Governance decisions for the offshore outsourcing of new product development in technology intensive markets

Published on Jul 1, 2009in Journal of World Business5.79
· DOI :10.1016/j.jwb.2008.08.007
David A. Griffith44
Estimated H-index: 44
(MSU: Michigan State University),
Nukhet Harmancioglu13
Estimated H-index: 13
(Koç University),
Cornelia Droge52
Estimated H-index: 52
(MSU: Michigan State University)
This study addresses how buyers organize their offshore outsourcing new product development relationships. Building on transaction cost economics and resource dependence theories, we propose a model of the influence of key new product development offshore outsourcing factors on two important buyers' governance decisions (i.e., supply concentration and degree of supplier involvement). The antecedents, drawn from the marketing, management, and international business literatures, include: three sources of asset specificity (degree of modularity, strategic value of the project, and technology specificity) and two sources of uncertainty (cultural distance and technological discontinuity). The results, derived from an analysis of 200 offshore outsourcing new product development relationships, provide new insights for academics and practitioners.
  • References (60)
  • Citations (52)
Published on Mar 1, 2008in Journal of International Marketing3.38
Beibei Dong8
Estimated H-index: 8
(MU: University of Missouri),
Shaoming Zou27
Estimated H-index: 27
(MU: University of Missouri),
Charles R. Taylor31
Estimated H-index: 31
(Villanova University)
Abstract Multinational corporations' (MNCs') control over their foreign operations plays an important role in implementing their global marketing strategy. In the past, transaction cost analysis and bargaining power theory have been widely cited to explain the degree of control MNCs exert over their foreign operations. However, research explicitly combining these two perspectives has been limited. To address the gap in the literature, the authors present a joint model that combines the two alter...
Published on Jan 1, 2008in Marketing Science2.49
Erin Anderson33
Estimated H-index: 33
(UPenn: University of Pennsylvania)
This descriptive study explores the reasons for integration of the personal selling function, i.e., the use of employee (“direct”) salespeople rather than manufacturers' representatives (“reps”). A hypothesized model is developed based on both transaction cost analysis and the sales force management literature. Data from 13 electronic component manufacturers covering 159 U.S. sales districts are used to estimate a logistic model of the probability of “going direct” in a given district. Results a...
Published on Dec 1, 2007in Journal of International Marketing3.38
Gregory J. Brush5
Estimated H-index: 5
(UWA: University of Western Australia),
Nexhmi Rexha8
Estimated H-index: 8
(Curtin University)
Abstract Recent international attention has been drawn to marketing opportunities in Asia and the important role of customer relationships in supplier performance. However, empirical research on industrial buying behavior in Asia is sparse, and the extant literature indicates that buyer behavior may differ in non-Western industrial marketing relationships. Drawing on transaction cost economics and relational exchange theory, the authors develop a model that provides new insights into how interna...
Published on Dec 1, 2007in Journal of International Marketing3.38
Goksel Yalcinkaya11
Estimated H-index: 11
(UNH: University of New Hampshire),
Roger J. Calantone65
Estimated H-index: 65
David A. Griffith44
Estimated H-index: 44
(MSU: Michigan State University)
Abstract The authors employ the dynamic capabilities perspective to gain a greater understanding of the conversion of firm resources into exploitation and exploration capabilities and the influence of these firm capabilities on firm outcomes. Specifically, they theorize that marketing and technological resources provide a foundation for the establishment of exploitation and exploration capabilities, respectively, and that these dynamic capabilities influence the degree of product innovation and ...
Published on Sep 1, 2007in Journal of International Marketing3.38
Arto Ojala19
Estimated H-index: 19
(University of Jyväskylä),
Pasi Tyrväinen17
Estimated H-index: 17
(University of Jyväskylä)
Abstract This article investigates the influence of cultural distance, geographic distance, and three market size variables in the target country preference of small and medium-sized enterprises (SMEs) in the software industry. In addition, the authors examine the shift of SMEs' priorities in country selection by analyzing how these factors affect the selection of the first, second, and third target countries. The empirical findings suggest that approximately 70% of country choices can be explai...
Published on Jan 1, 2007in Journal of Marketing7.82
Stephen J. Carson11
Estimated H-index: 11
(UofU: University of Utah)
Abstract The author investigates the impact of client control on supplier task performance in the burgeoning area of outsourced new product development. In relationships in which the outsourced task requires a high degree of creativity on the part of the supplier, ex ante contractual control is shown to increase supplier performance. In contrast, ex post client control is shown to reduce supplier performance, though certain highly skilled clients can overcome this effect. Behaviorally, clients e...
