Market structure and strategic bi-sourcing

Beladi, Hamid; Mukherjee, Arijit

doi:10.1016/j.jebo.2012.01.004

Cited by 26 publications

(17 citation statements)

References 37 publications

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“…Lastly, some studies recognize the growing importance of examining the simultaneous use of different governance modes—so‐called “concurrent sourcing” (Parmigiani and Mitchell, ), “plural sourcing” (Krzeminska, Hoetker, and Mellewigt, ) or “bi‐sourcing” (Beladi and Mukherjee, )—which arises when firms both “make and buy” the same inputs. As these studies typically focus on internal and external sourcing performed domestically (in the home country), it would be interesting to extend this line of research to international R&D sourcing.…”

Section: Discussionmentioning

confidence: 99%

Does R&D offshoring lead to SME growth? Different governance modes and the mediating role of innovation

Rodríguez

Nieto

2015

Strategic Management Journal

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Research summary:In this article, we address the role of R&D offshoring strategies in the sales growth of small-and medium-sized enterprises (SMEs). We propose that different governance modes of R&D offshoring-insourcing versus outsourcing-may lead to growth, but that they differ in their effects. In turn, we argue that innovation mediates the relation between international R&D sourcing strategies and sales growth. Based on a large database of SME manufacturing enterprises in Spain, we find that offshore outsourcing positively affects sales growth both directly and indirectly, while offshore insourcing only affects sales growth indirectly via innovation results. The analysis reveals different contributions of each governance mode to sales growth and the mediating role of innovation in the relation between R&D offshoring and firm growth. Managerial summary: We analyze how different governance modes of international R&D sourcing-offshore insourcing and outsourcing-may contribute to growth in SMEs. Modes of offshore R&D outsourcing positively affect the growth of sales in two ways. One effect is direct, produced by improved efficiency, flexibility, enhanced resources, and access to new markets. And the other effect is indirect as offshore R&D outsourcing favors the achievement of innovations, and this in turn, positively affects firm growth. For their part, captive modes only exert an indirect effect. Offshore R&D insourcing contributes to the achievement of innovations, and thus, ultimately to firm growth in so far as these innovations enable SMEs to increase sales. Therefore, innovation results perform a mediating role in the relation between R&D offshoring and sales growth.

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Section: Discussionmentioning

confidence: 99%

Does R&D offshoring lead to SME growth? Different governance modes and the mediating role of innovation

Rodríguez

Nieto

2015

Strategic Management Journal

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“…1 The general evidence of bisourcing and particularly, in polluting industries, motivates us to analyze how bisourcing benefits the sourcing firm and affects global environmental damage by influencing the tax/subsidy policies, which eliminate or reduce inefficiencies due to productmarket imperfection as well as environmental pollution. Thus, the reason explained in this paper for bisourcing is different from the existing reasons, such as uncertainty (Emons, 1996), market power of the outside input suppliers (Arya, Mittendorf, & Sappington, 2008;Beladi & Mukherjee, 2012;Stenbacka & Tombak, 2012), moral hazard (Du, Lu, & Tao, 2006, 2009, and capacity utilization (He & Nickerson, 2006;Puranam, Gulati, & Bhattacharya, 2013).…”

mentioning

confidence: 79%

Make and buy in a polluting industry

Iida

Mukherjee

2020

J Public Economic Theory

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The literature paid significant attention to analyze the rationale for the make-or-buy strategy of firms. However, a related empirically relevant strategy of make and buy did not get much attention. We show that the presence of tax/subsidy policies, which are particularly important in the presence of environmental pollution, may create a rationale for the make-and-buy strategy of firms. Thus, we provide a new rationale for the make-and-buy strategy of firms which is different from the existing reasons, such as uncertainty, market power of the input suppliers, moral hazard, and capacity utilization. We also show that international harmonization, where countries set taxes cooperatively, can promote outsourcing compared with the situation where the countries set taxes non-cooperatively. Further, global welfare maximizing outsourcing is less than the harmonization case. While global welfare is higher under global welfare maximization compared with harmonization, the total environmental damage can be lower under the latter case than the former case. Hence, higher welfare not necessarily implies lower environmental damage. 1 | INTRODUCTION Empirical evidence suggests that many firms produce certain inputs in-house and purchase them from outside suppliers, that is, adopting the make-and-buy strategy, which is also called bisourcing. Cohen and Young (2006) mentioned that several firms use a set of internal and external service providers in the global economy. For example, GMS, a global manufacturing and service firm, uses globally decentralized internal and external resources. Nokia buys a large proportion of key electronic components, such as semiconductors and microprocessors from a global network of suppliers, and

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“…Beladi and Mukherjee (2012) support the bi-sourcing approach, which adds value to customers, albeit the argument is based on a simplified equation model with relatively narrow assumptions about the environment. However, the competitive advantage and its long-term impact must be considered and verified in a longitudinal study.…”

Section: Make-or-buy (In-or Outsourcing) Decisionsmentioning

confidence: 99%

“…CHAPTER TWO -LITERATURE REVIEW -50 - Beladi and Mukherjee (2012) investigate the bi-sourcing question (make-and-buy strategies) and support the view that the combination of inside and outside production often provides added value to customers. Due to greater competition in the input market, the input price should decrease, thus reducing the incentives for the company.…”

Section: Make-or-buy (In-or Outsourcing) Decisionsmentioning

confidence: 99%

Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

Kotula¹,

2014

Supply Management Research

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Strategic sourcing has increased in importance in recent years, and now plays an important role in companies' planning. The current volatility in supply markets means companies face multiple challenges involving lock-in situations, supplier bankruptcies or supply security issues. In addition, their exposure can increase due to natural disasters, as witnessed recently in the form of bird flu, volcanic ash and tsunamis. Therefore, the primary focus of this study is risk management in the context of strategic sourcing.The study presents a literature review on sourcing based on the 15 years from 1998-2012, and considers 131 academic articles. The literature describes strategic sourcing as a strategic, holistic process in managing supplier relationships, with a long-term focus on adding value to the company and realising competitive advantage. Few studies discovered the real risk impact and status of risk management in strategic sourcing, and evaluation across countries and industries was limited, with the construction sector particularly under-researched.This methodology is founded on a qualitative study of twenty cases across Germany and the United Kingdom from the construction sector and electronics manufacturing industries. While considering risk management in the context of strategic sourcing, the thesis takes into account six dimensions that cover trends in strategic sourcing, theoretical and practical sourcing models, risk management, supply and demand management, critical success factors and the strategic supplier evaluation.The study contributes in several ways. First, recent trends are traced and future needs identified across the research dimensions of countries, industries and companies. Second, it evaluates critical success factors in contemporary strategic sourcing. Third, it explores the application of theoretical and practical sourcing models in terms of effectiveness and sustainability. Fourth, based on the case study findings, a risk-oriented strategic sourcing framework and a model for strategic sourcing are developed. These are based on the validation of contemporary requirements and a critical evaluation of the existing situation. It contemplates the empirical findings and leads to a structured process to manage risk in strategic sourcing. The risk-oriented framework considers areas such as trends, corporate and sourcing strategy, critical success factors, strategic supplier selection criteria, risk assessment, reporting, strategy alignment and reporting. The proposed model highlights the essential dimensions in strategic sourcing and guides us to a new definition of strategic sourcing supported by this empirical study.

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Market structure and strategic bi-sourcing

Cited by 26 publications

References 37 publications

Does R&D offshoring lead to SME growth? Different governance modes and the mediating role of innovation

Does R&D offshoring lead to SME growth? Different governance modes and the mediating role of innovation

Make and buy in a polluting industry

Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

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