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To insource or outsource the sourcing? A behavioral investigation of the multi-tier sourcing decision
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Chae, Sangho, Lawson, Benn, Kull, Thomas J. and Choi, Thomas Y. (2019) To insource or outsource the sourcing? A behavioral investigation of the multi-tier sourcing decision. International Journal of Operations & Production Management, 39 (3). pp. 385-405. doi:10.1108/IJOPM-04-2018-0231 ISSN 0144-3577.
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Official URL: http://doi.org/10.1108/IJOPM-04-2018-0231
Abstract
Purpose
The purpose of this paper is to investigate the behavioral tendencies of supply managers when they are faced with uncertainty in making multi-tier sourcing decisions.
Design/methodology/approach
This paper uses the literature on multi-tier supply chains and behavioral decision making to develop a theoretical framework for examining factors influencing a supply manager’s decision to retain control over sourcing in the multi-tier context. An experimental vignette methodology is used to gather data from 259 supply managers.
Findings
Results suggest that supply managers choose to exert less multi-tier control when they have high levels of interpersonal trust in the tier-1 supplier’s sales representative. This effect is accentuated by a high level of familiarity with potential lower-tier suppliers. Under high levels of familiarity with potential lower-tier suppliers, supply managers will exert greater levels of multi-tier sourcing control as the behavioral uncertainty of the tier-1 supplier increases.
Practical implications
Buying firms can enhance their understanding of supply managers’ multi-tier sourcing decision making and the potential biases associated with it. Suggestions for a more effective use of multi-tier sourcing are provided in the Discussion section.
Originality/value
Multi-tier sourcing is an increasingly important area of research, and this paper is the first to examine individual supply managers’ behavioral decision making in the multi-tier context. This paper also contributes to the outsourcing literature by investigating behavioral factors influencing the outsourcing of sourcing activities.
Item Type: | Journal Article | ||||||||
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Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
Journal or Publication Title: | International Journal of Operations & Production Management | ||||||||
Publisher: | Emerald Group Publishing Ltd. | ||||||||
ISSN: | 0144-3577 | ||||||||
Official Date: | 18 April 2019 | ||||||||
Dates: |
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Volume: | 39 | ||||||||
Number: | 3 | ||||||||
Page Range: | pp. 385-405 | ||||||||
DOI: | 10.1108/IJOPM-04-2018-0231 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 27 September 2023 |
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