Environmental uncertainty and cross-buying in logistics outsourcing arrangements: a resource dependence perspective
International Journal of Physical Distribution & Logistics Management
ISSN: 0960-0035
Article publication date: 24 December 2020
Issue publication date: 2 April 2021
Abstract
Purpose
This study follows the tenets of the resource dependence theory (RDT) to investigate the effects of four dimensions of industry-level environmental uncertainty – munificence, dynamism, complexity and innovative intensity – on a shipper's cross-buying (i.e. outsourcing across multiple service categories) in logistics outsourcing arrangements.
Design/methodology/approach
Negative binomial regression was used to test the hypotheses with a sample of US manufacturers. Measures were developed through information acquired from a proprietary database of 3PL companies obtained through Armstrong and Associates, Inc. and publicly available industry measures from the US Manufacturing Census and Compustat.
Findings
The findings indicate that individual dimensions of environmental uncertainty exhibit distinct influences on shippers' cross-buying in their logistics outsourcing arrangements. Specifically, the growth and initial innovative intensity of shippers' industries lead to an increased number of logistics service categories outsourced to 3PLs, while industry dynamism and exceptionally high innovative intensity drive the opposite effect.
Practical implications
These findings provide valuable guidance to 3PLs with respect to decisions related to the acquisition of specialized transportation, storage, information systems and personnel assets to serve specific industries. The findings highlight industry conditions that are more likely to lead shippers to outsource across a wider array of logistics service categories and, as a result, potentially yield higher customer retention and profit margins.
Originality/value
While extant 3PL literature posits that shippers' individual strategic orientations and capabilities impact their outsourcing strategy, this study contributes to the literature by providing a theoretical-based empirical examination of the industry-level influencers of such behavior.
Keywords
Acknowledgements
The authors are indebted to Armstrong & Associates, Inc. for kindly providing access to the Who's Who in Logistics database. This study would not have been possible without their support. The authors would also like to thank the Editor, Dr. Chee Yew Wong, and the anonymous reviewers for the thoughtful and constructive insights throughout the review process.
Citation
Hofer, A.R., Jin, Y.H. and Knemeyer, A.M. (2021), "Environmental uncertainty and cross-buying in logistics outsourcing arrangements: a resource dependence perspective", International Journal of Physical Distribution & Logistics Management, Vol. 51 No. 3, pp. 236-258. https://doi.org/10.1108/IJPDLM-04-2019-0121
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited