier’s sales representative. This effect is accentuated by a high level of familiarity with potential lower-tier suppliers. Under high levels of familiarity with potential lower-tier suppliers, supply managers will exert greater levels of multi-tier sourcing control as the behavioral uncertainty of the tier-1 supplier increases.

Buying firms can enhance their understanding of supply managers’ multi-tier sourcing decision making and the potential biases associated with it. Suggestions for a more effective use of multi-tier sourcing are provided in the Discussion section.

Multi-tier sourcing is an increasingly important area of research, and this paper is the first to examine individual supply managers’ behavioral decision making in the multi-tier context. This paper also contributes to the outsourcing literature by investigating behavioral factors influencing the outsourcing of sourcing activities.

The recent attention to purchasing decisions in a variety of commercial and government contexts has grown much faster than detailed understanding of how sourcing decisions are made and their implications for organisations. This paper provides an overview of empirical research into sourcing decisions made in UK and Swiss organisations and will be of international interest to practitioners and academics in both purchasing and marketing. The research demonstrates in both countries that sourcing decisions are highly contingent situations and the variable is policy.

This paper aims to present a strategic framework for make‐or‐buy (MoB) decision‐making process and a case study based on the framework. This framework can be applied to all the scenarios of MoB decision‐making that includes making decisions for new components and reevaluating the decisions for presently in‐sourced or outsourced components.

Based on this study of an Indian Automobile Company and review of the literature the paper proposes a strategic framework for MoB decision‐making. Unlike previous academic attempts, where a framework is developed first based on the existing theories followed by illustration through case studies, our approach starts with a case study, the paper then proposes a framework that best suits the company's need. Later the paper discusses the specific features of the framework that makes it applicable to other manufacturing sectors.

The sourcing decision‐making for any firm is a complex and dynamic process where, after stipulated period firms have to reevaluate their decisions. Existing frameworks treat both fresh and reevaluated decisions alike. It is found that the need for a framework with separate provision for outsourcing decision reevaluation. The paper identifies partial outsourcing as a strategic option to avoid supplier opportunism. It also explicitly suggests the exact decision point where risk evaluation is necessary during MoB decision‐making process.

The proposed framework takes a detailed and critical look at actual outcomes in terms of costs, competences and risk. Three important considerations adopted from the literature and incorporated in the proposed framework, makes it unique: provision for reevaluating the MoB decision, consideration of partial outsourcing as a strategic option other than purely making or buying, identification of decision points where risk evaluation is necessary.

The purpose of this paper is to develop taxonomy of sourcing decision-making (SDM) archetypes and explore how different contextual factors influence these archetypes when global sourcing of complex components is considered a viable option.

A multiple case study approach with five in-depth cases is employed. In total, 19 interviews as well as publicly available and internal data from large buying firms headquartered in Austria and Germany were collected and analyzed.

The results reveal three different SDM archetypes which are described in detail (i.e. “consensus,” “argumentation” and “cabal”). Furthermore, it is found that these archetypes are mainly influenced by three contextual factors: sourcing maturity, product complexity and leadership style. The final model comprises six propositions which illustrate how these contextual factors determine companies’ SDM archetypes.

The study contributes to theory development at the intersection of organizational buying behavior and the (global) SDM literature. Thereby, it answers the call for more rigorous investigation of the influence of contextual factors on SDM processes.

The findings enable practitioners to better understand and consequently manage SDM processes and their outcomes. By supporting decision-makers in identifying SDM archetypes, this study allows sourcing managers and teams to make better decisions by avoiding problems that occur in situations in which the preferred decision-making type would result in suboptimal decisions.

The study provides a first step toward taxonomy of SDM archetypes and is among the first that explores their underlying contextual factors.

The purpose of this paper is to investigate a case of in‐sourcing a key resource verses using the standard mode of operation of utilizing an established out‐sourcing firm. The studied organisation is a large telecommunication firm in North America. The aim of the paper is to illustrate how a new approach to the organisational procurement decision making process to facilitate competitive advantage was influenced by simplicity rather than simple cost reduction.

