Search results

Outsourcing manufacturing and services to differing locations throughout the world is a common practice today. Yet, very little research has dealt with the known risks of outsourcing when it takes place between business organizations in differing countries or in an international context. This study presents a quantitative model that permits the inclusion of international risk factors in the outsourcing‐insourcing decision. A Fortune 500 firm case study is used to illustrate the informational efficacy of the decision model.

The last decades have seen manufacturing and services offshoring on the rise, often motivated by low prices and without consideration of other important criteria such as additional cost measures and risk. With wages in former low-cost countries and automation/robotization increasing, these decisions are increasingly contested. Re-evaluations of “shoring” decisions inherently create a need to re-examine theoretical and academic contributions to this rapidly changing phenomenon. Therefore, the special issue sought manuscripts that added to the exciting and dynamic body of knowledge on “rightshoring”. The paper aims to discuss this issue.

The paper starts out by delimiting outsourcing/insourcing and offshoring/reshoring as part of a conceptual “rightshoring” framework to establish a common terminology and context for the insights gathered in the special issue. It illustrates that “shoring” options can be classified along geographical and governance dimensions.

Both the geographical and governance dimensions are part of the rightshoring decision which is an important conceptual foundation for this special issue, as it invited insightful pieces on all of these phenomena (e.g. outsourcing, insourcing, offshoring, reshoring), acknowledging that these decisions are embedded in the same context – firms making governance and location decisions. Therefore, papers 1-4 primarily focus on offshoring, whereas paper 5 focuses on insourcing and paper 6 on reshoring. Their main findings are summarized in Table II.

Suggestions for future research out of the six papers are summarized in Table III. There is ample opportunity to further shed light on these suggestions as well as to cover parts of the “rightshoring” framework presented, that remain less covered here (e.g. insourcing and/or reshoring).

The array of potential “rightshoring” options fosters clarity about the phenomena studied and their implications. The main practical implications of the six papers are summarized in Table II.

The overall conceptual framework highlights the positioning of the final papers included into the special issue and provides guidance to scholars and managers alike.

The purpose of this paper is to attempt a justification as to why a profit-making firm may be viewed as a function of its nucleus expertise and a risky portfolio of deals.

This is a theoretical paper relying on mathematics, graphs and verbal arguments to describe concepts.

A profit-making firm can gain even more if it reduces the risk of its portfolio of deals. In its effort to reduce such a risk, the firm needs to know each deal’s profit share and be able to estimate each dealing partner’s reliability (a random variable).

The proposed hypotheses are not empirically tested, an exercise left to future work.

Pragmatically, a profit-making firm may be viewed as a function of its strategic nucleus and its strategic federation. The firm may increase its gains by minimizing deals’ risk through a portfolio of deals diversification. The more the firm considers factors such as mediation, optimal commitments and the like, the more effective and efficient becomes the management of the portfolio of deals.

As explained through examples and illustrations, viewing the firm as a function of deals benefits the parties in such deals as well as other stakeholders (community, region, nation, etc), e.g. less costly deals contribute to more profit and more growth.

A profit-making firm is viewed as an entity that manages a risky portfolio of promisor- and promisee-type deals. The ideas in this paper may be of value to today’s global, knowledge-based, outsourcing/insourcing firms which may find it increasingly difficult to rely on conventional contracts.

Discussion regarding the implications of and antecedents to the decision to outsource manufacturing functions has dominated both the academic literature and popular press for over 30 years. However, economic and competitive landscapes across the globe have changed such that the tenability of outsourcing is being re-evaluated by many organizations. Using the rich body of literature regarding the decision to outsource as a starting point, the purpose of this paper is to investigate the reasons why firms insource and the associated implications thereof.

This case study research captures data from 12 firms in the manufacturing industry that have insourced a previously outsourced function. Data were collected via interviews with executives, researcher observations, and archival records over a nine-month period.

The findings suggest that the primary drivers for insourcing were predominantly the same as those cited for outsourcing. However, insourcing decisions are often made in response to a specific, external trigger event and not necessarily in concert with long-term, strategic goals. This is in contrast to firms’ desires to make more strategic location decisions. The findings also show that insourcing/outsourcing location decisions require continuous evaluation in order to optimize competitiveness and align with long-term firm goals.

This research contributes by not only assimilating and gaining an understanding of key factors affecting insourcing decisions, but also by establishing a baseline for future investigation into this burgeoning area via the presentation of testable propositions.

This paper provides insights for supply chain, logistics, and operations management professionals who seek to better understand the critical factors that should be considered when deciding whether or not to insource.

The benefits of insourcing are being considered to a greater extent across industry, yet there is a dearth of academic or practitioner literature that business leaders and academicians can use as the basis for examining this decision. This research provides both the basis and motivation for developing knowledge in this area of increasing importance.

The purpose of this paper is to understand and explain why some professional sports organizations outsource their sponsorship-related activities to sports marketing agencies, whereas others purposely retain these activities in-house.

The paper applies transaction cost economics (TCE) and the resource-based view (RBV) to outsourcing of sports sponsorship activities. It examines the extent determinants descending from these theories influence the sourcing choice of professional sports organizations.

