Lydia Bals

Reshoring and insourcing: drivers and future research directions

Purpose – Reshoring and insourcing decisions have been discussed in the popular press, yet coverage of these topics in the academic literature is limited. The purpose of this paper is twofold: first, it seeks to develop a more complete understanding of the underlying drivers of reshoring and insourcing decisions and their permutations. Second, it seeks to provide directions for future research to further analyze the link between drivers and outcomes of the reshoring and insourcing phenomena. Design/methodology/approach – This research follows a conceptual approach guided by transaction cost economics (TCE) and organizational buying behavior (OBB) theories. First, a theoretical framework of reshoring and insourcing decisions is developed. Next a comprehensive summary of reshoring and insourcing drivers is evaluated, yielding an in-depth discussion of future research directions (FRDs). Findings – The analysis demonstrates that the framework can be utilized to explain recent insourcing and reshoring changes ...

Outsourcing/Offshoring Insights: Going Beyond Reshoring to Rightshoring

Purpose The last decades have seen manufacturing and services offshoring on the rise, often motivated by low prices and without consideration of other important criteria such as additional cost measures and risk. With wages in former low-cost countries and automation/robotization increasing, these decisions are increasingly contested. Re-evaluations of “shoring” decisions inherently create a need to re-examine theoretical and academic contributions to this rapidly changing phenomenon. Therefore, the special issue sought manuscripts that added to the exciting and dynamic body of knowledge on “rightshoring”. The paper aims to discuss this issue. Design/methodology/approach The paper starts out by delimiting outsourcing/insourcing and offshoring/reshoring as part of a conceptual “rightshoring” framework to establish a common terminology and context for the insights gathered in the special issue. It illustrates that “shoring” options can be classified along geographical and governance dimensions. Findings Both the geographical and governance dimensions are part of the rightshoring decision which is an important conceptual foundation for this special issue, as it invited insightful pieces on all of these phenomena (e.g. outsourcing, insourcing, offshoring, reshoring), acknowledging that these decisions are embedded in the same context – firms making governance and location decisions. Therefore, papers 1-4 primarily focus on offshoring, whereas paper 5 focuses on insourcing and paper 6 on reshoring. Their main findings are summarized in Table II. Research limitations/implications Suggestions for future research out of the six papers are summarized in Table III. There is ample opportunity to further shed light on these suggestions as well as to cover parts of the “rightshoring” framework presented, that remain less covered here (e.g. insourcing and/or reshoring). Practical implications The array of potential “rightshoring” options fosters clarity about the phenomena studied and their implications. The main practical implications of the six papers are summarized in Table II. Originality/value The overall conceptual framework highlights the positioning of the final papers included into the special issue and provides guidance to scholars and managers alike.

The Offshoring Challenge: Strategic Design and Innovation for Tomorrow’s Organization

Exploring Layers of Complexity in Offshoring Research and Practice.- Offshoring Activities Impact A Companys Business Model: The Case of BBVA and Banco Santander.- Entrepreneurial Globalization: Lessons from the Offshoring Experiences of European Firms.- Tracking Offshoring and Outsourcing Strategies in Global Supply Chains.- Exploring Processes and Capabilities in Offshoring Intermediation.- Offshoring And Outsourcing Of Customer-Oriented Business Processes: An international transaction value model.- Offshoring White-Collar Work: An Explorative Investigation of the Processes and Mechanisms in Two Danish Manufacturing Firms.- SMEs De- Or Reorganizing Knowledge When Offshoring?.- The Dual Role of Subsidiary Autonomy in Intra-MNC Knowledge Transfer.- The Challenge of R&D Offshoring: Implications for Firm Productivity.- Industrial R&D Centers in Emerging Markets: Motivations, Barriers and Success Factors.- Towards a Flexible Breathing Organization: R&D Outsourcing at Bayer.- The Service Offshoring Code: Location Efficiencies for German Firms.- The Exit Advantage: Overcoming Barriers to National Exit.- Climate Change and the Offshoring Decision: Risk Evaluation and Management.- Do Expectations Match Reality When Firms Consider The Risks Of Offshoring? A Comparison of Risk Assessment by Firms with and Without Offshoring Experience.- Offshoring of Innovation: Global Innovation Networks in the Danish Biotech Industry.- Global Operations Coevolution: Hidden Effects and Responses.- Transformations of Mobile Telecommunications Supplier Networks.- Broadening the Conceptual and Phenomenological Scope of Offshoring.- The Complexity of Offshoring. A Comparative Study of Mexican Maquiladora Plants and Indian Outsourcing Offices from an Institutional-Prospect Theory Perspective.

Exploring Layers of Complexity in Offshoring Research and Practice

In just a matter of a decade, the Danish healthcare product manufacturer Coloplast underwent a complete organizational reconfiguration from being a local Danish manufacturing company to become a truly multinational corporation. Beginning in 2001, Coloplast commenced the process of relocating major parts of its manufacturing activities away from Denmark to Tatabanya in Hungary. Ten years later, the company had relocated up to almost 90 % of the production mainly to Hungary and China, but also to France and the United States. This reconfiguration had given substantial benefits, such as access to lower labor and production costs, but also an important means to reduce redundant organizational layers and resources. However, a transformation of this caliber rarely comes without challenges. In particular, Coloplast experienced many challenges such as empowering the new subsidiaries, adjusting the organizational requirements and identifying the detrimental organizational complexities. As Coloplast’s Operations Manager Allan Rasmussen explained: “We had designed an organizational structure that was too complex, with complex decision processes, complex governance structure, and complex communication channels”.