Single illustrative case study testing the usefulness of the composite out‐sourcing decision framework decision making framework together with a clear focus on total value adding elements of service delivery.

The analysis that in‐sourcing critical tasks or processes are advantageous to the case study organization as well as to the smaller internal department that it directly impacts.

When undertaking business projects or programs of projects, there are many cases where business processes may be outsourced or sub‐contracted. While out‐sourcing does, and will in the future, play a large role in cost reduction and giving the buying firm the ability to focus on core competencies, there is still the niche market to in‐source critical tasks and retain critical resources. Decisions need to be based on value contribution rather than simple cost reduction.

This paper's value has been to illustrate some frameworks, tools and techniques used to explain how a particular insourcing/outsourcing decision was undertaken in a business project context and it explains the rationale behind decisions being made.

The objective of this paper is to present how two Swedish companies work, or plan to work, with sourcing decisions. The aim is furthermore to analyze if their decision process, or parts of it, can be used as a base for building a rightsourcing decision model. In this paper rightsourcing is defined as; “the process to actively apply in‐and outsourcing strategically to be competitive now and in the future”.

Since the business environment is dynamic and the global aspects are increasing, companies tend to focus on what they do best‐their core competence. The concept of outsourcing has, therefore, been growing rapidly during the last decade. Many companies seem to have a vague understanding about the risks and benefits of outsourcing, except from a general idea that it will reduce cost. Many companies hence experience that sourcing decisions are complex and the need for a model supporting sourcing decision exist within many corporations. This is accomplished through a literature overview and a multiple case study.

The results indicate that a model for sourcing decisions ought to include, or be based on, following aspects, e.g. the companies overall strategy, the companies core competence, both qualitative and quantitative data and risk analysis. The sourcing process also ought to be made with a process approach, avoiding functional sub‐optimization. The results also indicated that financial evaluation and documentation of the decision is important.

The multiple case study was conducted in one mechanical company and one engineering company from Sweden. The fact that the study only included two studies could affect the possibility to generalize the result.

This paper offers help to companies that consider sourcing decisions.

The purpose of this paper is to investigate the nature of functional involvement in the cross‐functional make or buy decision process.

The paper is based on literature within the areas of cross‐functional make or buy decision processes as well as cross‐functional process research in general. The empirical part of the paper is a longitudinal and in‐depth case study, where the data are collected using interviews, documentation and observations. The data are analyzed using chronological patterns.

Findings indicate a changing pattern between close collaborative integration during decision‐making phases and more interaction‐focused integration during data‐gathering phases. The benefits of this integration pattern mainly lay in the effective use of resources combined with increased decision quality.

The results are based on a large manufacturing company that produces complex products. It can be suggested that the scene researched by the authors may be common for companies in the same environment. However, it is a limited sample and future research would benefit from investigating different environments to establish whether the results are context‐specific or not.

Five phases are found in the make or buy decision process where resources are used differently. Also, different functions have different roles during these phases in order not to drain resources.

The paper helps clarify how functions integrate and use resources during different phases of the make or buy decision process and the cross‐functional benefits and effects. A conceptual model is developed that explains the effect of functional involvement during different types of integration.

The make‐or‐buy question represents a fundamental dilemma faced by many companies. Companies have finite resources and cannot always afford to have all manufacturing technologies in‐house. This has resulted in an increasing awareness of the importance of make‐or‐buy decisions. This paper reports on the development of a make‐or‐buy framework to address the make‐or‐buy decision for either a specific individual part or family of parts. Firstly, a literature review of the principal make‐or‐buy approaches is discussed. Secondly, the development of a make‐or‐buy framework is described and the framework is explained and illustrated using case studies. Thirdly, the operationalisation of the framework is outlined. The paper concludes with a discussion of its contribution to both the academic understanding of the subject, and the improvement of industrial practice.