This paper argues that determinants derived from TCE and the RBV are useful to understand the factors likely to influence an outsourcing decision and to analyze which sponsorship-related activities are more or less likely to be outsourced. However, these determinants are insufficient to shed light on why sports organizations arrive at different conclusions about their internal and external environments. With recourse to contingency theory, the authors propose two additional contingencies that affect the sourcing decision: a sport organization’s size and its degree of professionalism. This integrative conceptual framework improves the understanding of sports sponsorship outsourcing, makes several propositions, and paves the way for future empirical research in sports sponsorship.

This is the first paper to apply classical theoretical concepts to outsourcing sports sponsorship activities. As a conceptual paper, it hopes to stimulate further research on outsourcing in sports sponsorship and on the relationship between sports organizations and sports marketing agencies.

This case attempts to study one of the key problems faced by a multinational organisation in the globalised environment that exists today: whether to outsource or insource. Outsourcing deals with getting into a contract with an outside vendor/supplier (local to the region in question) to deliver services to the parent company as per the agreed deliverables. On the other hand, insourcing deals with setting up operations in the destination country and hiring local staff on behalf of the company to do the same tasks.

Historically, outsourcing has been considered a better choice because of several benefits such as the ease of setting up operations, a predictable costing model and reduced capital investment. However, it comes with its own set of disadvantages as well, including a high attrition rate and a sub-standard level of quality in the deliverables. Apart from the quantifiable parameters, there are several qualitative parameters as well, which encompasses the employees' passion/commitment towards the company, sense of achievement and performance management process.

This case considers an existing situation in First Telecom (henceforth, referred as FT), where they have outsourced one part of their operations to multiple providers in India and are now facing huge issues with the quality of the deliverables; as a result, FT are now looking to explore if an insourced solution would be more cost-effective and productive. It evaluates the two models against various parameters and makes a recommendation on the preferred model.

This case can be used as a teaching tool in the following courses: MBA/postgraduate programme in strategic decision-making; MBA/postgraduate programme in management in management accounting and management control systems; and executive training programme for middle- and senior-level employees to look at the various factors involved (in addition to cost) that should be taken into account while comparing outsourcing versus insourcing.

FT is a communication service provider and has presence in more than 170 countries around the world. The company is considered among the top three telecom companies around the globe and offers solutions to multinational customers in the areas of networks, IP telephony, security services and other managed services.

The company has more than 100,000 employees around the globe. In addition to the regular (on rolls) employees, the company also outsources a lot of its operations in various countries to local service providers. The services that this company outsources include software/tools development, solution pricing and in-life service management. Historically, the company has believed that outsourcing is a better alternative because of the ease of setting up operations and lower cost.

However, because of the recent changes in the global market, there is a huge pressure within the company to reconsider all the functions and find ways to contain costs to help the company's bottom line.

There have been numerous complaints about the quality of output from one of the outsourced functions, namely, the “Pricing Team”, which is being presently outsourced to two service providers in India. The lack of accuracy has cost the company a key opportunity valued at more than USD5 million and the COO is furious at this loss. He has tasked the head of business improvement to do a full review of the function and look at the possible alternatives the company can explore to avoid these issues in future.

FT now wants to do a cost-comparison analysis of the existing set-up with a new insourced set-up considering all costs that would come into play. This would help FT to decide the future course of action to ensure reduced costs and enhanced operational efficiency from the process.

Understanding of cost-comparison parameters involved as an effective tool for strategy development and achieving organisational objectives; understanding of SWOT analysis (organisation level and decision level) and its applicability in the organisation context; understanding the Porter's five competitive forces model to illustrate the effect of environment on an organisation; and understanding of outsourcing and insourcing models and the pros and cons of each model, which is a key management decision in most multinational organisations.

Historical reports of the concerned unit in terms of the costs incurred, rate of attrition and operational efficiency achieved. Cost Accounting: A Managerial Emphasis, 14th ed., Charles T. Horngren, Srikant M. Datar and Madhav Rajan, Publisher: Prentice-Hall, 2012.Practical implications Based on the option (outsourcing versus insourcing) found to be better, appropriate actions would need to be taken in terms of either renewing the contracts with the outsourcing partners or preparing to terminate the existing contracts and hiring of talent from the market to replace the outsourced staff.

For nearly two decades, India as a country has grown considerably and one of the key contributors in that growth has been “Business Process Outsourcing” from all across the world to India. While the outsourcing wave has provided the initial push to the economy of India, it would not be able to help sustain the momentum primarily because of two reasons: the first is the growth of other countries, such as Hungary, the Philippines and China, as alternatives for outsourcing (and equally may be more cost-effective at times); and the second reason is the shift in various companies towards an insourcing model for critical functions.

Therefore, as a country, India needs to move ahead and, instead of only focusing on providing resources to do the tasks outsourced by global companies, focus should now shift to promoting innovation and creativity among the workforce. A lot of companies nowadays are realising the importance of product innovation and are investing huge amounts in R&D to come up with breakthrough technologies that can help them create a sustainable development model. However, this should in no way be considered an end of the outsourcing era. Although there needs to be an effort towards improving the interlock process, outsourcing is here to stay because of the benefits it brings.

