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Article
Publication date: 6 August 2018

Hannu Makkonen, Sini Nordberg-Davies and Rami Olkkonen

The article aims to further understanding of purchasing practices in post-outsourcing buyer–supplier relationships, and it provides a holistic approach and…

Abstract

Purpose

The article aims to further understanding of purchasing practices in post-outsourcing buyer–supplier relationships, and it provides a holistic approach and onceptualizations with which to balance the perspectives of purchasing as an intra-firm operational function and as a strategic activity embedded in relationship and network management.

Design/methodology/approach

The research is based on an inductive-oriented case study. The data comprised 61 thematic interviews conducted at 17 buyer companies (electricity distribution companies), 11 service supplier companies and six third-party organizations. The case features a setting in which a growing number of electricity distribution companies have outsourced operational functions regarding network construction, maintenance and fault repair and purchased these services from service suppliers representing a developing service market.

Findings

The study explicates the role of purchasing as an element with the most impact on post-outsourcing buyer–supplier relationship outcomes and development. The performance of the buyer–supplier relationship either accelerates or inhibits the new service supplier’s entry to the field and motivates or demotivates the electricity distribution companies to outsource their activities. This mechanism links to the respective development of supplier markets and buyer industry transformation.

Originality/value

The focal study provides a holistic approach and conceptualizations with which to balance the perspectives of purchasing as an intra-firm operational function and as a strategic activity embedded in relationship and network management. In particular, the study provides conceptual development on purchasing practices in post-outsourcing relationships and concrete managerial implications for dealing with such circumstances. The focal study includes case notes that facilitate using the study for teaching purposes.

Details

Journal of Business & Industrial Marketing, vol. 33 no. 7
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 1 August 2000

Ying Fan

Outsourcing has become an increasingly popular option for many organisations. But they vary in terms of activities being outsourced, reasons for and benefits from…

Abstract

Outsourcing has become an increasingly popular option for many organisations. But they vary in terms of activities being outsourced, reasons for and benefits from outsourcing, and how the decision was made. This article presents an empirical research on 14 companies. It found out: in most cases it was the “peripheral” support activity being outsourced with cost reduction as the primary driver; outsourcing decision was being made early in the process without active involvement of the in‐house provider; and there were problems in supplier selection and management. The research identified pre‐outsourcing decision process and post‐outsourcing management as the two key areas that gave cause for concern, and offered recommendations for improvement.

Details

Marketing Intelligence & Planning, vol. 18 no. 4
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 23 November 2010

Ruhanita Maelah, Aini Aman, Noradiva Hamzah, Rozita Amiruddin, Sofiah and Auzair

The purpose of this paper is to provide understanding on the process of accounting outsourcing turnback from the client's perspective. The aim is to understand the issues…

Abstract

Purpose

The purpose of this paper is to provide understanding on the process of accounting outsourcing turnback from the client's perspective. The aim is to understand the issues faced by clients during turnback process, and provide recommendations to resolve them.

Design/methodology/approach

This study adopts a qualitative interpretive case study approach. Data were collected based on documentation, archival records, direct observation, and interviews to allow for triangulation.

Findings

This study provides empirical evidence of accounting outsourcing turnback process. Some of the issues faced by clients include lack of management support, limited financial and human resources, and uncooperative vendors.

Research limitations/implications

Theoretically, this study extends Elliot's model by providing empirical evidence on process, identifying issues, and discussing recommendations on accounting outsourcing turnback. The limitation is the use of a single case study of a small company in Malaysia.

Practical implications

Practically, this study enhances understanding on accounting outsourcing turnback process and issues. The recommendations provided can serve as guidelines for clients who are considering outsourcing turnback as a strategic move.

Originality/value

There has been limited research in the area of accounting outsourcing focusing on turnback process. This study contributes to the field of accounting outsourcing by describing an accounting turnback process and issues faced by clients. The study recommends communication, financial support, top management support, back‐up exit plan, and vendor management throughout the turnback period. Finally, gradual reduction of accounting outsourced works rather than immediate termination is favored to reduce the risk in accounting outsourcing turnback.

Details

Strategic Outsourcing: An International Journal, vol. 3 no. 3
Type: Research Article
ISSN: 1753-8297

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Article
Publication date: 1 May 1998

Peter R. Embleton and Phillip C. Wright

Studies the outsourcing phenomenon, starting with strategic analysis and working through the many practical considerations and decisions that practising managers must…

Abstract

Studies the outsourcing phenomenon, starting with strategic analysis and working through the many practical considerations and decisions that practising managers must make. As outsourcing is not to be taken lightly, the disadvantages are discussed in some detail. Of note too, are sections concerned with managing the outsourcing relationship, post outsourcing and morale, all concerned with the human resource management aspects of outsourcing.

Details

Empowerment in Organizations, vol. 6 no. 3
Type: Research Article
ISSN: 0968-4891

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Article
Publication date: 1 December 2006

Kwok Hung Lau and Jianmei Zhang

To explore the key factors that motivate organizations in China to outsource and the obstacles these companies are facing in comparison with the situation in Western…

Abstract

Purpose

To explore the key factors that motivate organizations in China to outsource and the obstacles these companies are facing in comparison with the situation in Western developed countries.

Design/methodology/approach

A case study approach was adopted with primary data collected through in‐depth interviews with six companies in China and secondary data aggregated from company reports and documents. Research findings were analyzed within and across all case studies to identify key drivers and obstacles of outsourcing.

