Michael J. Mol

Purchasing's strategic relevance

Recently Ramsay (2001) applied the resource based view of the firm (RBV) to argue that purchasing is a largely irrelevant activity from a strategic management point of view. In this paper it will be argued to the contrary on several grounds. First, it will be shown there is a much wider theoretical base underlying the field of strategic management, from which arguments can be drawn to substantiate that purchasing can indeed have strategic impact. Second, recent developments in the RBV will be discussed to illustrate that also within the RBV purchasing is a strategic activity. Furthermore there is much empirical evidence to demonstrate that purchasing and supply management activities contribute to sustainable competitive advantage. The paper then puts forward a systematic set of criteria, which may be of value to purchasing management researchers to assess whether studied phenomena have strategic impact. Finally some hints are given for future research directions.

Reverse auctions or auctions reversed: First experiments by Philips

The electronic auction is one of the most highly-promoted forms of B2B e-commerce. However, since the e-commerce bubble burst, the effectiveness of this tool is in question. This article looks at how electronic auctions can be affected by various trade-offs in sourcing strategy. Using the case of an auction by Philips, it is shown that firms still mostly have to deal with the same tensions. Even when auctions are used, regional sourcing strategies rather than global ones are the norm for most European firms. To be effective, electronic auctions should be used as part of a wider strategy, and appropriate selection criteria should be set up in advance.

The Role of External Involvement in the Creation of Management Innovations

There has recently been renewed scholarly interest in management innovating, the creation of new organizational practices, structures, processes and techniques. We suggest that external involvement in the process of management innovating can transpire in three different ways: direct input from external change agents; prior external experience of internal change agents; and the use of external knowledge sources by internal change agents. We ask whether the type of innovation created (radical or not; systemic or not) depends on the use of these three forms of involvement and whether the forms are substitutes or complements. We empirically investigate this through an archival study of 23 major historical innovations, using in-depth data from a large number of sources in the academic literature. We use three complementary methods of analysis: unstructured qualitative observations, correlational analysis and crisp-set qualitative comparative analysis. We find that the presence of external change agents is associated with systemic and incremental innovations; that the absence of external experience is associated with systemic and radical innovations; and that the presence of external sources of knowledge has no clear effect. Furthermore the three forms of involvement act to a large degree as substitutes. We contribute new theoretical arguments for the facilitators of management innovation, demonstrate the usefulness of an open innovation lens to the study of management innovation, show that management innovating is a relatively complex form of strategic process and highlight how the creation of management innovations is similar to and different from the genesis of other types of innovation.

Creating wealth through working with others: Interorganizational relationships

The article reports that the success stories of the global supply network of Nike and the computer industry alliances of Intel have encouraged companies to engage in interorganizational relationships (IRs). Although a good number of IRs gain popularity, a majority of the deals also fail. IRs allow firms to minimize the aggregate of production costs. The economic rationales for IRs include their ability to obtain resources or provide strategic advantage through competition. Some advantages experienced in IRs include economies of scale, access to resources, and information sharing.

Africa is just like every other place, in that it is unlike any other place

In this commentary we make a case that an increased focus on strategic management in Africa is both very timely and very necessary. We discuss existing research in this area, arguing that there is not quite enough of it and that authors could do a better job at accumulating knowledge. We then proceed to identify some topic areas we consider to be particularly fruitful. These include multinational enterprises from within as well as from outside Africa and new ventures and innovation. We further suggest that the literature needs to move away from merely considering Africa to be a challenging place to do business towards studying how firm strategies in Africa are actually created and implemented. Such an approach would align well with developments in the world of practice, because strategy in Africa is becoming ever more sophisticated.

