How does concurrent sourcing affect performance?
Abstract
Purpose
“Concurrent sourcing” is a term used by Parmigiani to describe the phenomenon where a firm simultaneously buys and makes the same good or service. The purpose of this paper is to develop propositions that suggest how concurrent sourcing affects performance.
Design/methodology/approach
Based on transaction cost, agency, neoclassical economic, knowledge‐based, and resource‐based theory, it is proposed to show how concurrent sourcing affects performance.
Findings
The paper argues that concurrent sourcing improves performance when firms face a combination of volume uncertainty, technological uncertainty, performance uncertainty, non‐decomposability, transaction‐specific investments, and strong internal and external capabilities.
Research limitations/implications
The paper maps the relationships between concurrent sourcing and performance and discusses how these relationships can be modelled. The propositions and discussion offer researchers a starting‐point for further research.
Practical implications
The propositions that are developed suggest that managers should consider using concurrent sourcing when they face problems caused by volume uncertainty, technological uncertainty, performance uncertainty, non‐decomposability, and asset specificity. Concurrent sourcing can also be a way to exploit both strong internal capabilities and external suppliers' strong capabilities.
Originality/value
The main contribution is a number of propositions, explanations, and discussions regarding how concurrent sourcing affects performance of the market and the hierarchy.
Keywords
Citation
Mols, N.P. (2010), "How does concurrent sourcing affect performance?", Journal of Business & Industrial Marketing, Vol. 25 No. 7, pp. 525-534. https://doi.org/10.1108/08858621011077754
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited