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Outsourcing is a common practice that is often adopted to reduce costs and enhance capabilities. The underlying logic of a firm's outsourcing strategy is not always evident due to multiple antecedents with interacting effects. This study identifies critical factors that influence outsourcing strategies and reveals their interactions with empirical evidence from Chinese construction firms.

The quantitative decision-making trial and evaluation laboratory (DEMATEL) method was applied to analyze the interrelationships among the antecedents of project outsourcing strategies. First, 24 experts from 13 Chinese construction firms were invited to evaluate and score the influence of each factor on the other. Second, the graph theory and matrix tools of DEMATEL were used to quantitatively obtain the causality among factors and the prominence of each factor within the system.

Among the antecedents, a firm's pursuit of cost efficiency, identity, technological capability and contracting capability are the most prominent factors influencing project outsourcing strategies. For the interactions among these factors, this study reveals that the focal firm's technological capability significantly influences its contracting capability, and they jointly influence the firm's outsourcing practices, the selection of outsourcing vendors and, eventually, its pursuit of cost efficiency. Moreover, legal restrictions in the institutional environment strongly shape this capability–cost efficiency relationship.

Twelve critical factors following different theoretical perspectives at varying levels of analysis were identified from the literature review. By revealing the interrelationships among these factors, this study develops a holistic framework that integrates the transaction cost and capability perspectives for understanding project outsourcing strategies embedded in different institutional environments.

The aim of this paper is to go beyond the “What to outsource” and “To Outsource or Not” debate. Recognizing outsourcing as a fast growing reality that firms have to depend upon, the paper concerns itself with optimal management of outsourcing arrangements through the practice of “outsourcing capability”. It argues that outsourcing failure can be mitigated if organizations see outsourcing as an “ongoing activity” to be managed as opposed to treating it as a one-time opportunistic “act”.

Based on the review of existing literature and drawing upon recent instances of outsourcing successes and failures, the paper develops a conceptual framework which divides various organizational processes into four different classes. It delineates the varied aspects of “outsourcing capability” that a firm would need to use to manage these varied class of processes as and when they are outsourced.

There is no “one-size-fits-all” approach to managing outsourced processes. Different processes require emphasis on different aspect of outsourcing capability if outsourcing is to deliver the envisaged benefits.

The traditional focus in outsourcing literature has been on the core/non-core process with the recommendation to keep core processes in-house and outsource the non-core processes. This distinction can be transitory and hence detrimental in the era of hyper-competition. I argue that firms should instead focus on developing and refining aspects of “outsourcing capability” relevant to the varied class of processes that they wish/need to outsource.

The purpose of this study is to examine backsourcing, which refers to the full or partial re-internalization of a firm’s previously outsourced activity. Researchers have primarily focused on the drivers of backsourcing, but this paper builds on that prior research to develop a typology of backsourcing.

Drawing on transaction cost economics and the resource-based view (RBV), the paper posits that firms backsource because of two factors – changes in their short-run total costs and changes in their internal capabilities for re-internalization. By using the interactions between these two factors, the authors propose four types of backsourcing.

The paper presents a typology for backsourcing: profitability-backsourcing, operational-backsourcing, strategic-backsourcing and failure-backsourcing. Only one (failure-backsourcing) of these four types of backsourcing suggests failure, while the other three indicate strategic flexibility. The authors also present mini-cases to support the typology.

The paper presents a conceptual model of backsourcing. This is a limitations of the study and further research is needed to empirically test the proposed model.

From a managerial perspective, this framework can be used as a decision-making tool for firms that are considering backsourcing. Given the complexity involved and the perceived stigma, decision-makers may find it difficult to backsource. Thus, a framework to avoid biases leading to decision-making errors, as well as to understand if backsourcing is a viable option, is needed.

This paper is one of the first to present a typology of backsourcing which can be used to understand when it is a failure of the outsourcing strategy and when it is a signal of strategic flexibility. This paper contributes to the growing stream of research on backsourcing by moving the literature beyond determinants and bringing attention to the outcomes of backsourcing. Additionally, the proposed framework can be used as a tool by decision-makers to examine whether backsourcing is favorable for their firm based on costs and capabilities for re-internalization.

Adaptation is often seen as a key competitive advantage for outsourcing vendors. Outsourcing research has often assumed that vendor capabilities are static. However, as a result of uncertainties and/or changes in the client environment, vendors need to be able to adapt their outsourcing capabilities. The aim of our research is to compare two contrasting outsourcing approaches and illustrate how an adaptive approach may deliver better results for clients in the long term.