Published on Nov 1, 2006in Industrial Marketing Management4.78
Stephan M. Wagner39
Estimated H-index: 39
(WHU - Otto Beisheim School of Management),
Martin Hoegl34
Estimated H-index: 34
(WHU - Otto Beisheim School of Management)
Abstract While there is increasing evidence that involving suppliers in new product development (NPD) is important, and for many firms even inevitable, there is also evidence that not all such efforts are successful. Firms aiming at implementing this strategy effectively have to pay close attention to several contingency factors on the organizational level and properly manage supplier involvement on the project level. The exploratory case study research underlying this article explores key issue...
Published on Mar 1, 2006in Journal of International Marketing3.38
Carlos M. P. Sousa18
Estimated H-index: 18
(UCD: University College Dublin),
Frank Bradley12
Estimated H-index: 12
(UCD: University College Dublin)
Abstract Cultural distance and psychic distance are two concepts that are widely used in the international business literature. A large number of studies use both concepts interchangeably with no clear distinction between them. The authors propose a new model to assess cultural distance and psychic distance separately. Through the use of survey data of more than 300 managers, this article shows that both concepts are conceptually different and that psychic distance is determined by cultural dist...
Published on Aug 1, 2005in Journal of Marketing Research4.20
Mrinal Ghosh10
Estimated H-index: 10
(UM: University of Michigan),
George John25
Estimated H-index: 25
Abstract The exclusion of firm-specific considerations in the standard (economizing calculus) approach to buyer–supplier ties makes the large variations in the types of contracts used within the same industry unexplainable. This article tests Ghosh and John's (1999) strategizing calculus model that purports to close this gap. The core organizing principle of this model is a three-way fit among firm resources, investments, and governance that yields the highest net receipts. From this principle, ...
Published on May 1, 2005in Journal of International Business Studies7.72
Laszlo Tihanyi32
Estimated H-index: 32
(OU: University of Oklahoma),
David A. Griffith44
Estimated H-index: 44
(SPbU: Saint Petersburg State University),
Craig J. Russell22
Estimated H-index: 22
(OU: University of Oklahoma)
Although a growing literature indicates that cultural distance – that is, differences between national cultures – is an important determinant of organizational actions and performance, both empirical and theoretical concerns abound. In this study, the relationships of cultural distance with entry mode choice, international diversification, and MNE performance are examined by meta-analyzing data from 66 independent samples, with cumulative sample sizes ranging from 2,255 to 24,152. Regression res...
Cited By52
Published in Journal of World Business5.79
Min Ju6
Estimated H-index: 6
(UMSL: University of Missouri–St. Louis),
Janet Y. Murray25
Estimated H-index: 25
(UMSL: University of Missouri–St. Louis)
+ -3 AuthorsMasaaki Kotabe48
Estimated H-index: 48
(TU: Temple University)
Abstract Concurrent sourcing is critical to multinational firms’ operations in emerging economies, such as China. Despite its prominence, research is lacking on the underlying conditions and performance implications of this strategy. We investigate the driving factors of multinational firms’ concurrent sourcing strategy and test whether concurrent sourcing outperforms other types of sourcing strategies. Our empirical findings suggest that multinational firms tend to choose concurrent sourcing un...
AbstractUncertainty is a key contextual factor that affects the decision-making of multinational corporations on many types of international operation. However, the variety of ways in which uncerta...
Published on Jan 1, 2019
Eleni Lioliou5
Estimated H-index: 5
(QMUL: Queen Mary University of London),
Leslie P. Willcocks63
Estimated H-index: 63
(LSE: London School of Economics and Political Science)
As the practice of information technology (IT) outsourcing has been evolving, the research issues concerned with it, and the theories used to explain it, have shifted accordingly (Dibbern et al. 2004; Lacity et al. 2009; Willcocks et al. 2018). In the early stages, research on IT outsourcing was centred on the ‘make-or-buy’ decision. Researchers from economic perspectives supported that outsourcing is a reasonable option when contracting out the IT function is cheaper than developing it in-house...
