There is unprecedented interest in digitally enabled extended enterprises that enable firms to gain access to specialized skills and capabilities globally. Given this motivation, firms are unbundling their value chain processes and exploring new sourcing mechanisms. With the emergence of world-class skills and capabilities in offshore locations, new sourcing mechanisms have become available beyond traditional domestic insourcing and outsourcing. However, there is little systematic research examining how firms choose sourcing mechanisms for their business processes. This study views the digitally enabled extended enterprise as a complex system of business processes and examines how sourcing choices are made in such enterprises. It builds on the modular systems theory to posit that modularization of business processes and their underlying information technology (IT) support infrastructures are associated with the choice of sourcing mechanisms for the processes. The study tests this proposition in a sample of business process sourcing choices made by 93 medium and large U.S. firms. The results show that firms tend to choose domestic outsourcing for processes that are high in modularity and offshore outsourcing for processes that are low in modularity. Further, when processes can be detached from a firm's IT infrastructure, firms tend to use offshore outsourcing. However, when processes are tightly coupled with underlying IT infrastructure, it may be infeasible to detach processes and execute them in remote locations. Implications for theory and practice are also discussed.

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This work introduces the concept of contract ambiguity from the law literature into the interorganizational governance literature. Within the context of franchising, the authors present a three-study multimethod design empirically establishing the construct of contract ambiguity of franchisor obligations, providing new insights into the strategic design of contracts and their outcomes. In Study 1, the authors establish construct validity by demonstrating that contract ambiguity of franchisor obligations is distinct from contract specificity and contract completeness of franchisor obligations, with differential outcomes. In Studies 2 and 3, the authors demonstrate that contract ambiguity of franchisor obligations increases an interest-based (vs. a rights-based) conflict solving approach, implying greater cooperation and joint problem solving, and reduces franchisee-initiated litigation. The findings also indicate that while contract ambiguity of franchisor obligations decreases franchisee-initiated litigation, this effect is amplified by higher levels of franchisor training programs but mitigated by the presence of a franchisee association. The article closes with a discussion of implications for academics and practitioners.

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Online crowdfunding holds the promise of empowering entrepreneurs and small businesses as an innovative alternative financing channel. However, doubts have been expressed as to whether online crowdfunding can deliver its promise because of the lack of empirical evidence regarding its effects. In this study, we investigate the effects that prosocial crowdfunding has on traditional microfinance institutions (MFIs). Combining multiple data sources, including data from Kiva.org and the Microfinance Information Exchange Market (MIX Market), we examine how access to crowdfunding influences MFIs’ sustainability and interest rates. We find that after joining Kiva, MFIs’ sustainability improves and interest rates decrease. Further investigation suggests that the changes mainly result from efficiency improvement, rather than increased supply of low-cost funds. We propose that joining an online crowdfunding platform induces greater transparency and crowd monitoring, which motivates and empowers MFIs to improve operations and become more efficient.