Findings

Economic factor is a strong motivation for outsourcing in China, of which cost reduction, cost saving, and capital investment reduction are the main concerns. Strategic considerations, such as the use of outsourcing to accelerate re‐engineering benefits, to focus on core competence, to increase flexibility, and to facilitate market penetration, are identified. Environmental factors like information technology (IT) development and capability of supplier can influence organizations' decisions to outsource. Meanwhile, companies in China have encountered obstacles and problems in the outsourcing process. They include the lack of capable service providers, loss of control, poor transportation and IT infrastructure, presence of local protection regulations, and lack of overall post‐outsourcing measurement.

Originality/value

This paper presents a systematic exploration of the drivers and the obstacles of outsourcing in China and provides a framework that may guide business organizations to make better outsourcing decisions. It may assist organizations to clearly define their expectations, develop strategic outsourcing plans, and make appropriate decisions to achieve outsourcing objectives.

Details

International Journal of Physical Distribution & Logistics Management, vol. 36 no. 10
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 18 February 2019

Pooja Thakur-Wernz

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Practical implications

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.

Originality/value

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.

Details

Journal of Global Operations and Strategic Sourcing, vol. 12 no. 1
Type: Research Article
ISSN: 2398-5364

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Article
Publication date: 16 November 2012

Patrick J. Murphy, Zhaohui Wu, Harold Welsch, Daniel R. Heiser, Scott T. Young and Bin Jiang

Pursuing objectives despite limited internal resources and leveraging external resources despite non‐ownership are familiar hallmarks of entrepreneurial firms. Although…

Abstract

Purpose

Pursuing objectives despite limited internal resources and leveraging external resources despite non‐ownership are familiar hallmarks of entrepreneurial firms. Although outsourcing is the standard way for businesses to surmount these barriers, entrepreneurial firms often lack the resources to purchase outsourcing arrangements. The purpose of this paper is to shed light on how entrepreneurial firms can better procure and benefit from outsourcing arrangements.

Design/methodology/approach

The paper examines six entrepreneurial firms in a Shanghai business incubator as they undertook a variety of outsourcing arrangements. It utilizes an integrative framework based on transaction cost theory, resource dependency theory, and the resource‐based view. It then cross‐hatches those three theory bases with four outsourcing modes (full, partial, spinout, inter‐outsourcing) and case study methodology.

Findings

The paper's findings yield three novel propositions for strategic and ex ante entrepreneurial firm outsourcing activities. The propositions pertain to the exchange of non‐traditional resources, vendor‐buyer power differentials, and linkages between internal operations and external resources.

Originality/value

Entrepreneurial firms stand to benefit in particularly vital ways from outsourcing arrangements. Yet, they are often severely constrained with respect to resources. Such strong need combined with limited means is a peculiarly valuable setting but only a paucity of research exists. The original study targets this important setting.

Details

Strategic Outsourcing: An International Journal, vol. 5 no. 3
Type: Research Article
ISSN: 1753-8297

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Article
Publication date: 3 April 2018

Sourav Sengupta, Tarikere T. Niranjan and Mohan Krishnamoorthy

Service triads refer to tripartite relationships in which client firms serve their customers through third-party service providers. The purpose of this paper is to…

Abstract

Purpose

Service triads refer to tripartite relationships in which client firms serve their customers through third-party service providers. The purpose of this paper is to systematically review the nascent but fast-growing literature on service triads to explore the broad themes along which the literature has grown, and to identify the gaps and future research opportunities.

Design/methodology/approach

Systematic literature review (SLR) approach is adopted to retrieve, select, and synthesise relevant service triads studies. A citation network analysis on the corpus resulting from the SLR identified the core articles of the literature.

Findings

The SLR uncovered ten themes of research along the articles’ objectives, theories and methodologies. The classification framework of service triads, the roles of customers and providers, the size of the provider, triadic risks, controlling service delivery and service quality, regulated triads, the stability of the triads, and cross-country, cross-culture triads emerged as significant under-researched areas.

Originality/value

The paper illustrates research trends and provides insights into the neglected and under-researched problems of service triads. This is the first SLR on service triads.

Details

International Journal of Physical Distribution & Logistics Management, vol. 48 no. 3
Type: Research Article
ISSN: 0960-0035

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Book part
Publication date: 4 August 2017

Roger Strange and Giovanna Magnani

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…

Abstract

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.

Details

Breaking up the Global Value Chain
Type: Book
ISBN: 978-1-78743-071-6

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Article
Publication date: 1 January 2010

Ying Liao, Kun Liao and Robert Hutchinson

The purpose of this paper is to propose a conceptual framework for prototyping outsourcing.

Abstract

Purpose

The purpose of this paper is to propose a conceptual framework for prototyping outsourcing.

Design/methodology/approach

This study provides an up‐to‐date literature review and an in‐depth case study.

Findings

This study identifies three factors (i.e. the degree of the prototyping to core competence, prototyping complexity, and supplier's capability of providing knowledge and speed for prototyping) and three types of risks (i.e. losing control over suppliers, dependency on suppliers, and supplier's lack of capabilities) for prototyping outsourcing decisions.

Practical implications

This paper provides guidelines for new product development managers in order to mitigate the risks associated with outsourcing and achieve effective prototyping.

Originality/value

This study provides a strategic outsourcing framework for prototyping.

Details

Journal of Manufacturing Technology Management, vol. 21 no. 1
Type: Research Article
ISSN: 1741-038X

Keywords

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