Managing integration in outsourcing relationships - The influence of cost and quality priorities

Riikka Kaipia*, Virpi Turkulainen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

36 Citations (Scopus)
330 Downloads (Pure)

Abstract

Outsourcing has become increasingly popular in the contemporary business context. This study aims to develop the understanding of outsourcing by addressing the management of integration in the outsourcing relationship between buyers and contract manufacturers. Specifically, we address the effect of strategic priorities of cost and quality on how different modes of integration are used both before and in the early phase of production. The paper elaborates the strategic contingency argument by analyzing qualitative data from eight cases in the food and electronics industries. The results indicate that managing the outsourcing relationship requires considerable resources after the decision to outsource has been made. The results show that integration in the outsourcing relationship evolves over time and the use of integration modes is contingent on the strategic priority. The study provides an understanding of the contextual nature of integration in the outsourcing relationship, as well as a contextualized understanding of buyer-supplier relationships. It also provides an illustration of theory elaboration research.

Original languageEnglish
Pages (from-to)114-129
Number of pages16
JournalIndustrial Marketing Management
Volume61
DOIs
Publication statusPublished - Feb 2017
MoE publication typeA1 Journal article-refereed

Keywords

  • Buyer-supplier relationship
  • Case study
  • Integration
  • Outsourcing
  • Strategic priority
  • Theory elaboration

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