Drivers of logistics outsourcing: examining transaction costs, core competences and planned behavior

Oskari Rintala*, Tomi Solakivi, Sini Laari, Juuso Töyli, Lauri Ojala

*Corresponding author for this work

    Research output: Contribution to journalArticleScientificpeer-review

    14 Citations (Scopus)

    Abstract

    Purpose: This study aims to investigate the extent to which psychological factors and the agency of decision-makers drive outsourcing decisions. Arguments based on transaction cost economics, the core competence approach and the theory of planned behavior are used to explain logistics outsourcing. Design/methodology/approach: The literature was reviewed to identify constructs that are antecedents of logistics outsourcing intentions, and corresponding measures were developed. The data were gathered through a survey of supply chain professionals in Finnish manufacturing companies. A measurement model was reviewed to ensure reliability and validity and converted into a structural model for analysis. The analysis was based on partial least squares (PLS) structural equation modeling. Findings: Supply chain managers objectively consider the characteristics of their organization's logistics identified in previous research as requiring assessment during the outsourcing process. However, and surprisingly, they also tend to rely on behavioral subjective factors such as positive attitudes, encouraging subjective norms and competence. Moreover, it seems that firms do not outsource logistics activities despite the high strategic importance of the function, but because of it. Research limitations/implications: The constructed model is limited to the constructs chosen to represent drivers of logistics outsourcing. Further application with more samples would improve its reliability. Practical implications: The factors proposed here with respect to assets and the capabilities of third-party partners could facilitate decision-making related to logistics outsourcing. Originality/value: The findings emphasize the role of behavioral factors in the procurement function and therefore enhance the understanding of behavioral supply chain management.

    Original languageEnglish
    Pages (from-to)259-280
    Number of pages22
    JournalInternational Journal of Physical Distribution and Logistics Management
    Volume51
    Issue number3
    Early online date2 Jan 2021
    DOIs
    Publication statusPublished - 2 Apr 2021
    MoE publication typeA1 Journal article-refereed

    Keywords

    • Behavioral supply chain management
    • Decision-making
    • Intention
    • Logistics outsourcing
    • Structural equation modeling
    • Theory of planned behavior

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