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1 – 10 of 848The 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…
Abstract
Purpose
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?”
Design/methodology/approach
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.
Findings
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.
Originality/value
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.
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Robert K. Perrons, Matthew G. Richards and Ken Platts
The purpose of this investigation is to help establish: whether or not strong relationships between suppliers and customers improve performance; and if prescriptive frameworks on…
Abstract
Purpose of this paper
The purpose of this investigation is to help establish: whether or not strong relationships between suppliers and customers improve performance; and if prescriptive frameworks on outsourcing radical innovations are dependent on industry clockspeed.
Design/methodology/approach
A survey of UK‐based manufacturers, followed by a statistical analysis.
Findings
Long‐term supplier links seem not to play a role in the development of radical innovations. Moreover, industry clockspeed has no significant bearing on the success or failure of any outsourcing strategy for radically new technologies.
Research limitations/implications
Literature about outsourcing in the face of radical innovation can be more confidently applied to industries of all clockspeeds.
Practical implications
Prescriptions for fast clockspeed industries should be applied more broadly: all industries should maintain a high degree of vertical integration in the early days of a radical innovation.
Originality/value
Prior papers had explored whether or not a company should outsource radical innovations, but none had determined if this is equally true for slow industries and fast ones. Therein lies the original contribution of this paper.
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Robert K. Perrons and Ken Platts
Some research in the area of make‐buy decisions for new technologies suggests that it is a good idea for a company to pursue a fairly rigorous “make” policy in the early days of a…
Abstract
Some research in the area of make‐buy decisions for new technologies suggests that it is a good idea for a company to pursue a fairly rigorous “make” policy in the early days of a potentially disruptive innovation. Other studies prescribe exactly the opposite, promoting instead a “buy” strategy. Drawing from observations and lessons from the Prisoner's Dilemma, this paper seeks to bridge the gap between these perspectives by suggesting that both strategies are valid, but that they are most successfully applied in different market environments. The “make” prescription may be more suited to either extremely fast or extremely slow rates of technological change, while a “buy” strategy might be more appropriate in market sectors where technologies evolve at a medium pace. This paper highlights the importance of industry clockspeed and supplier relationships in make‐buy decisions for new technologies, and puts forward two new hypotheses that require empirical testing.
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Christopher L. Shook, Garry L. Adams, David J. Ketchen and Christopher W. Craighead
The goal of this paper is to provide a broad foundation for future research in the area of strategic sourcing.
Abstract
Purpose
The goal of this paper is to provide a broad foundation for future research in the area of strategic sourcing.
Design/methodology/approach
The foundation is derived by drawing from various well‐established organizational theories. Specifically, strategic sourcing was viewed from the perspective of institutional theory, resource dependence theory, network theory, systems theory, resource/knowledge‐based views of the firm, transaction cost economics, agency theory, strategic choice theory, sociocognitive theory, and critical theory.
Findings
By viewing strategic sourcing through the lens of ten organizational theories, this research provides multiple insights into many interrelated strategic sourcing questions, such as when to make, buy or ally, how many and which suppliers, and how to manage sourcing relationships. The paper offers a rich and diverse foundation to foster future theory‐building activities in sourcing and supply management research.
Originality/value
While some of these theory bases have been utilized, to some degree, in the supply management research, the paper offers a more holistic perspective of theoretical insights for strategic sourcing. Each of these organizational theories could be utilized as a foundation for future studies. Further, the paper offers competing and/or complementary theory bases to enhance possible insights into many strategic sourcing questions such as when to make, buy or ally.
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Haruna Babatunde Jaiyeoba, Moha Asri Abdullah and Abdul Razak Dzuljastri
This paper aims to ascertain whether halal certification mark, halal brand quality and halal awareness influence Nigerian consumers when making buying decisions.
Abstract
Purpose
This paper aims to ascertain whether halal certification mark, halal brand quality and halal awareness influence Nigerian consumers when making buying decisions.
Design/methodology/approach
The researchers reflect on the newly collected data to shed light on the above issues from the perspective of Nigerian consumers. To this end, a questionnaire was developed and used to collect data from 282 respondents. The data collected were analyzed using both descriptive and inferential statistics.
Findings
This study found that halal certification mark and halal brand quality are the most influential factors that contributed to the consumers’ buying decisions in Nigeria.
Originality/value
Based on the findings of this study, the researchers have argued that more efforts are needed in the area of halal awareness in Nigeria. Similarly, the study argues that halal brand quality should always be held at the esteemed position. Based on the study’s findings, the authors have been able to fill the literature gap, particularly in the context of the Nigerian halal industry.
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The purpose of this study is to investigate the efficacy and impact of effectual logic used by owner-managers of established micro firms when making buying decisions.
Abstract
Purpose
The purpose of this study is to investigate the efficacy and impact of effectual logic used by owner-managers of established micro firms when making buying decisions.
Design/methodology/approach
Semi-structured interviews were conducted with 13 owner-managers of micro firms, concerning their decision-making processes when selecting suppliers. Interviews were transcribed verbatim, then analysed thematically.