Luigi Cantone2
Estimated H-index: 2
(University of Naples Federico II),
Pierpaolo Testa1
Estimated H-index: 1
(University of Naples Federico II)
+ 1 AuthorsGiuseppe Fabio Cantone (University of Naples Federico II)
Several studies in the literature have addressed the issue of outsourcing in relation to New Product Development (NPD) or R&D processes. However, the issue of how the outsourcing decisions in the NPD process are best undertaken by the firms has not been fully addressed. Understanding factors influencing the decision of innovation outsourcing more likely remains a need within the current research stream. As it stands, the existing literature takes account of neither a complete set of decision mak...
Published on Nov 1, 2018in Journal of World Business5.79
David H. Weng5
Estimated H-index: 5
(VU: VU University Amsterdam),
Mike W. Peng60
Estimated H-index: 60
(UTD: University of Texas at Dallas)
Drawing on the home country literature, we argue that firms headquartered or located in countries with strong labor protection may face challenges in their domestic operations. These firms are likely to initiate offshoring to enhance operational efficiency. Building on this argument, we also examine the boundary conditions moderating this proposed effect including labor productivity and employee stock ownership. Results based on a sample of information technology firms operating within five deve...
Published on Oct 1, 2018in International Journal of Project Management4.69
Yajuan Wang1
Estimated H-index: 1
(IBS: International Business School, Germany),
Yi Liu1
Estimated H-index: 1
(SJTU: Shanghai Jiao Tong University),
Cem Canel11
Estimated H-index: 11
(UNCW: University of North Carolina at Wilmington)
Abstract Interfirm process coordination is pivotal for offshore outsourced service project success. Via knowledge-based and organizational learning view, this study explores the effectiveness of process coordination in the dyadic client-provider relationship. We investigate the influence of interactive and implicit coordination on project performance under contingencies of project modularity and complexity, which determine interfirm interdependencies from the top down and from the bottom up. The...
Published on Apr 1, 2018in Journal of International Business Studies7.72
Michael A. Sartor2
Estimated H-index: 2
(Queen's University),
Paul W. Beamish59
Estimated H-index: 59
(UWO: University of Western Ontario)
Abstract While extant theory suggests that the pervasiveness of host market government corruption should influence the equity ownership decisions of foreign-investing multinational enterprises (MNEs), empirical research has produced inconclusive results. We leverage insights from transaction cost economics to advance an uncertainty-oriented framework which can be used to explain the impact of host market government corruption on the equity-based entry strategies of MNEs. We disaggregate governme...
Published on Feb 1, 2018in IEEE Transactions on Engineering Management1.87
Margherita Pero5
Estimated H-index: 5
(Polytechnic University of Milan),
Monica Rossi8
Estimated H-index: 8
(Polytechnic University of Milan),
Sergio Terzi14
Estimated H-index: 14
(Polytechnic University of Milan)
Global Product Development (GPD) networks have evolved to satisfy the unique requirements essential to the successful adoption of corporate outsourcing and offshoring during development processes. Having reviewed the relevant literature associated with GPD, this paper seeks to contribute to the understanding of organizational considerations taken by GPD networks during their transitional processes. A retrospective case study analysis was conducted with 17 Italian companies classified into six GP...
Published on Apr 3, 2017
ChangSeob Yeo1
Estimated H-index: 1
Vafa Saboori-Deilami1
Estimated H-index: 1
Purpose The purpose of this study is to theoretically clarify under which circumstances MNCs should outsource the innovation function. In the globalization era, multinational companies (MNCs) face the challenge of making a strategic decision. They ought to adjudicate upon outsourcing the research and development, i.e. innovation function and bearing the risks of it, or keeping innovation function in house and paying the price of this decision. This decision becomes more crucial when the host cou...
Published on Apr 1, 2017in Journal of World Business5.79
Filippo Albertoni2
Estimated H-index: 2
(Polytechnic University of Milan),
Stefano Elia9
Estimated H-index: 9
(Polytechnic University of Milan)
+ 1 AuthorsLucia Piscitello17
Estimated H-index: 17
(Polytechnic University of Milan)
This paper investigates whether reshoring of business services is the result of company response to performance shortcomings of the initiative offshored or instead is motivated by persisting with original offshoring strategy (disintegration advantages, accessing new markets and cost-saving), regardless of offshoring performance. Our empirical analysis, based on data from the Offshoring Research Network, shows that both arguments hold. Moreover, when offshoring had been motivated by accessing to ...