Marco Sartor

Motivations of manufacturing reshoring: an interpretative framework

Purpose – The purpose of this paper is to present a framework for the analysis of reshoring. The framework is then applied to analyze motivations for reshoring, as they emerge from extant literature and from new evidence collected. Design/methodology/approach – The authors start by formulating a literature-grounded definition of reshoring and reviewing some key theoretical approaches for international manufacturing location. In light of these theories, the authors then propose an interpretative framework for the analysis of reshoring motivations. Finally, the authors provide new evidence on this phenomenon, by presenting the findings of an extensive data collection of reshoring cases built on secondary data. Findings – The authors show that a vast array of single drivers of reshoring can be extracted from extant literature; however, the interpretative framework eventually highlights four main typologies of reshoring motivations, thus allowing for a more sound comprehension of why the phenomenon happens. T...

International purchasing offices in China

Creating an international purchasing office (IPO) is one of the most frequently adopted solutions by companies to manage their international sourcing activities. Despite the increasing importance of this solution for international supply management, the literature still offers limited studies on it. This research, which forms part of an EU project entitled ‘International sourcing Strategies for China’, tries to fill this gap. Starting from an analysis and systematisation of the existing literature, the study defines the main aspects characterising the creation and management of IPOs in China, which is actually one of the nations with the highest inflow of foreign direct investments and one of the most important sourcing basins in the world. In particular, taking into consideration the specificities of the Chinese normative/social/political context, the research tries to describe how to establish and manage an IPO in China and the main functions assigned to it.

Foreign direct investments in manufacturing by district firms: evidence from the Italian chair district

Manufacturing internationalisation is a phenomenon that currently involves several industrial districts. While the literature on industrial districts is wide, few works analyse the (manufacturing) internationalisation dynamics. This study tries to fill this lack by analysing forms, motivation, obstacles and results of the foreign direct investments carried out in one of the most important Italian districts. The research shows how some of the district leading firms have recently combined local presence with a strategy of internationalisation that also involves manufacturing activities through foreign direct investments. The readers can comprehend the main features of the international manufacturing path that is involving one of the most important Italian industrial districts, i.e. the chair district. The research offers a contribution to an area rather neglected in literature – the district (manufacturing) internationalisation dynamics.

The internationalization of local manufacturing systems: evidence from the Italian chair district

The present study focuses on one of the most important Italian local manufacturing systems: the chair district. Over 1200 companies operate here producing more than 44 million chairs a year, which is 80% of the entire Italian production. This district is going though a phase of transformation induced by the opportunities and threats typical of the era of the global economy. These transformations involve the sourcing, manufacturing and selling activities. On the basis of empirical research, the study analyses the evolution of the chair district and the strategic choices made by the producers: reconfiguration of the production and logistical networks, decentralization of production tasks, internalization and externalization of the phases, and diversification of supply and distribution channels.

Manufacturing Back-Reshoring as a Nonlinear Internationalization Process

Abstract Purpose The first aim of the chapter is to offer a characterization of back-reshoring as a possible step of the firm’s nonlinear internationalization process. The second aim is to review the empirical literature on back-reshoring and to complement it with the findings of an extensive data collection. Methodology/approach In this chapter we adopted an explorative approach building on both theoretical and empirical literature from the fields of international business and international operations Management. We also collected secondary data on back-reshoring decisions in order to define the magnitude of the investigated phenomenon and to offer a primary characterization. Findings Our findings confirm that, though it cannot be considered a generalized trend, back-reshoring is a very topical issue for international business scholars. It represents an autonomous phenomenon consistent with the idea of nonlinear internationalization process. Research limitations/implications The chapter is based on cross-sectional data. Longitudinal research is required in order to address the proposed research questions and help understanding “how much” and what kind of manufacturing will be housed in western countries in the near future. Originality/value This is the first attempt to conceptualize back-reshoring as a possible step of the firms’ internationalization process. It is also the first chapter that summarizes and discusses the literature and empirical evidence on back-reshoring emerging from a wide range of countries.