Findings
This study contributes to the literature in respect of effectuation by considering its use by a micro firm owner-manager to develop relationships with trusted suppliers. The findings suggest effectuation positively promotes flexibility and reduces loss potential, thus positively affecting the price that the owner-manager is willing to pay. Furthermore, it also appears to necessitate effectual selling, with an ongoing iterative process, in which effectual selling leads to effectual buying. In contrast to extant literature, this study suggests that application of effectual logic to buying and selling decisions, by a micro firm owner-manager can create, rather than reduce, uncertainty.
Research limitations/implications
This study is based on single interviews with a sample of owner-managers of micro firms that operate within the same industry and within a single country. The subjective nature of qualitative research, homogeneity and size of sample may prevent generalisation of the findings.
Practical implications
Effectual buying and selling appears to provide a micro firm with the ability to engage with flexible suppliers so as to offer a heterogeneous array of products and services to its customers, thus promoting sales success. Yet, the lack of homogeneity of customer needs and need for supplier flexibility may lead to overall costs being greater than those that could be achieved if the micro firm specialised in a smaller range of products and services and developed internal resources to meet the needs of its customers.
Originality/value
In contrast to extant literature that states that effectuation is a way to reduce uncertainty to a level at which a decision can be made, this study suggests that continual use of effectual logic by owner-managers of micro firms when making buying and selling decisions can instead create more uncertainty in the longer term.
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Robert K. Perrons and Ken Platts
To determine whether or not clockspeed is an important variable in outsourcing strategies throughout the development of radical innovations.
Abstract
Purpose
To determine whether or not clockspeed is an important variable in outsourcing strategies throughout the development of radical innovations.
Design/methodology/approach
An internet‐based survey of manufacturing firms from all over the world.
Findings
An industry's clockspeed does not play a significant role in the success or failure of a particular outsourcing strategy for a radical innovation.
Research limitations/implications
Conclusions from earlier research in this area are not necessarily industry‐specific.
Practical implications
Lessons learned via previous investigations about the computer industry need not be confined to that sector. Vertical integration may be a more robust outsourcing strategy when developing a radical innovation in industries of all clockspeeds.
Originality/value
Previous research efforts in this field focused on a single technology jump, but this approach may have overlooked a potentially important variable: industry clockspeed. Thus, this investigation explores whether clockspeed is an important factor.
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John K Shank, William C Lawler and Lawrence P Carr
An important management topic across a wide spectrum of firms is reconfiguring the value delivery system – defining the boundaries of the firm. Profit impact should be the way any…
Abstract
An important management topic across a wide spectrum of firms is reconfiguring the value delivery system – defining the boundaries of the firm. Profit impact should be the way any value chain configuration is evaluated. The managerial accounting literature refers to this topic as “make versus buy” and typically addresses financial impact without much attention to strategic issues. The strategic management literature refers to the topic as “level of vertical integration” and typically sees financial impact in broad “transaction cost economics” terms. Neither approach treats fully the linkages all along the causal chain from strategic actions to resulting profit impact. In this paper we propose a theoretical approach to explicitly link supply chain reconfiguration actions to their profit implications. We use the introduction by Levi Strauss of Personal Pair™ jeans to illustrate the theory, evaluating the management choices by comparing profitability for one pair of jeans sold through three alternative value delivery systems. Our intent is to propose a theoretical extension to the make/buy literature which bridges the strategic management literature and the cost management literature, using A-P-L and SCM, and to illustrate one application of the theory.
Andrew H. Chen, James A. Conover and John W. Kensinger
Perhaps the most difficult objection raised by skeptics of the real options approach concerns the apparent lack of market transactions that would verify that real options have…
Abstract
Perhaps the most difficult objection raised by skeptics of the real options approach concerns the apparent lack of market transactions that would verify that real options have actual value. Although there are no organized exchanges with publicly disclosed prices, there are nevertheless several mechanisms for buying and selling real options. Observing these could offer important advantages in the quest for enhancing the role of real options in financial decision making:•demonstrate that real options can indeed add value•in some cases even gain a sense of the amount of value added by real options•offer expert appraisers methods for improved estimation of the value of a business when real options are part of the organizational capital
The most frequently used method for buying or selling real options occurs when a product that includes real options is sold to customers (often at a premium above the price of a comparable product that does not include real options). Real options that are part of the organizational capital of a business are part of the package in an acquisition (or minority equity position). In this chapter we examine several cases of such transactions.
Firda Nosita and Rifqi Amrulloh
The authors believe the COVID-19 pandemic has an impact on supply and demand. The potential decline in real sector performance leads to lower expectations of securities…
Abstract
The authors believe the COVID-19 pandemic has an impact on supply and demand. The potential decline in real sector performance leads to lower expectations of securities performance. The uncertainty of future performance can change investor behaviour. This study tried to gain insight into stock investor behaviour during the COVID-19 pandemic. The results showed that the majority of the investor realized and believed the pandemic would affect the stock market performance. Hence, they did not show herding behaviour and were very confident during the COVID-19 pandemic. The survey also indicates that investors tend to avoid risk rather than take the opportunity to buy at a lower price. Moreover, investors believe that the COVID-19 vaccine will soon be found, and the economy will return to normal. Government and self-regulated organizations (SRO) are responsible for making effective policies to convince the investors about the future prospect.
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