The paper uses a combination of literature and case study research. A retrospective case study approach was adopted, using interviews, observations and analysis of reports. Two case studies utilizing contrasting clients approaches were investigated and compared. In one of the case studies, the client reorganized activities first and then outsourced them, while in the other, the client did the reverse – outsourced first and then reorganized.

The findings indicate that reorganizing first and outsourcing afterwards contributes to a more controlled implementation, which results in a more defined and stable set of vendor outsourcing capabilities that contributed to short-term success. In contrast, outsourcing first and reorganizing later demonstrates a less controlled redesign of the client’s organizational structure, which requires a malleable set of outsourcing capabilities to accommodate future change. The latter strategic manoeuver results in an extended adaptation period, as some capabilities need to be developed over time. However, it may improve success over time as subsequent changes in the client environment can be catered for in a better way.

Only two explorative case studies were performed, limiting confidence in the degree of generalization of the results. We plea for more research on the effect of context dependency as various contingencies may impact the adaptation of outsourcing capabilities; for example, the volatility of the client’s market or the stability of the technology concerned.

When a client applies a proactive manoeuver, reorganizing first and then applying outsourcing, the number of adaptive capabilities required of the outsourcing vendor is reduced, limiting the risk for the client in the short term. In the longer term, however, subsequent change requirements may be less well-accommodated.

Strategic manoeuvers within an outsourcing context have received limited attention in research. As far as we know, this is the first empirical research that investigates the benefits of vendors having adaptive capability.

This study aims to first identify influencing factors of outsourcing decisions in construction projects systematically and further to unravel the interactions of these influencing factors from a holistic perspective.

This study concerns the design and analysis of two-stage studies, where, at the first stage, a systematic literature review and 48 semi-structured interviews with senior practitioners in construction firms were conducted to identify influencing factors in outsourcing decisions in construction projects. At the second stage, the decision-making and trial evaluation laboratory (DEMATEL) method was employed to explore the interactions between influencing factors and pathways of outsourcing decisions.

Three focuses for outsourcing decisions are outlined, revealing that outsourcing restrictions, strategic needs and cost objectives need to be considered in outsourcing decisions. In addition, the finding contributes to the integration of transaction costs perspective and capability perspective by unravelling the mechanism of how different factors work together.

This study outlines 18 influencing factors and three sequential focuses for outsourcing decision-making, providing a clearer understanding of each factor’s contribution for decision-makers.

Most of the existing studies stressed the net effect of individual outsourcing factors from a single logic and paid little attention to their complex causal relationship. This study develops a holistic perspective of the influencing factors of outsourcing in construction projects by contending the overall knowledge of outsourcing and analyzing the causal relationship between them.

Technological outsourcing requires possessing the technological capability level by enterprises taking the outsourced activity and further mandates build-up capabilities. Small and medium enterprises (SMEs) in developing nations such as Ethiopia are usually equipped with low level of technological capability and could benefit from government-supported or government-initiated outsourcing networks. The current study aims to preliminarily assess performance of outsourcing initiative taken by the Hibret Manufacturing and Machine Building Industry, a subsidiary of a national corporation, in developing technological capability of SMEs in Ethiopia.

The study used a qualitative research approach through interviews with the parent company officials and owners of SMEs and site visit to these SMEs. Findings are organized in a way to draw lessons to be learned from technological outsourcing examined.

Technological learning, acquisition of new technologies, market access and process innovation are few capabilities achieved by the involved SMEs. To facilitate and harness these opportunities and further assist in policy ratification, a conceptual framework has been presented and elaborated.

Further investigation into outsourcing procedure and biases are expected to shed further light onto the outsourcing initiative by the parent company. This study drew results from investigation of the SMEs involved. Additional investigation of other SMEs is expected to reveal additional insights.

There is a dearth of literature focusing on exploration of technological outsourcing in low-income developing countries, such as Ethiopia, to build SMEs’ technological capabilities. This research presents insightful contribution to strategic outsourcing to build local technological capability in developing economies.

A vendor's capabilities are recognized as one of the most important factors for success in outsourcing. However, there is a lack of understanding of how vendors manage their capabilities throughout the outsourcing process. With an aim to contribute to filling this existing gap, the purpose of this paper is to explore how vendors deploy their capabilities in order to win, run and renew the outsourcing contracts.