What Do We Know about Going Global Early? Liabilities of Foreignness and Early Internationalizing Firms

In this chapter, we embrace the recent phenomenon of early internationalizing firms with the goal of understanding these firms in light of decades of research on multinational firms, which has long stressed liabilities of foreignness. It is often implicitly assumed that the only way to reduce liabilities of foreignness is by doing business in foreign markets and learning about the local business environment. However, in this chapter, we focus on several distinctive antecedent firm characteristics that have been shown to facilitate early international expansion by firms, but which are not commonly considered in the international business literature. We perform a systematic review of the literature on early internationalizing firms (following David & Han, 2004), based on the seminal work of Oviatt and McDougall (1994) to guide our analysis of early internationalizing firms and to identify important ways in which these firms differ from multinational firms. We argue that long-standing arguments about the impact of liabilities of foreignness on firm foreign expansion apply to newly internationalizing firms, but that these liabilities are reduced by the experiences and knowledge of the founders and top managers in these firms acquired prior to the inception of these firms.

Toward a Flexible Breathing Organization: R&D Outsourcing at Bayer

Although R&D is at the core of knowledge-intensive industries like Pharma, outsourcing parts of its activities hold considerable efficiency and effectiveness potentials. That means managers must understand, which R&D activities can be outsourced and which need to stay in-house in order to ensure competitiveness. Nevertheless, systematic approaches for understanding the finer details of the decision-making process on R&D outsourcing are lacking. To address this gap, we present a framework developed in the context of a multinational company, Bayer. The combination of literature studies and the study of the decision process in the pharmaceutical division at Bayer HealthCare allows us to unfold an outsourcing process model—the filter approach—that includes appropriate decision phases and proper tools. The underlying logic of the model is that outsourcing decisions are rather a learning process with different stages than a rational one-off decision.

Implementing Sustainable Supply Chain Management: A Literature Review on Required Purchasing and Supply Management Competences

Implementing social and environmental dimensions in global supply chains remains a major challenge in practice. While processes and actions needed to implement sustainable supply chain management (SSCM) have been subject to more research in the last years, the question who implements these in practice is much less understood. Purchasing and supply management (PSM) stands out as a function with particular influence on the global supply base. Thus, there is a central connection between SSCM implementation and PSM as a function. While the organizational level has usually been in focus of research on sustainability issues in PSM, it is ultimately the individual buyer who implements specific processes and performs specific actions. Therefore, this chapter seeks to shed light on the relationship between SSCM implementation requirements and PSM competences needed on an individual buyer level. Based on a literature review, the current coverage of PSM competences in relation to SSCM is presented in order to discuss further avenues for research.

Procurement sustainability tensions: an integrative perspective

The purpose of this paper is to unpack tensions faced by procurement professionals as part of their triple bottom line (TBL) sustainability activities. The authors take an integrative perspective based on the procurement sustainability and organizational tensions literature, as well as stakeholder and institutional theory.,The authors use a multiple case study approach. Data are collected through multiple interviews and archival data from eight case companies in Australia.,The authors identify supply chain and company procurement sustainability tensions (PSTs) and explain their multi-level nature. The analysis also dissects the multi-stakeholder and multi-institutional environments where PSTs operate. The authors discuss such environments in terms of various temporal and spatial legitimacy contexts (LCs) that, through their assessment of institutional distance, can characterize the manifestation of PSTs.,The findings are instrumental for managers to make informed decisions when dealing with PSTs, and they pave the way for paradoxical leadership given the increasing importance of simultaneous development and balancing of TBL dimensions, as evidenced in this study.,This is one of the first studies to empirically investigate PSTs by drawing on an integrative approach to identify PSTs, and to discern various LCs that underpin stakeholder judgments of procurement’s TBL sustainability activities.

What Hybrid Business Models Can Teach Sustainable Supply Chain Management: The Role of Entrepreneurs’ Social Identity and Social Capabilities

Integrating triple bottom line (TBL; economic, social, and environmental) sustainability into supply chains is a major challenge. Progress has been made to address the economic and environmental dimensions in supply chain management research; however, the social dimension is still underrepresented. This chapter reflects on research that looked at the literature on hybrid business models and social entrepreneurship in order to bridge these streams of literature to literature on sustainable supply chain management. Following the literature analysis, case-based research related specifically to social businesses in catastrophe-ridden Haiti was performed. The insights provided by the entrepreneurs of these businesses showed organizations that target TBL objectives from their inception, the specific social capabilities employed to obtain the desired TBL objectives, and the specific supply chain structures that were needed to execute and achieve the TBL goals. The purpose of this chapter is to reflect on that research as it relates to the social businesses, consider the primary results of that research, and discuss how those results might guide further research in the field of sustainable supply chain management.

Implementing Triple Bottom Line Sustainability into Global Supply Chains

Considering that supply chain network operations have become increasingly competitive and globalized, a critical challenge for any group of organizations is to develop an integrated set of performance metrics that can be used to evaluate the sustainability of different supply chain designs. However, the interface of environmental, economic and social aspects in supply chain management is not yet well-covered in the current literature. In this chapter, we attempt to develop mathematical programming-based efficiency metrics, which are called “sustainable network operational efficiency” (SNOE), in order to assess supply chain performance and evaluate possible design configurations of a global supply chain. The SNOE metrics could also be used to detect the factors of unsustainability in a supply chain network. This chapter may be of interest to organizations that are planning to design new supply chain networks or evaluate its existing networks with an aim to allocate its resources efficiently and improve its overall supply chain efficiency.