Information technology and the internationalization of the firm

A key concern for all multinationals is where to find a suitable location for their business activities, bearing in mind that they must find the right balance between global integration and local responsiveness. This article contributes to the internationalization debate by asking: in what sense will information technology enable globalization? We focus on the sourcing process, an area where globalization is often claimed to be the case. Re-examination of empirical evidence shows that global sourcing is not as generally predominant as is claimed. Consequently inhibitors to global integration exist and we classify these inhibitors into three categories: geographical, relational and environmental inhibitors. We then analyze the role information technology plays in reducing these inhibitors and formulate propositions that are then illustrated in two case studies. Information technology is proposed to reduce the geographical and relational inhibitors, but it will have no effect on environmental inhibitors. However, the latter category of inhibitors will become more prominent in the future. Information technology thus shifts the balance towards global integration, but simultaneously creates new problems in managing internationalization.

Global sourcing strategy and performance: A “fit” versus “balance” perspective

Increased global sourcing of manufacturing and service activities has been a prominent part of the restructuring of firms’ supply chains in the 1990s and beyond. Academics and consultancy firms have largely supported the view of global sourcing as one of the key drivers of superior performance. As we are now increasingly discovering, the drawbacks of offshore outsourcing – or, put differently, the advantages of vertical integration – have been underestimated or even neglected. In this chapter, we first discuss the need to balance sourcing levels and then how global sourcing levels must achieve a strategic fit with the environment. Finally, we synthesize these balance and fit perspectives to suggest how, over time, changes in the fit alter the required balance in global sourcing. From this synthesis, we develop a number of future research questions related to important conceptual perspectives on sourcing. For managers we provide indications of how they can achieve a balance and a fit of their sourcing strategies.

The Reconfiguration of Service Production Systems in Response to Offshoring: A Practice Theory Perspective

Purpose A service production system has a structure composed of task execution, agents performing tasks and a resulting service output. The purpose of this paper is to understand how such a service production system changes as a consequence of offshoring. Design/methodology/approach Drawing on practice theory, the paper investigates how offshoring leads to reconfiguration of the service production system. Through a multiple case methodology, the authors demonstrate how agents and structures interact during reconfiguration. Findings The paper analyses the reconfiguration of components of a service production system in response to change ignited by offshoring. The authors find recurring effects between structures that enable and constrain agents and agents who shape the structure of the production system. Research limitations/implications The paper offers a novel contribution to the service operations management literature by applying practice theory. Moreover, the authors propose a detailed, activity-driven view of service production systems and service offshoring. The authors contribute to practice theory by extending its domain to operations management. Practical implications Service production systems have the ability to self-correct any changes inflicted through offshoring of the systems, which helps firms that offshore. Originality/value The paper is aimed at service professionals and offshoring managers and proposes a novel presentation of the service production system with a description of how it responds to offshoring. The authors contribute to theory by applying practice theory to the fields of service operations management and offshoring.

Reflections on “the sources of management innovation” Mol & Birkinshaw, 2009

Abstract In this retrospective, I consider what has driven interest in a previously published article, in relation to more recent developments in the literature on management innovation, the creation, and implementation of new management practices. I suggest that this form of innovation had previously not received enough attention and that the first-time use of both the Community Innovation Survey, as a data source, and the behavioral theory of the firm, to theoretically underpin our understanding of management innovation, created further interest in this work. I then put forward two important recent developments. First, there have been attempts to bridge innovation processes in management practices with processes of diffusion of management practices. Second, a wider variety of research methods have come into play to study management innovations. I conclude there is substantial room for further work in this exciting area, for instance by looking at management innovation in emerging markets.

Management innovation made in China: Haier’s Rendanheyi

Emerging market companies create new management practices for an environment characterized by increased volatility, uncertainty, complexity, and ambiguity (VUCA). This article shows how Haier developed a platform of management practices called Rendanheyi to transform itself from a conventional hierarchical manufacturing firm to a highly responsive online-based entrepreneurial company. It demonstrates how the organizational, competitive, institutional, and technological contexts mattered for the development of Rendanheyi, showing how context-dependent management innovations are created to allow emerging market firms such as Haier to deal with a high VUCA world and creating an extended process model of management innovation that managers can readily apply.