The research question has been derived by integrating a resource‐based view theory with a model of a vendor's process in outsourcing. A multiple‐case study of three contract electronic manufacturers has been employed to explore the research question.

The results show that for achieving their outsourcing objectives, vendors use different capability mixes: the winning, the running, and the renewing. These mixes are created through utilization of different portfolios of competences (balanced, unit‐dominant, and versatile) and capabilities (permanent and temporary) which need to be deployed in the right combination (deployment strategy) adequate for the stage of the industry dynamics in which vendors operate. The research also indicated the importance of the relationship management capability for the success of outsourcing arrangements in the electronic manufacturing service (EMS) provision industry.

New research involving more case companies would improve the validity of the conclusions made in this paper. Results also suggest that more research into relationship management capability in the context of the EMS industry will be a fruitful area for future studies.

Vendors who seek to advance in the industry's value chain need to expand their portfolio of competences and adapt their deployment strategies to new, more dynamic and volatile environments. The paper proposes three different deployment strategies for three different operational contexts.

In contrast with the existing static approach towards studying vendor's capabilities in outsourcing, the paper's findings show that vendors use different mixes of capabilities throughout the outsourcing process. The authors have been able to show how those capability mixes are formed. In addition, it was found that relationship management is an important capability for consideration when studying and practicing manufacturing outsourcing.

The purpose of this paper is to explore the underlying mechanisms through which integration capability and learning capability influence IT outsourcing performance from vendor’s perspective.

This paper develops a moderated mediation model to explain the underlying influence processes of integration capability and learning capability on vendor’s performance. A sample of 237 vendor firms was obtained from China through two separated surveys. The hypotheses were tested with the partial least squares method and bias-corrected bootstrapping method.

The empirical results indicate that external integration capability (EIC) mediates the effect of internal integration capability (IIC) on vendor outsourcing performance, and the relationship between EIC and vendor performance is positively moderated by learning capability, while learning capability has a negative moderating effect on the link between IIC and vendor performance. Further, the conditional indirect effect is suggested. The indirect effect of IIC on vendor performance through EIC becomes non-significant when learning capability is low.

This study highlights the counterintuitive notion that learning capability may not always have uniformly positive effects and figure out the mechanism through which integration capability and learning capability can effectively improve IT outsourcing performance.

Many pharmaceutical companies outsource their research and development and manufacturing operations to value chain partners. Effective evaluation of outsourcees' capabilities and relationship management are often central for outsourcers to secure sustainable competitive advantage. This study aims to investigate how to evaluate outsourcees and manage outsourcing relationships in the pharmaceutical industry based on the theory of dynamic capability (DC).

The investigation used an exploratory multiple case study approach. The data collection, spanning a period of 12 months, entailed a multinational pharmaceutical company (PharmCo) with its headquarters in Europe, and four contract research and manufacturing organizations from China and India.

The results show that PharmCo evaluates its outsourcing partners based on their dynamic capabilities, which include processes (project deliverables, communication, and accuracy of costs), positions (financial assets, number of scientists, spectrum of services, and geographical presence), and paths (past experiences). The findings indicate that a pharmaceutical company outsources to partners with high operational capabilities, whereas it builds fully integrated outsourcing relationships only with those that have high dynamic capabilities.

Findings from this study provide guidelines for practitioners in manufacturing industries to efficiently and effectively evaluate and manage outsourcees to deal with the challenges and risks associated with strategic outsourcing.

The paper contributes to the literature by providing empirical evidence on the role of DC in outsourcee evaluation and outsourcing relationship management in the pharmaceutical industry. Moreover, the paper illustrates how to conceptualize and measure the DC as a multi-dimensional construct. The analysis also indicates that partners' dynamic and operational capabilities play different roles in outsourcing relationship management.

The purpose of this paper is to analyze the rationale for choice of suppliers and the influence these decisions have on the firm’s capabilities.

The authors examine the choice of in-house operations vs buying maintenance in the Swedish mining industry through a qualitative case study approach.

The findings reveal a strong tendency to outsource maintenance.

This in turn has a strong influence on the firm’s capabilities and long-term competitive advantage and sustainability.

Based on the empirical findings, the authors comment on the strength and weaknesses of the different outsourcing and attempt to find practical solutions that assist the firm in creating competitive advantage.

The unique contribution of this study is that it extends prior firm capabilities studies by investigating the impact of capability loss specifically in complex, intricate maintenance processes in a dynamic industry.