International purchasing offices in China: roles and resource/capability requirements

Purpose – The purpose of this paper is to address global sourcing organisational design through the following research questions: how do the roles performed by International Purchasing Offices (IPOs) change over time?; what are the resources/capabilities required by an IPO for an effective performance and how do they change over time?; and what are the contingent factors affecting such changes? Design/methodology/approach – The authors employed an exploratory multiple case study approach and analysed 14 Western IPOs located in China for a period between 2007 and 2012. The data were primarily collected through 34 direct, semi-structured interviews of IPO heads and sourcing managers or senior buyers. Findings – The authors identify and discuss the importance of ten roles played by IPOs and 12 required resources/capabilities. Furthermore, considering the changes that occurred to these IPOs over a five-year period (2007-2012), the authors observe three distinct evolutionary behaviours (i.e. “overall developme...

Countertrade: compensatory requests to sell abroad

The term ‘countertrade’ refers to a set of (commercial) agreements between a buyer and a seller in which the primary transaction is accompanied by a variety of additional conditions. This trade form is very relevant: the estimates provided by the literature show that up to 30% of the total value of international transactions depends on these agreements (Hammond, 1990; Forker, 1996; Hennart and Anderson, 1993). Most of the existing studies focus on some countertrade forms (mainly barter and counterpurchase) and mainly analyse legal or macroeconomic aspects of these agreements, whilst analyses of their organisational and managerial implications are rare. The purpose of this work is to develop the first classification of the compensatory requests used in ‘offset’ agreements, which are among the most important, complex and least-documented countertrade forms. The study is also aimed at identifying some unexplored issues to be analysed in future researches.

Performance implications of SA8000 certification

Purpose The purpose of this paper is to shed light on the relationship between the adoption of Social Accountability 8000 (SA8000) – which is considered the most important ethical certification standard – and firm performance, building on agency and contingency theories. Design/methodology/approach The authors analyse secondary longitudinal balance sheet data of listed firms employing a rigorous event-study approach and compare SA8000-certified companies to different control groups based on three matching criteria, i.e., industry, size, and pre-certification performance. The authors then study the moderating effects of the cultural features, the country’s development level, and the labour intensity on the causal relationship through multiple regression methods. Findings The authors find that SA8000 certification positively affects labour productivity and sales performance but has no effect on profitability. Furthermore, the study supports that the relationship between SA8000 and profitability is moderated by two cultural features of the home country of the firms (i.e. power distance and uncertainty avoidance). Originality/value This is the first study, which empirically tests the effects of the ethical certification SA8000 on firm performance using a cross-country sample. In addition, the authors contribute to the wider debate on the effects of corporate social responsibility practices on firm performance.

Sourcing in China: The International Purchasing Office Solution

China possesses one of the most dynamic economies in the world. Many companies, enticed by the opportunities offered (not only cost-related ones) have decided to source from this market. In China’s social, cultural, and legal context, so different from Western ones, they are likely to encounter numerous obstacles when creating and managing a supply flow from China. Creating an International Purchasing Office (IPO) is becoming one of the solutions most frequently adopted by Western companies to manage international sourcing activities. Despite the increasing importance of this solution, there are still few studies published on this topic. The present study attempts to fill the gap in scientific literature, defining the solutions for the creation and management of an International Purchasing Office (IPO) in China. Moreover, the study attempts to describe the reasons for the creation of an IPO in China, the main activities that can be delegated to it, and adoptable organizational solutions.

Build–operate–transfer (BOT): an emerging entry mode for service offshoring

Abstract Build–operate–transfer (BOT) is a well-established solution used in the engineering and construction industries for building different types of infrastructure (e.g. railways, highways, power plants). In recent years, BOT has increasingly been adopted by companies in the service industry as a mode for entering foreign markets. BOT in service offshoring (SO) is characterised by a number of significant peculiarities (e.g. different numbers of involved parties, fee methods, lengths of the concession period), which may call into question the possibility of extending existing findings that relate to infrastructure projects. The aims of this work are as follows: to collect and systematise existing knowledge on engineering and construction BOT projects; to highlight – through an exploratory case study – how these results could be applied to BOT in SO; and to shed light on the factors affecting the choice between different entry modes (including BOT).