Many voluntary sports clubs face financial difficulties and consequently turn to external funding sources. Recent developments suggest that sports clubs have been successful in significantly increasing sponsorship income by professionalizing their sponsorship activities. However, not much is known about how voluntary sports clubs professionalize their sponsorship management (e.g. sponsorship staff). This study seeks to gain a deeper understanding of the components addressed and the practices used by voluntary sports clubs to professionalize their sponsorship.

An exploratory case study was conducted to gain in-depth insights into voluntary sports clubs’ organizational developments in the context of sponsorship management. Data were collected from six sports clubs through document analyses and problem-centered interviews with decision makers. The data were analyzed using a qualitative content analysis approach, which included both deductive and complementary inductive coding of the data.

The results show that the components addressed in the professionalization of sponsorship management are reflected in three dimensions: “people and positions” (e.g. sponsorship staff), “structures and processes” (e.g. differentiation of responsibilities), and “strategies and activities” (e.g. sponsorship rights orientation). It was also found that clubs, which have diverse characteristics and levels of professionalization, pursue distinct approaches.

In contrast to studies on professional sports organizations that focus primarily on the sponsor’s perspective, this study sheds light on sponsorship management in sports clubs in the non-profit sector. The findings can help voluntary sports clubs to transform their sponsorship management strategically and increase sponsorship income in the long term.

The purposes of this paper are to provide first a detailed description of the use of interfirm cooperation by a large sample of Dutch firms of different sizes and from different industries, and second, to examine the governance role of financial managers in the management of cooperative arrangements.

Research questions are developed based on a review of previous literature and data were collected using a questionnaire administered to a large sample of Dutch firms.

The paper finds that the sample firms are generally well engaged in various types of interfirm cooperation, in particular in outsourcing arrangements and joint ventures. In addition, larger firms are on average involved in more types of cooperation than smaller firms are, and different cooperative activities and forms are frequently used in combination. On average, financial managers report to be actively involved in the management of interfirm cooperation, which ranges from monitoring yearly results, providing advice, supervising performance, to managing daily operations of the cooperation. In this management role, they mostly use frequent detailed financial and non‐financial performance information, which often not only relates to their own firm, but also to the partner firm.

This research provides evidence of the extensive use of interfirm cooperation in practice and identifies an important governance role of financial managers in the management of interfirm cooperation. An analysis of differences in this role across different types of cooperation and functional levels of financial managers is provided.

The findings provide new insights into firms' use of a broad range of interfirm cooperative activities and into the governance role financial managers in these activities. Consistent with prior studies that document an increasing propensity of firms to engage in cooperative arrangements, the results support that interfirm cooperation constitutes an important area for research in accounting. This paper provides several suggestions for future research aimed at improving researchers' and practitioners' understanding of the management of interfirm cooperation.

The purpose of this paper is to identify and analyse how different ways of organising transport and logistics activities in construction impact on efficiency. The paper scrutinises three particular transport and logistics configurations: the de-centralised coordinated configuration, the on-site coordinated configuration and the supply network coordinated configuration.

Three configurations are derived from the literature and from case studies. The efficiency of the three configurations is analysed on three levels of analysis: the construction site, the supply chain, and across supply chains and construction sites.

The paper concludes that there are possibilities to enhance efficiency on all three levels of analysis by widening the scope of coordination beyond the individual construction site.

The analysis points to efficiency potentials in applying the supply network coordinated configuration, although this configuration puts high demands on collaboration amongst the actors involved.

The paper provides illustration, and explanation, of the efficiency potentials involved in the three configurations.

The purpose of this paper is to examine how modularity is used for enabling value creation in managing healthcare logistics services.

Material logistics of four different kinds of hospitals is examined through a qualitative case study. The theoretical framework builds on the literature on healthcare logistics, service modularity and value creation.

The case hospitals have developed their material logistics independently from others when looking at the modularity of offerings, processes and organisations. Services, such as assortment management, shelving and developing an information platform, have been performed in-house partly by the care personnel, but steps towards modularised and standardised solutions are now being taken in the case hospitals, including ideas about outsourcing some of the services.

This paper proposes seven modularity components for healthcare logistics management: segmentation, categorisation and unitisation of offerings, differentiation and decoupling of processes, and centralisation and specialisation of organisations. Thus, this study clarifies the three-dimensional concept of modularity as a cognitive frame for managing logistics services with heterogeneous customer needs in a rapidly changing healthcare environment.

Modularity offers a tool for developing logistics services inside the hospital and increases possibilities to consider also external logistics service providers.

Managing healthcare logistics services through modularity has potential social implications in developing healthcare processes and changing the usage of health services. On a wider scale, modularity is helping healthcare systems reaching their goals in terms of service quality and cost.

This paper shows the context-specific antecedents of service modularity and the usage of modular thinking in managing healthcare logistics.